##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to  .
 Commission File No. 000-08565
 Marine Petroleum Trust
  Texas
(State or other jurisdiction of 
incorporation or organization)
    
    75-6008017
(I.R.S. Employer
Identification No.)c/o The Corporate Trustee:U.S. Trust, Bank of America Private Wealth Management 
P. O. Box 830650, Dallas, Texas
(Address of principal executive offices)
    
    75283-0650
(Zip Code)
 (800) 985-0794
 None
 Units of Beneficial Interest
 o þ
 o þ
  þ o
 þ
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ
  o þ




---



##### 



TABLE OF CONTENTS
 PagePART 1Item 1.
    
    Business
    
    
    2Item 1A.
    
    Risk Factors
    
    
    4Item 1B.
    
    Unresolved Staff Comments
    
    
    7Item 2.
    
    Properties
    
    
    7Item 3.
    
    Legal Proceedings
    
    
    9Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    9PART IIItem 5.
    
    Market for Registrants Common Equity, Related Unitholder Matters and Issuer
Purchases of Equity Securities
    
    
    9Item 6.
    
    Selected Financial Data
    
    
    10Item 7.
    
    Trustees Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 8.
    
    Financial Statements and Supplementary Data
    
    
    16Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    16Item 9A.
    
    Controls and Procedures
    
    
    17Item 9B.
    
    Other Information
    
    
    17PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    17Item 11.
    
    Executive Compensation
    
    
    18Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Unitholder Matters
    
    
    18Item 13.
    
    Certain Relationships and Related Transactions
    
    
    18Item 14.
    
    Principal Accountant Fees and Services
    
    
    19PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    19Preferability LetterCertification of the Corporate Trustee Pursuant to Section 302Certification of the Corporate Trustee Pursuant to Section 906Consolidated Financial Statements
  -1-




---



##### Table of Contents



ITEM 1.
    
    BUSINESS
 Organization
 th th
    Royalties
   -2-




---



##### Table of Contents



Year Ended June 30,Company
    
    2008
    
    2007
    
    2006Chevron USA, Inc.
    
    
    56
    %
    
    
    63
    %
    
    
    65
    %Walter Oil & Gas Corporation
    
    
    3
    %
    
    
    7
    %
    
    
    8
    %Anglo Suisse Offshore Partners LLP
    
    
    9
    %
    
    
    6
    %
    
    
    6
    %Century Exploration Company
    
    
    6
    %
    
    
    5
    %
    
    
    5
    %Devon Energy Production Company
    
    
    2
    %
    
    
    4
    %
    
    
    1
    %Apache Corporation
    
    
    5
    %
    
    
    3
    %
    
    
    Newfield Exploration Company
    
    
    1
    %
    
    
    2
    %
    
    
    2
    %Energy XXI GOM LLC
    
    
    3
    %
    
    
    2
    %
    
    
    SPN Resources LLC
    
    
    4
    %
    
    
    2
    %
    
    
    W&T Offshore Inc.
    
    
    2
    %
    
    
    2
    %
    
    
    McMoran Oil and Gas LLC
    
    
    2
    %
    
    
    
    
    
    
    Kerr-McGee Corporation
    
    
    
    
    
    
    1
    %
    
    
    3
    %BP America Production Company
    
    
    
    
    
    
    1
    %
    
    
    2
    %Others
    
    
    7
    %
    
    
    2
    %
    
    
    8
    %100
    %
    
    
    100
    %
    
    
    100
    %
   Trust Functions Item 10. Directors and Executive Officers
of the Registrant
   -3-




---



##### Table of Contents



Item 2. Properties
  
 ITEM 1A.
    
