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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2011

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period
from                    to                    .

Commission file number 000-08677





Tidelands Royalty Trust B

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Texas                                                          |  | 75-6007863                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                                                                |  |           
|------------------------------------------------------------------------------- |  | ----------
|c/o The Corporate Trustee U.S. Trust, Bank of America Private Wealth Management |  | 75283-0650
|P.O. Box 830650, Dallas, Texas
(Address of principal executive offices)         |  | (Zip Code)

Registrants telephone number, including area code (at the office of the Trustee):
(800) 985-0794

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Units of Beneficial Interest





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    YES   ̈    NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    YES   ̈    NO  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    YES  x    NO   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).     YES   ̈    NO   ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     x

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    YES   ̈    NO  x

Aggregate market value of the Units of Beneficial Interest held by non-affiliates of the registrant at June 30, 2011 (the last
business day of the registrants most recently completed second fiscal quarter) was approximately $7,752,275. (For purposes of determining the above stated amount, only directors, executive officers and 10% or greater stockholders have been
deemed affiliates).

Number of Units of Beneficial Interest outstanding as of March 15, 2012: 1,386,375 Units.





Documents incorporated by reference:

None.









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##### Table of Contents

TABLE OF CONTENTS



|         |  |                                                                                                              |  |  |    | 
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  |  | -- | 
|PART I   |  |                                                                                                              |  |  |    | 
|         |  |                                                                                                             
|Item 1.  |  | Business                                                                                                     |  |  | 2  | 
|         |  |                                                                                                             
|Item 1A. |  | Risk Factors                                                                                                 |  |  | 5  | 
|         |  |                                                                                                             
|Item 1B. |  | Unresolved Staff Comments                                                                                    |  |  | 9  | 
|         |  |                                                                                                             
|Item 2.  |  | Properties                                                                                                   |  |  | 9  | 
|         |  |                                                                                                             
|Item 3.  |  | Legal Proceedings                                                                                            |  |  | 11 | 
|         |  |                                                                                                             
|Item 4.  |  | Mine Safety Disclosures                                                                                      |  |  | 11 | 
|         |  |                                                                                                             
|PART II  |  |                                                                                                              |  |  |    | 
|         |  |                                                                                                             
|Item 5.  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  |  | 11 | 
|         |  |                                                                                                             
|Item 6.  |  | Selected Financial Data                                                                                      |  |  | 13 | 
|         |  |                                                                                                             
|Item 7.  |  | Trustees Discussion and Analysis of Financial Condition and Results of
Operations                           |  |  | 14 | 
|         |  |                                                                                                             
|Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  |  | 17 | 
|         |  |                                                                                                             
|Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  |  | 17 | 
|         |  |                                                                                                             
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |  |  | 18 | 
|         |  |                                                                                                             
|Item 9A. |  | Controls and Procedures                                                                                      |  |  | 18 | 
|         |  |                                                                                                             
|Item 9B. |  | Other Information                                                                                            |  |  | 19 | 
|         |  |                                                                                                             
|PART III |  |                                                                                                              |  |  |    | 
|         |  |                                                                                                             
|Item 10. |  | Directors, Executive Officers and Corporate Governance                                                       |  |  | 19 | 
|         |  |                                                                                                             
|Item 11. |  | Executive Compensation                                                                                       |  |  | 19 | 
|         |  |                                                                                                             
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters               |  |  | 19 | 
|         |  |                                                                                                             
|Item 13. |  | Certain Relationships and Related Transactions, and Director Independence                                    |  |  | 20 | 
|         |  |                                                                                                             
|Item 14. |  | Principal Accountant Fees and Services                                                                       |  |  | 20 | 
|         |  |                                                                                                             
|PART IV  |  |                                                                                                              |  |  |    | 
|         |  |                                                                                                             
|Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  |  | 21 | 



