Exhibit 99.1
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      Dallas, TexasMarch 25, 2009
    
    /s/ KPMG LLP




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
As of December 31, 2008 and 2007
(Audited)
 December 31,December 31,
    
    
    20072008
    
    
    (Restated)AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,468,920
    
    
    $
    2,034,393Oil, gas and other mineral properties
    
    
    2
    
    
    
    2Federal income tax refundable
    
    
    1,433
    
    
    
    Total assets
    
    $
    2,470,355
    
    
    $
    2,034,395Liabilities and Trust CorpusCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    12,416Federal income taxes payable
    
    
    
    
    
    
    3,451Income distributable to unitholders
    
    
    1,236,980
    
    
    
    900,030Total current liabilities
    
    $
    1,236,980
    
    
    $
    915,897Trust corpus  authorized 1,386,525 units of beneficial interest, issued 1,386,375 at nominal value
    
    
    1,233,375
    
    
    
    1,118,498$
    2,470,355
    
    
    $
    2,034,395




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME
For the Three Years Ended December 31, 2008
(Audited)
 2007
    
    
    20062008
    
    
    (Restated)
    
    
    (Restated)Income:Oil and gas royalties
    
    $
    4,574,710
    
    
    $
    4,225,612
    
    
    $
    1,328,824Interest income
    
    
    27,039
    
    
    
    65,439
    
    
    
    41,998Total income
    
    $
    4,601,749
    
    
    $
    4,291,051
    
    
    $
    1,370,822Expenses:General and administrative expenses
    
    $
    325,871
    
    
    $
    171,807
    
    
    $
    135,980Distributable income before Federal income taxes
    
    
    4,275,878
    
    
    
    4,119,244
    
    
    
    1,234,842Federal income taxes of subsidiary
    
    
    45,670
    
    
    
    51,600
    
    
    
    19,027Distributable income
    
    $
    4,230,208
    
    
    $
    4,067,644
    
    
    $
    1,215,815Distributable income per unit
    
    $
    3.05
    
    
    $
    2.93
    
    
    $
    0.88Distributions per unit
    
    $
    2.97
    
    
    $
    2.91
    
    
    $
    0.75Units outstanding
    
    
    1,386,375
    
    
    
    1,386,375
    
    
    
    1,386,375




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN TRUST CORPUS
For the Three Years Ended December 31, 2008
(Audited)
 2007
    
    
    20062008
    
    
    (Restated)
    
    
    (Restated)Trust corpus, beginning of period
    
    $
    1,118,498
    
    
    $
    1,078,721
    
    
    $
    902,713Distributable income
    
    
    4,230,208
    
    
    
    4,067,644
    
    
    
    1,215,815Distributions to unitholders
    
    
    4,115,331
    
    
    
    4,027,867
    
    
    
    1,039,807Trust corpus, end of period
    
    $
    1,233,375
    
    
    $
    1,118,498
    
    
    $
    1,078,721




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL




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Year Ended December 31,2008
    
    2007
    
    2006Devon Energy Production Company
    
    
    77
    %
    
    
    74
    %
    
    
    59
    %Newfield Exploration Co.
    
    
    
    
    
    
    10
    %
    
    
    NOEX Energy, Inc.
    
    
    8
    %
    
    
    7
    %
    
    
    26
    %W & T Offshore
    
    
    7
    %
    
    
    6
    %
    
    
    13
    %Others
    
    
    8
    %
    
    
    3
    %
    
    
    2
    %100
    %
    
    
    100
    %
    
    
    100
    %
 CHANGE IN ACCOUNTING METHOD
    
    
    Oil and gas royalties receivable
    
    Undistributed income
  
    
    Net income
    
    Undistributed income at beginning of period (year)
    
    Distributions to unitholders
    
    Undistributed income at end of period (year)
    
    Net income per unit
  
    
    Distributable income
    
    Distributable income per unit
  
    
    Trust corpus, beginning of period (year)




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
    
    Distributable income
    
    Distributions to unitholders
    
    Trust corpus, end of period (year)




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CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
Assets
 As Originally
    
    
    
    
    
    As Reported UnderReported Under
    
    Effect of
    
    Modified Cash BasisAccrual Method
    
    Accounting Change
    
    MethodAs of December 31, 2007(Audited)Total Assets (1)
    
    $
    2,859,881
    
    
    $
    (825,486
    )
    
    $
    2,034,395As of December 31, 2006(Audited)Total assets (1)
    
    $
    2,665,574
    
    
    $
    (831,022
    )
    
    $
    1,834,552
 
 (1)
    