    RISK FACTORS
  Marine is unable to acquire royalty interests in any more leases.
  Royalty interests are depleting assets and, if the working interest owners or other operators of
the leases do not perform additional development projects, the assets may deplete faster than
expected or entirely.
  Oil and natural gas prices are volatile and fluctuate due to a number of factors, and lower prices
will reduce royalty payments to Marine and distributions to its unitholders.
  
    
    political conditions worldwide, in particular political disruption, war or
other armed conflicts in oil producing regions;
    
    worldwide economic conditions;
    
    weather conditions;
    
    the supply and price of foreign oil and natural gas;
    
    the level of consumer demand;
    
    the price and availability of alternative fuels;
    
    the proximity to, and capacity of, transportation facilities; and
    
    the effect of worldwide energy conservation measures.
  -4-




---



##### Table of Contents



Operating risks for the working interest owners interests on the leases can adversely affect
distributions.
  The owner of any underlying properties of the leases may transfer any of the properties to another
unrelated third party.
  The owner of any underlying properties of the leases may abandon any property, terminating the
related royalty interest Marine may hold.
  The Trustee, Marine and its unitholders do not control the operation or development of the
underlying properties of the leases and have little influence over operation or development.
  Important reserve and other information with respect to the particular leases subject to Marines
royalty interest is difficult to obtain.
  -5-




---



##### Table of Contents



Terrorism and continued geopolitical hostilities could adversely affect Marines distributions to
its unitholders or the market price of its units.
  Unitholders have limited voting rights.
  The limited liability of the unitholders is uncertain.
  Marines royalty interest can be sold and the Trust can be terminated.
  The operators of the working interest owner are subject to extensive governmental regulation.
  If it is determined that Marine is subject to the Texas franchise tax, the Trustee may have to
withhold an amount from future distributions to pay the tax liability.
  i.e.
 -6-




---



##### Table of Contents



ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
 General
 Reserves Difficulty in Obtaining Certain Data
    -7-




---



##### Table of Contents



Production
 Year Ended June 30,2008
    
    2007
    
    2006Net quantities sold:Oil (in barrels (bbls))
    
    
    35,620
    
    
    
    43,242
    
    
    
    36,420Natural Gas (in thousands of cubic feet (mcf))
    
    
    239,484
    
    
    
    288,247
    
    
    
    233,630Weighted average sales price for royalty oil and
natural gas sold:Oil (per bbl) (1)
    
    $
    81.89
    
    
    $
    60.63
    
    
    $
    52.69Natural Gas (per mcf)(1)
    
    $
    7.98
    
    
    $
    7.05
    
    
    $
    8.88
 
 (1)
    
    The weighted average sales price is calculated from data provided by the operators. Item 7. Trustees Discussion and Analysis of Financial Condition and
Results of Operations
 Productive Wells Difficulty in Obtaining Certain Data
 Drilling Activity
 Year Ended June 30,2008
    
    2007
    
    2006DevelopmentOil
    
    
    10
    
    
    
    15
    
    
    
    10Natural Gas
    
    
    13
    
    
    
    30
    
    
    
    15Dry
    
    
    1
    
    
    
    3
    
    
    
    2Totals
    
    
    24
    
    
    
    48
    
    
    
    27
  Lease Acreage
 ProducingLeases Granted by(1):
    
    AcreageUnited States
    
    
    232,554State of Texas
    
    
    640State of Louisiana
    
    
    4,890238,084
 
 (1)
    
    Leases are typically granted for a term of five years, during which the lease
owner must establish a commercial production capability, or the lease expires.
Marines overriding royalty area is -8-




---



##### Table of Contents



determined by a contract that defines the area in which Marine is entitled to
receive a royalty interest. In some cases, that area does not cover an entire lease
block. In those cases, Marines royalty interest only applies to the area that lies
within the lease. There are 3,958 acres located on leases that have commercial
production, but the production is not on Marines overriding royalty area within
those leases.  Trust
    
    Acres
    
    InterestTidelands
    
    
    22,948
    
    
    
    1.1928
    %Marine
    
    
    111,432
    
    
    
    0.7500
    %Marine
    
    
    1527
    
    
    
    0.5000
    %Marine
    
    
    40151
    
    
    
    0.3750
    %Marine
    
    
    62026
    
    
    
    0.1867
    %Summary
    
    
    238,084
    
    
    
    0.5811
    %
 Present Activities
 Difficulty in Obtaining Certain Data
 
 ITEM 3.
    