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##### Table of Contents

Part I

Item 1. Business

Organization. Tidelands Royalty Trust B (the Trust) is a royalty trust that was created on June 1, 1954, under the laws of the State of Texas. The Trust is not
permitted to engage in any business activity because it was organized for the sole purpose of providing an efficient, orderly and practical means for the administration and liquidation of rights to interests in certain oil, natural gas or other
mineral leases obtained by Gulf Oil Corporation (Gulf) in a designated area of the Gulf of Mexico. These rights are evidenced by a contract between the Trusts predecessors and Gulf dated April 30, 1951 (the 1951
Contract), which is binding upon the assignees of Gulf. As a result of various transactions that have occurred since 1951, the Gulf interests that were subject to the 1951 Contract now are held by Chevron U.S.A., Inc. (Chevron),
which is a subsidiary of Chevron Corporation, and its respective assignees.

The Tidelands Royalty Trust B
Indenture, effective June 1, 1954, as amended (the Indenture), provides that the corporate trustee is to distribute all cash in the Trust, excluding cash retained by its subsidiary, less an amount reserved for the payment of accrued
liabilities and estimated future expenses, to unitholders of record on the last business day of March, June, September and December of each year. Pursuant to the terms of the Indenture, all distributions will be sent within 15 calendar days of the
record date. U.S. Trust, Bank of America Private Wealth Management, serves as corporate trustee (the Trustee). The Indenture prohibits the operation of any kind of trade or business by the Trust.

The Indenture provides that the term of the Trust will expire on April 30, 2021, unless extended by the vote of the holders of a
majority of the outstanding units of beneficial interest.

The Trusts wholly-owned subsidiary, Tidelands Royalty
B Corporation (Tidelands Corporation, collectively with the Trust, Tidelands), holds title to interests in properties subject to the 1951 Contract that are situated offshore of Louisiana. Ninety-five percent of
all oil, natural gas and other mineral royalties collected by Tidelands Corporation, less the cost of receiving and collecting, are retained by and delivered to the Trust. Tidelands Corporation retains the remaining 5% of the overriding royalties
along with other items of income and expense until such time as the board of directors declares a dividend out of retained earnings. Tidelands Corporation, like the Trust, is prohibited from engaging in a trade or business and does only those things
necessary for the administration and liquidation of its properties.

Tidelands only industry segment or purpose is the
administration and collection of royalties.

The 1951 Contract. The 1951 Contract identifies 60 specific tracts (the
Tracts) in the Gulf of Mexico. The Tracts are not all the same size and collectively contain approximately 1,370,000 acres. Prior to the expiration of the 50-year lease acquisition period on April 30, 2001 (the Acquisition
Expiration Date), if Chevron or its assignees had acquired a lease or leases on one of the Tracts, and if oil or natural gas were produced and sold from any such Tract, then Chevron or its assignees had to make production payments to
Tidelands, in an amount equal to approximately 12.5% of the value at the wellhead of the oil and natural gas subject to such lease until the sum of $1,500,000 was paid to Tidelands under the lease. The $1,500,000 production payment has been paid on
all five leases. Thereafter, Tidelands interest in such Tracts converted to an overriding royalty as described below. At the Acquisition Expiration Date, five of the Tracts had leases, as described below, and rights to the other 55 Tracts
expired.

As of March 15, 2012, Tidelands had five assigned oil and natural gas leases covering 22,948 gross acres in the
Gulf of Mexico in the Galveston, Sabine Pass and West Cameron areas (sometimes referred to herein as the Royalty Area). As of March 15, 2012, four of the Tidelands five assigned leases contained active wells. Tidelands
overriding royalty interest on four of the five leases is 4.1662%. On the fifth lease, the overriding royalty interest is 1.0416%. The overriding royalty interest on the fifth lease is lower because Chevron only acquired a 25% working interest in
the lease.