    Oil and gas royalties receivables are not reported as an asset under the modified cash basis
method. As a result, total assets have been reduced by the amount of oil and gas royalties
receivables previously reported. Liabilities and Trust Corpus
 As Originally
    
    
    
    
    
    
    As Reported UnderReported Under
    
    
    Effect of
    
    
    Modified Cash BasisAccrual Method
    
    
    Accounting Change
    
    
    MethodAs of December 31, 2007(Audited)Trust Corpus (1)
    
    $
    1,943,984
    
    
    $
    (825,486
    )
    
    $
    1,118,498Total liabilities and trust corpus (1)
    
    $
    2,859,881
    
    
    $
    (825,486
    )
    
    $
    2,034,395As of December 31, 2006(Audited)Trust corpus (1)
    
    $
    1,909,743
    
    
    $
    (831,022
    )
    
    $
    1,078,721Total liabilities and trust corpus (1)
    
    $
    2,665,574
    
    
    $
    (831,022
    )
    
    $
    1,834,552
 
 (1)
    
    Oil and gas royalties receivables are not reported as trust corpus under the modified cash
basis method. As a result, trust corpus and total liabilities and trust corpus have been
reduced by the amount of oil and gas royalties receivables previously reported.




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CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME
 As Reported UnderAs Originally
    
    
    
    
    
    Modified CashReported Under
    
    Effect of
    
    BasisAccrual Method
    
    Accounting Change
    
    MethodAs of December 31, 2007(Audited)Oil and gas royalties
    
    $
    4,220,076
    
    
    $
    5,536
    
    
    $
    4,225,612Total income
    
    $
    4,285,515
    
    
    $
    5,536
    
    
    $
    4,291,051Distributable income before Federal income taxes
    
    $
    4,113,708
    
    
    $
    5,536
    
    
    $
    4,119,244As of December 31, 2006(Audited)Oil and gas royalties
    
    $
    2,025,412
    
    
    $
    (696,588
    )
    
    $
    1,328,824Total income
    
    $
    2,067,410
    
    
    $
    (696,588
    )
    
    $
    1,370,822Distributable income before Federal income taxes
    
    $
    1,931,430
    
    
    $
    (696,588
    )
    
    $
    1,234,842As of December 31, 2005(Audited)Oil and gas royalties
    
    $
    2,362,759
    
    
    $
    261,582
    
    
    $
    2,624,341Interest and other income (1)
    
    $
    36,954
    
    
    $
    1,403
    
    
    $
    38,357Total income
    
    $
    2,399,713
    
    
    $
    262,985
    
    
    $
    2,662,698Distributable income before Federal income taxes
    
    $
    2,259,038
    
    
    $
    262,985
    
    
    $
    2,522,023
 
 (1)
    
    This change relates to interest income that was previously accrued for in 2004 but was
not received until 2005.




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)
 (3) SUPPLEMENTAL INFORMATION RELATING TO OIL AND NATURAL GAS RESERVES (UNAUDITED)
  For Year Ended December 31,2008
    
    2007
    
    2006Net production quantities:Oil (bbls)
    
    
    4,603
    
    
    
    7,071
    
    
    
    5,789Natural gas (mcf)
    
    
    428,728
    
    
    
    515,260
    
    
    
    141,572
 (4) SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)
  Oil and
    
    
    
    
    
    
    DistributableNatural Gas
    
    
    Distributable
    
    
    Income PerRoyalties
    
    
    Income
    
    
    UnitQuarter ended:March 31, 2008 (Restated)
    
    $
    1,041,493
    
    
    $
    951,070
    
    
    $
    0.69June 30, 2008
    
    
    987,340
    
    
    
    914,886
    
    
    
    0.66September 30, 2008
    
    
    1,383,855
    
    
    
    1,269,745
    
    
    
    0.92December 31, 2008
    
    
    1,162,022
    
    
    
    1,094,507
    
    
    
    0.78$
    4,574,710
    
    
    $
    4,230,208
    
    
    $
    3.05Quarter ended:March 31, 2007 (Restated)
    
    $
    1,103,670
    
    
    $
    1,062,963
    
    
    $
    0.77June 30, 2007 (Restated)
    
    
    1,095,667
    
    
    
    1,051,249
    
    
    
    0.76September 30, 2007 (Restated)
    
    
    1,136,840
    
    
    
    1,100,420
    
    
    
    0.79December 31, 2007 (Restated)
    
    
    889,435
    
    
    
    853,012
    
    
    
    0.62$
    4,225,612
    
    
    $
    4,067,644
    
    
    $
    2.94
 (5) TEXAS FRANCHISE TAX
  e.g. e.g.




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