    LEGAL PROCEEDINGS
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  -9-




---



##### Table of Contents



Sales Price
    
    DistributionsQuarter Ending
    
    High
    
    Low
    
    Per UnitSeptember 30, 2007
    
    $
    36.10
    
    
    $
    28.00
    
    
    $
    0.77December 31, 2007
    
    
    45.00
    
    
    
    34.00
    
    
    
    0.76March 31, 2008
    
    
    36.99
    
    
    
    27.38
    
    
    
    0.65June 30, 2008
    
    
    35.50
    
    
    
    30.11
    
    
    
    0.75September 30, 2006
    
    $
    31.00
    
    
    $
    19.58
    
    
    $
    0.57December 31, 2006
    
    
    26.24
    
    
    
    22.29
    
    
    
    0.58March 31, 2007
    
    
    27.79
    
    
    
    23.20
    
    
    
    0.61June 30, 2007
    
    
    32.64
    
    
    
    26.05
    
    
    
    0.70
      
 ITEM 6.
    
    SELECTED FINANCIAL DATA
 Item 7. Trustees Discussion and Analysis of Financial
Condition and Results of Operations
 -10-




---



##### Table of Contents



Year Ended June 30,(In Thousands Except Per Unit Amounts)2007
    
    
    2006
    
    
    2005
    
    
    20042008
    
    
    (Audited and
    
    
    (Audited and
    
    
    (Unaudited and
    
    
    (Unaudited and(Audited)
    
    
    Restated)
    
    
    Restated)
    
    
    Restated)
    
    
    Restated)Statement of Distributable Income
Selected Data:Income:Oil and natural gas royalties
    
    $
    4,827
    
    
    $
    4,654
    
    
    $
    3,993
    
    
    $
    4,206
    
    
    $
    4,515Equity in Tidelands
    
    
    1,313
    
    
    
    623
    
    
    
    725
    
    
    
    420
    
    
    
    144Interest
    
    
    59
    
    
    
    79
    
    
    
    55
    
    
    
    29
    
    
    
    27$
    6,199
    
    
    $
    5,356
    
    
    $
    4,773
    
    
    $
    4,655
    
    
    $
    4,686Expenses:General and administrative
    
    $
    314
    
    
    $
    218
    
    
    $
    218
    
    
    $
    207
    
    
    $
    227Federal income taxes of subsidiary
    
    
    21
    
    
    
    20
    
    
    
    8
    
    
    
    3
    
    
    
    335
    
    
    
    238
    
    
    
    226
    
    
    
    210
    
    
    
    227Distributable income
    
    $
    5,864
    
    
    $
    5,118
    
    
    $
    4,547
    
    
    $
    4,445
    
    
    $
    4,459Distributions to unitholders
    
    $
    5,847
    
    
    $
    4,921
    
    
    $
    4,472
    
    
    $
    4,576
    
    
    $
    5,259Distributable income per unit
    
    $
    2.93
    
    
    $
    2.56
    
    
    $
    2.27
    
    
    $
    2.22
    
    
    $
    2.23Distributions per unit
    
    $
    2.92
    
    
    $
    2.46
    
    
    $
    2.24
    
    
    $
    2.29
    
    
    $
    2.63
 2007
    
    
    2006
    
    
    2005
    
    
    20042008
    
    
    (Audited and
    
    
    (Unaudited and
    
    
    (Unaudited and
    
    
    (Unaudited and(Audited)
    
    
    Restated)
    
    
    Restated)
    
    
    Restated)
    
    
    Restated)Statement of Assets, Liabilities and
Trust Corpus Selected Data:Total assets
    
    $
    1,680
    
    
    $
    1,661
    
    
    $
    1,459
    
    
    $
    1,383
    
    
    $
    1,514Trust corpus
    
    $
    1,670
    
    
    $
    1,653
    
    
    $
    1,457
    
    
    $
    1,382
    
    
    $
    1,514
 
 ITEM 7.
    