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Since the Acquisition Expiration Date has passed, Chevron and its assignees are no longer
obligated to assign any interest to Tidelands out of any lease that they acquire on any of the Tracts. Tidelands will continue to be entitled to receive payments on the five leases acquired by Chevron or its assignees prior to the Acquisition
Expiration Date, so long as such leases are active properties. These leases and related overriding royalty interests are identified in the table below:



|             |  |       |     |  |             |  |      |       |  |  |                 |  |  |               |        |   |             |   |                           |  |  |                                                   |  |                                                                                                                                                     
|------------ |  | ----- | --- |  | ----------- |  | ---- | ----- |  |  | --------------- |  |  | ------------- | ------ | - | ----------- | - | ------------------------- |  |  | ------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Area         |  | Block |     |  | LeaseNumber |  |      | Acres |  |  | RoyaltyInterest |  |  | 2011Royalties |        |   | Operator(s) |   | Working Interest
Owner(s)
|Galveston    |  |       | 303 |  |             |  | 4565 |       |  |  | 5,760           |  |  |               | 4.1662 | % |             | $ | 114,955                   |  |  | W&T Offshore Inc.                                 |  | W&T Offshore Inc. (75.00% Ownership Interest); Sterling Energy Inc. (15.75% Ownership Interest); Barron Petroleum Company (9.25% Ownership
Interest)
|Sabine Pass  |  |       | 13  |  |             |  | 3959 |       |  |  | 3,438           |  |  |               | 4.1662 | % |             | $ | 809,123                   |  |  | Black Elk Energy Offshore Operations, LLC         |  | Black Elk Energy Offshore Operations, LLC (100.00% Ownership Interest)                                                                              
|West Cameron |  |       | 165 |  |             |  | 758  |       |  |  | 5,000           |  |  |               | 4.1662 | % |             | $ | 324,652                   |  |  | Apache Corporation                                |  | Apache Corporation (100.00% Ownership Interest)                                                                                                     
|West Cameron |  |       | 225 |  |             |  | 900  |       |  |  | 3,750           |  |  |               | 1.0416 | % |             | $ | 19,890                    |  |  | ENI US Operating Co. Inc.;
Breton Engineering LLC |  | ENI Petroleum USA LLC (68.00% Ownership Interest); Mariner Energy Resources, Inc. (32.00% Ownership Interest)                                       
|West Cameron |  |       | 291 |  |             |  | 4397 |       |  |  | 5,000           |  |  |               | 4.1662 | % |             | $ | 66,464                    |  |  | Apache Corporation                                |  | Apache Corporation (100.00% Ownership Interest)                                                                                                     
|Total        |  |       |     |  |             |  |      |       |  |  | 22,948          |  |  |               |        |   |             | $ | 1,335,084                 |  |  |                                                   |  |                                                                                                                                                     

In 2011, approximately 61% of Tidelands royalty revenues were attributable to oil and approximately
39% were attributable to natural gas. The production payments and royalty revenues received by Tidelands are affected by the producing capability of the wells, seasonal fluctuations in demand and changes in the market prices for oil and natural gas.

The following table presents the approximate percentage of royalties actually received from each royalty payor for the past
three years:



|                                                 |  |      |     |   |      |  |     |      |  |  |     |  
|------------------------------------------------ |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|Royalty Payors                                   |  | 2011 |     |   | 2010 |  |     | 2009 | 
|Black Elk Energy Offshore Operations, LLC (1)    |  |      | 55  | % |      |  |    |      |  |  |    |  
|Apache Corporation (2)                           |  |      | 29  | % |      |  | 10  | %    |  |  |    |  
|W&T Offshore Inc. (3)                            |  |      | 9   | % |      |  | 7   | %    |  |  | 7   | %
|JX Nippon Oil & Gas Exploration Corp. (NOEX) (1) |  |      | 6   | % |      |  | 34  | %    |  |  | 15  | %
|Breton Engineering LLC (4)                       |  |      | 1   | % |      |  | 3   | %    |  |  |    |  
|Devon Energy Production Company LP (2)           |  |      |    |   |      |  | 44  | %    |  |  | 78  | %
|Barron Petroleum Company (3)                     |  |      |    |   |      |  | 2   | %    |  |  |    |  
|                                                 |  |      |     |   |      |  |     |      |  |  |     |  
|                                                 |  |      | 100 | % |      |  | 100 | %    |  |  | 100 | %
|                                                 |  |      |     |   |      |  |     |      |  |  |     |  