    TRUSTEES DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Change in Accounting Method.
    -11-




---



##### Table of Contents




    
    Oil and gas royalties receivable
    
    Undistributed income
  
    
    Net income
    
    Undistributed income at beginning of year
    
    Distributions to unitholders
    
    Undistributed income at end of year
    
    Net income per unit
  
    
    Distributable income
    
    Distributable income per unit
  
    
    Trust corpus, beginning of year
    
    Distributable income
    
    Distributions to unitholders
    
    Trust corpus, end of year
 Critical Accounting Policies
 
    
    Royalty income is recognized when received by Marine.
    
    Marines expenses (which include accounting, legal, and other professional fees,
Trustees fees and out-of-pocket expenses) are recorded on an accrual basis.
Reserves for liabilities that are contingent or uncertain in amount may also be
established if considered necessary.
    
    Distributions to unitholders are recognized when declared by the Trustee of the
Trust.
 -12-




---



##### Table of Contents




    
    Royalty income is recognized in the month received rather than in the month of
production.
    
    Reserves may be established for contingencies that would not be recorded under
GAAP.
   Results of Operations.
  Summary Review.
    -13-




---



##### Table of Contents



Year Ended June 30,2008
    
    2007
    
    2006Drilled or Recompleted
    
    
    24
    
    
    
    48
    
    
    
    27Producing
    
    
    240
    
    
    
    240
    
    
    
    260
  Year Ended June 30,2008
    
    2007
    
    % ChangeIncome from:Oil royalties
    
    $
    2,916,843
    
    
    $
    2,621,591
    
    
    
    11.3
    %Natural gas royalties
    
    $
    1,909,973
    
    
    $
    2,032,813
    
    
    
    (6.0
    )%Totals
    
    $
    4,826,816
    
    
    $
    4,654,404
    
    
    
    3.7
    %Net quantities sold:Oil (bbls)
    
    
    35,620
    
    
    
    43,242
    
    
    
    (17.6
    )%Natural gas (mcf)
    
    
    239,484
    
    
    
    288,247
    
    
    
    (16.9
    )%Average price:Oil (1)
    
    $
    81.89
    
    
    $
    60.63
    
    
    
    35.1
    %Natural gas (1)
    
    $
    7.98
    
    
    $
    7.05
    
    
    
    13.2
    %
 
 (1)
    
    These amounts are net of the cost of transportation from offshore leases to onshore
receiving points.  Year Ended June 30,2007
    
    2006
    
    % ChangeIncome from:Oil royalties
    
    $
    2,621,591
    
    
    $
    1,918,946
    
    
    
    36.6
    %Natural gas royalties
    
    $
    2,032,813
    
    
    $
    2,063,864
    
    
    
    (1.5
    )%Totals
    
    $
    4,654,404
    
    
    $
    3,992,910
    
    
    
    16.6
    %Net quantities sold:Oil (bbls)
    
    
    43,242
    
    
    
    36,420
    
    
    
    18.7
    %Natural gas (mcf)
    
    
    288,247
    
    
    
    233,630
    
    
    
    23.4
    %Average price:Oil (1)
    
    $
    60.63
    
    
    $
    52.69
    
    
    
    15.1
    %Natural gas (1)
    
    $
    7.05
    
    
    $
    8.88
    
    
    
    (20.6
    )%
 
 (1)
    
    These amounts are net of the cost of transportation from offshore leases to onshore
receiving points. -14-




---



##### Table of Contents



Oil and Gas Royalties  2008 and 2007
    Oil and Gas Royalties  2007 and 2006
    Capital Resources and Liquidity
    -15-




---



##### Table of Contents



Forward-Looking Statements
 
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  PageReport
of Independent Registered Public Accounting Firm
    
    
    20Financial Statements:Consolidated Statements of Assets, Liabilities and
Trust Corpus as of June 30, 2008 and
2007
    
    
    21Consolidated Statements of Distributable
Income for the Three Years Ended June 30, 2008
    
    
    22Consolidated Statements of Changes
in Trust Corpus for the Three Years Ended June 30,
2008
    
    
    23Notes
to Consolidated Financial Statements
    
    
    24
 Item 15. Exhibits, Financial Statement Schedules
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  -16-




---



##### Table of Contents



ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Trustees Report on Internal Control Over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION
  
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Directors and Officers.
 Section 16(a) Beneficial Ownership Reporting Compliance
 Code of Ethics. th
 Committees.
 -17-




---



##### Table of Contents



ITEM 11.
    
    EXECUTIVE COMPENSATION
  Other AnnualName of Individual or Entity
    
    Year
    
    Compensation(1)U.S. Trust, Bank of America Private
Wealth Management, the Trustee
    
    
    2008
    
    
    $
    35,3582007
    
    
    $
    35,5662006
    
    
    $
    33,976
 
 (1)
    
    Under the Indenture, the Trustee is entitled to reasonable and customary fees and
compensation for its services. 
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED UNITHOLDER MATTERS
  Amount and Nature ofName and Address
    
    Beneficial Ownership
    
    Percent of ClassRobert H. Paslay
    
    204,368 units
    
    
    10.2
    %1007 Gasserway Circle
Brentwood, TN 37027Patricia Martin
    
    174,529 units
    
    
    8.7
    %110 Woodbine Place
Missoula, MT 59803
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  Name of Entity
    
    Year
    
    Amount PaidTidelands Royalty Trust B Corporation
    
    
    2008
    
    
    $
    48,8862007
    
    
    $
    46,0322006
    
    
    $
    23,446
 -18-




---



##### Table of Contents



ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2008
    
    2007Audit Fees
    
    $
    84,772
    
    
    $
    44,575Audit-Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    
 Item 10. Directors and Executive Officers of the Registrant
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 Item 8. Financial Statements and Supplementary Data
   4.1
    
    Indenture, as amended on December 8, 2000, of Marine Petroleum
Trust, filed as Exhibit 4.1 to the Annual Report on Form 10-K of Marine for the
fiscal year ended June 30, 2001, and incorporated by reference herein.18.1*
    
    Preferability Letter of KPMG LLP, independent registered
public accounting firm, regarding the Accounting Change.21.1
    
    Subsidiaries of Marine, filed as Exhibit 21.1 to the Annual
Report on Form 10-K of Marine for the fiscal year ended June 30, 2002, and
incorporated by reference herein.31.1*
    
    Certification of the Corporate Trustee pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of the Corporate Trustee pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.99.1*
    
    Consolidated financial statements of Tidelands Royalty Trust
B for the fiscal year ended December 31, 2007, and report of KPMG LLP,
independent registered public accounting firm.
 
 *
    
    Filed herewith.  -19-




---



##### Table of Contents



Independent Auditors Report
 
       
 -20-




---



##### Table of Contents



MARINE PETROLEUM TRUST AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
As of June 30, 2008 and 2007
(Audited)
 June 30,June 30,
    
    
    20072008
    
    
    (Restated)AssetsCurrent assets:Cash and cash equivalents
    
    $
    1,668,486
    
    
    $
    1,636,082Producing oil and gas properties
    
    
    7
    
    
    
    7Receivable from affiliate
    
    $
    11,274
    
    
    $
    24,923Total assets
    
    $
    1,679,767
    
    
    $
    1,661,012Liabilities and Trust CorpusCurrent liabilities:Federal income taxes payable
    
    
    9,300
    
    
    
    7,600Total current liabilities
    
    $
    9,300
    
    
    $
    7,600Trust Corpus  authorized 2,000,000 units of
beneficial interest, issued 2,000,000 units at
nominal value
    
    
    1,670,467
    
    
    
    1,653,412$
    1,679,767
    
    
    $
    1,661,012
  -21-




---



##### Table of Contents



MARINE PETROLEUM TRUST AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME
For the Three Years Ended June 30, 2008
(Audited)
 2007
    
    
    20062008
    
    
    (Restated)
    