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|(1) | During the fourth quarter of 2010, Black Elk Energy Offshore Operations, LLC completed the purchase of certain of JX Nippon Oil & Gas Exploration Corp.s
(NOEX) Gulf of Mexico leases, including in the Sabine Pass 13 Field, and it was approved by the BOEMRE (defined below) in January 2011. Tidelands royalty interest did not change as a result of this sale. Black Elk Energy Offshore Operations,
LLC began paying royalties to Tidelands in February 2011.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | During the second quarter of 2010, Apache Corporation completed the purchase of certain of Devon Energy Corporations Gulf of Mexico leases, including the leases
in the West Cameron Block 165 Field (which includes Block 291). Tidelands royalty interest did not change as a result of this sale.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | W&T Offshore Inc. currently pays royalties for its 75.00% working interest and the oil royalty on a 9.25% working interest Galveston Block 303. Sterling Energy Inc.
and Barron Petroleum Company, owners of 25.00% of the working interest, are not paying royalties to Tidelands pending these parties reaching an agreement on which working interest owner is responsible for making the payments. Tidelands has not
received further updates regarding responsibility for these payments, which in 2011 would have been expected to total approximately $38,000.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Breton Engineering LLC is not a working interest owner of record but pays the royalties due to Tidelands from West Cameron Block 225.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

Tidelands derives no revenues from foreign sources and has no export sales.

Trust Functions. The Trust is administered by officers and employees of the Trustee. The Trust has no employees. See Item
10. Directors, Executive Officers and Corporate Governance.

All aspects of Tidelands operations are conducted by
third parties. These operations include the production and sale of oil and natural gas and the calculation of royalty payments to Tidelands, which are conducted by oil and natural gas companies that lease Tracts subject to Tidelands interests.
American Stock Transfer and Trust Company, LLC is the transfer agent for Tidelands and is responsible for reviewing, processing and paying distributions.

Marine Petroleum Trust (Marine) is a 32.6% unitholder of the Trust. Marine Petroleum Corporation, a wholly-owned subsidiary of Marine, leases office space in Dallas, Texas to provide work
space and record storage for Marine, Marine Petroleum Corporation, the Trust and Tidelands Corporation. The cost of this office facility is shared by Marine Petroleum Corporation and Tidelands Corporation in proportion to each entitys gross
income to the total income of both entities.

The ability of Tidelands to receive revenues is entirely dependent upon its
entitlement to its rights with respect to the five leases held by Chevron and its assignees in the Gulf of Mexico (as more fully described in Item 2. Properties below).

The royalty interests held by Tidelands are depleting with each barrel (bbl) of oil and thousand cubic feet (mcf)
of natural gas produced. No funds are reinvested by Tidelands; thus, these depleting assets are not being replaced.

Widely
Held Fixed Investment Trust Reporting Information.The Trustee assumes that some units of beneficial interest are held by middlemen, as such term is broadly defined in U.S. Treasury Regulations (and includes custodians, nominees, certain
joint owners, and brokers holding an interest for a customer in street name). Therefore, the Trustee considers the Trust to be a widely held fixed investment trust (WHFIT) for U.S. Federal income tax purposes. Accordingly, the Trust will
provide tax information in accordance with applicable U.S. Treasury Regulations governing the information reporting requirements of the Trust as a WHFIT. The representative of the Trust that will provide the required information is the Trustee, and
the contact information for the representative is as follows:

U.S. Trust, Bank of America Private Wealth Management

P.O. Box 830650

Dallas, Texas 75283-0650

Telephone number: (800) 985-0794



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Each unitholder should consult his or her own tax advisor for tax reporting matters.