    
    (Restated)Income:Oil and natural gas royalties
    
    $
    4,826,816
    
    
    $
    4,654,404
    
    
    $
    3,992,910Oil and natural gas royalties from affiliate
    
    $
    1,313,536
    
    
    $
    623,391
    
    
    $
    724,537Interest income
    
    
    58,712
    
    
    
    78,418
    
    
    
    54,918Total income
    
    
    6,199,064
    
    
    
    5,356,213
    
    
    
    4,772,365Expenses:General and administrative
    
    
    313,865
    
    
    
    218,089
    
    
    
    217,665Distributable income before Federal income taxes
    
    
    5,885,199
    
    
    
    5,138,124
    
    
    
    4,554,670Federal income taxes of subsidiary
    
    
    20,700
    
    
    
    19,950
    
    
    
    7,800Distributable income
    
    $
    5,864,499
    
    
    $
    5,118,174
    
    
    $
    4,546,900Distributable income per unit
    
    $
    2.93
    
    
    $
    2.56
    
    
    $
    2.27Distributions per unit
    
    $
    2.92
    
    
    $
    2.46
    
    
    $
    2.24Units outstanding
    
    
    2,000,000
    
    
    
    2,000,000
    
    
    
    2,000,000
  -22-




---



##### Table of Contents



MARINE PETROLEUM TRUST AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF CHANGES IN TRUST CORPUS
For the Three Years Ended June 30, 2008
(Audited)
 2007
    
    
    20062008
    
    
    (Restated)
    
    
    (Restated)Trust corpus, beginning of year
    
    $
    1,653,412
    
    
    $
    1,456,939
    
    
    $
    1,382,455Distributable income
    
    
    5,864,499
    
    
    
    5,118,174
    
    
    
    4,546,900Distributions to unitholders
    
    
    5,847,444
    
    
    
    4,921,701
    
    
    
    4,472,416Trust corpus, end of year
    
    $
    1,670,467
    
    
    $
    1,653,412
    
    
    $
    1,456,939
  -23-




---



##### Table of Contents



MARINE PETROLEUM TRUST AND SUBSIDIARY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Years Ended June 30, 2008
 (1) Summary of Significant Accounting Policies
 (a) General
     (b) Principles of Consolidation
  (c) Producing Oil and Gas Properties
   (d) Federal Income Taxes
    -24-




---



##### Table of Contents



(e) Credit Risk Concentration and Cash Equivalents
   (f) Use of Estimates
  (g) Distributable Income per Unit
  (h) Significant Royalty Sources
  Year Ended June 30,Company
    
    2008
    
    2007
    
    2006Chevron USA, Inc.
    
    
    56
    %
    
    
    63
    %
    
    
    65
    %Walter Oil & Gas Corporation
    
    
    3
    %
    
    
    7
    %
    
    
    8
    %Anglo Suisse Offshore Partners LLP
    
    
    9
    %
    
    
    6
    %
    
    
    6
    %Century Exploration Company
    
    
    6
    %
    
    
    5
    %
    
    
    5
    %Devon Energy Production Company
    
    
    2
    %
    
    
    4
    %
    
    
    1
    %Apache Corporation
    
    
    5
    %
    
    
    3
    %
    
    
    Newfield Exploration Company
    
    
    1
    %
    
    
    2
    %
    
    
    2
    %Energy XXI GOM LLC
    
    
    3
    %
    
    
    2
    %
    
    
    SPN Resources LLC
    
    
    4
    %
    
    
    2
    %
    
    
    W&T Offshore Inc.
    
    
    2
    %
    
    
    2
    %
    
    
    McMoran Oil and Gas LLC
    
    
    2
    %
    
    
    
    
    
    
    Kerr-McGee Corporation
    
    
    
    
    
    
    1
    %
    
    
    3
    %BP America Production Company
    
    
    
    
    
    
    1
    %
    
    
    2
    %Others
    
    
    7
    %
    
    
    2
    %
    
    
    8
    %100
    %
    
    
    100
    %
    
    
    100
    %
 (2) Change in Accounting Method
  -25-




---



##### Table of Contents




    
    Oil and gas royalties receivable
    
    Undistributed income
  
    
    Net income
    
    Undistributed income at beginning of year
    
    Distributions to unitholders
    
    Undistributed income at end of year
    
    Net income per unit
  
    
    Distributable income
    
    Distributable income per unit
  
    
    Trust corpus, beginning of year
    
    Distributable income
    
    Distributions to unitholders
    
    Trust corpus, end of year
 -26-




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
 Assets
 As Originally Reported
    
    Effect of
    
    As Reported UnderUnder Accrual Method
    
    Accounting Change
    
    Modified Cash BasisAs of June 30, 2007Total assets (1)
    
    $
    3,819,681
    
    
    $
    (2,158,669
    )
    
    $
    1,661,012
 
 (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. Liabilities and Trust Corpus
 As Originally Reported
    
    Effect of
    
    As Reported UnderUnder Accrual Method
    
    Accounting Change
    
    Modified Cash BasisAs of June 30, 2007Trust corpus (1)
    
    $
    3,812,081
    
    
    $
    (2,158,669
    )
    
    $
    1,653,412Total liabilities
and trust corpus
(1)
    
    $
    3,819,681
    
    
    $
    (2,158,669
    )
    
    $
    1,661,012
 
 (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.  -27-




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME
 As Originally Reported
    
    Effect of
    
    As Reported UnderUnder Accrual Method
    
    Accounting Change
    
    Modified Cash BasisAs of June 30, 2007Oil and natural gas
royalties
    
    $
    4,921,413
    
    
    $
    (267,009
    )
    
    $
    4,654,404Total income
    
    $
    6,188,858
    
    
    $
    (832,645
    )
    
    $
    5,356,213Distributable
income before
Federal income
taxes
    
    $
    5,970,769
    
    
    $
    (832,645
    )
    
    $
    5,138,124As of June 30, 2006Oil and natural gas
royalties
    
    $
    3,942,070
    
    
    $
    50,840
    
    
    $
    3,992,910Total income
    
    $
    4,400,822
    
    
    $
    371,543
    
    
    $
    4,772,365Distributable
income before
Federal income
taxes
    
    $
    4,183,157
    
    
    $
    371,513
    
    
    $
    4,554,670
  (3) Investment in and Receivables from Affiliate  Tidelands Royalty Trust B
   -28-




---



##### Table of Contents



TIDELANDS CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
 June 30,
    
    
    June 30,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,048,006
    
    
    $
    2,278,043Oil, natural gas and other mineral properties
    
    
    2
    
    
    
    2Total assets
    
    $
    2,048,008
    
    
    $
    2,278,045Liabilities and Trust CorpusCurrent liabilities:Accounts payable
    
    $
    11,279
    
    
    $
    24,928Federal income taxes payable
    
    
    4,196
    
    
    
    14,351Income distributable to unitholders
    
    
    872,871
    
    
    
    996,271Total current liabilities
    
    $
    888,346
    
    
    $
    1,035,550Trust Corpus  authorized 1,386,525 units of
beneficial interest, issued 1,386,375 units at
nominal value
    
    
    1,159,662
    
    
    
    1,242,495$
    2,048,008
    
    
    $
    2,278,045
 TIDELANDS CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME
 Year Ended June 30,2008
    
    
    2007
    
    
    2006Income
    
    $
    4,105,079
    
    
    $
    3,267,744
    
    
    $
    1,666,388Expenses
    
    
    238,291
    
    
    
    163,118
    
    
    
    125,975Distributable income before Federal income
taxes
    
    
    3,866,788
    
    
    
    3,104,626
    
    
    
    1,540,413Federal income taxes of Tidelands subsidiary
    
    
    47,400
    
    
    
    38,250
    
    
    
    15,289Distributable income
    
    $
    3,819,388
    
    
    $
    3,066,376
    
    
    $
    1,525,124
  (4) Summary of Quarterly Financial Data (Unaudited)
  -29-




---



##### Table of Contents



DistributableOil and Gas
    
    
    
    
    
    
    Distributable
    
    
    IncomeRoyalties
    
    
    Expenses
    
    
    Income
    
    
    Per UnitQuarter ended:September 30, 2007 (Restated)
    
    $
    1,321,266
    
    
    $
    54,256
    
    
    $
    1,605,456
    
    
    $
    0.80December 31, 2007 (Restated)
    
    
    989,059
    
    
    
    88,837
    
    
    
    1,301,128
    
    
    
    0.65March 31, 2008 (Restated)
    
    
    1,225,908
    
    
    
    106,299
    
    
    
    1,423,529
    
    
    
    0.71June 30, 2008
    
    
    1,290,583
    
    
    
    64,473
    
    
    
    1,534,386
    
    
    
    0.77$
    4,826,816
    
    
    $
    313,865
    
    
    $
    5,864,499
    
    
    $
    2.93Quarter ended:September 30, 2006 (Restated)
    
    $
    1,259,733
    
    
    $
    40,226
    
    
    $
    1,297,137
    
    
    $
    0.65December 31, 2006 (Restated)
    
    
    1,103,926
    
    
    
    72,218
    
    
    
    1,062,743
    
    
    
    0.53March 31, 2007 (Restated)
    
    
    1,197,725
    
    
    
    62,099
    
    
    
    1,385,616
    
    
    
    0.69June 30, 2007 (Restated)
    
    
    1,093,020
    
    
    
    43,546
    
    
    
    1,372,678
    
    
    
    0.69$
    4,654,404
    
    
    $
    218,089
    
    
    $
    5,118,174
    
    
    $
    2.56
  Oil and Gas
    
    
    Distributable
    
    
    DistributableRoyalties
    
    
    Income
    
    
    Income per UnitQuarter ended:September 30, 2007
    
    $
    275,167
    
    
    $
    274,663
    
    
    $
    0.14December 31, 2007
    
    
    51,740
    
    
    
    156,863
    
    
    
    0.08March 31, 2008
    
    
    (132,075
    )
    
    
    (172,058
    )
    
    
    (0.09
    )June 30, 2008
    
    
    0
    
    
    $
    0
    
    
    
    0$
    194,831
    
    
    $
    259,468
    
    
    $
    0.13Quarter ended:September 30, 2006
    
    $
    63,325
    
    
    $
    (60,088
    )
    
    $
    (0.03
    )December 31, 2006
    
    
    15,563
    
    
    
    (239,485
    )
    
    
    (0.12
    )March 31, 2007
    
    
    (93,824
    )
    
    
    (242,092
    )
    
    
    (0.12
    )June 30, 2007
    
    
    (252,072
    )
    
    
    (290,980
    )
    
    
    (0.15
    )$
    (267,009
    )
    
    $
    (832,645
    )
    
    $
    (0.42
    )
 (5) Supplemental Information Relating to Oil and Gas Reserves (Unaudited)
  -30-




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Marine:Oil (barrels)
    
    
    35,620
    
    
    
    43,242
    
    
    
    36,420Gas (mcf)
    
    
    239,484
    
    
    
    288,247
    
    
    
    233,630Tidelands:Oil (barrels)
    
    
    1,952
    
    
    
    2,231
    
    
    
    1,698Gas (mcf)
    
    
    147,188
    
    
    
    127,074
    
    
    
    54,745
 (6) Texas Margin Tax
  e.g. e.g.
   -31-




---



##### Table of Contents



SIGNATURES
  
 By: U.S. Trust, Bank of America
Private Wealth Management in its capacity as trustee of Marine Petroleum Trust and not in its
individual capacity or otherwiseDate:  September 25, 2008
    By:
    /s/ Ron E. HooperRon E. HooperSenior Vice President  U.S. Trust, Bank of America Private Wealth
Management, in its capacity as trustee of
Marine Petroleum Trust and not in its
individual capacity or otherwiseDated:  September 25, 2008
    By:
    /s/ Ron E. HooperRon E. HooperSenior Vice President  -32-