Item 1A. Risk Factors

Although various risk factors and specific cautionary statements are described elsewhere in this Annual Report on Form 10-K, the following is a summary of the principal risks associated with an
investment in units of the Trust.

Tidelands is unable to acquire royalty interests in any more leases.

Since the Acquisition Expiration Date has passed, Chevron and its assignees are no longer obligated to assign any interest to Tidelands
out of any lease that they acquire on any of the Tracts. In addition, Tidelands is not permitted to carry on any business, including making investments in additional oil and natural gas interests. Tidelands will continue to be entitled to receive
payments on the five leases acquired by Chevron or its assignees prior to the Acquisition Expiration Date, so long as the leases exist and such leases contain active wells. Once the leases terminate or expire, any overriding royalties payable to
Tidelands will terminate and Tidelands cannot acquire any additional or replacement royalty interests.

Royalty interests are depleting
assets and may deplete faster than expected or entirely.

The net proceeds payable to Tidelands are derived from the sale
of depleting assets. Accordingly, the portion of the distributions to unitholders attributable to depletion may be considered a return of capital as opposed to a return on investment. Distributions that are considered a return of capital will
ultimately diminish the depletion tax benefits available to unitholders, which could reduce the market value of the units over time.

The reduction in proved reserve quantities is a common measure of depletion. Future maintenance and development projects in the Royalty Area will likely affect the quantity of proved reserves. The timing
and size of these projects will depend on the market prices of oil and natural gas. If operators of the Royalty Area do not implement additional maintenance and development projects, the future rate of production decline of proved reserves may be
higher than the rate currently experienced by Tidelands. Eventually, the properties in the Royalty Area will stop producing in commercial quantities, and Tidelands will therefore cease to receive any distributions of net proceeds therefrom.

Oil and natural gas prices are volatile and fluctuate due to a number of factors, and lower prices will reduce royalty payments to
Tidelands and distributions to its unitholders.

Tidelands quarterly distributions are highly dependent upon the
prices realized from the sale of oil and natural gas. A significant downward movement in the prices for oil and natural gas could have a material adverse effect on Tidelands distributable income, which could decrease the distributions to
unitholders. Historically, prices have been volatile and are likely to continue to be volatile in the future due to factors beyond Tidelands control. These factors include, but are not limited to:



| |  |  | political conditions worldwide, in particular political disruption, war or other armed conflicts in oil producing regions, especially in the Middle
East;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | worldwide economic conditions;
| | - |  | ------------------------------



| |  |  | weather conditions;
| | - |  | -------------------



| |  |  | the supply and price of domestic and 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.
| | - |  | -----------------------------------------------------

Moreover, government regulations, such as regulation of natural gas transportation and price controls, can affect product prices in the long term.



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Lower prices may reduce the amount of oil and natural gas that is economical to produce and
reduce distributable income available to Tidelands. The volatility of energy prices reduces the predictability of future cash distributions to unitholders. Substantially all of the oil, natural gas and natural gas liquids produced from the Royalty
Area is being sold under short-term or multi-month contracts at market clearing prices or on the spot market.

The market price for the
units may not reflect the value of the royalty interests held by Tidelands.

The public trading price for the units tends
to be tied to the recent and expected levels of cash distributions on the units. The amounts available for distribution by Tidelands vary in response to numerous factors outside the control of Tidelands, including prevailing prices for oil and
natural gas produced from properties in the Royalty Area. The market price of the units is not necessarily indicative of the value that Tidelands would realize if it sold its interest in the properties in the Royalty Area to a third party buyer and
distributed the net proceeds to its unitholders. In addition, the market price of the units is not necessarily reflective of the fact that since the assets of Tidelands are depleting assets, a portion of each cash distribution paid on the units
should be considered by investors as a return of capital, with the remainder being considered as a return on investment. There is no guarantee that distributions made to a unitholder over the life of these depleting assets will equal or exceed the
purchase price paid by the unitholder for the unit.

In addition, the public stock markets have experienced price and trading
volume volatility. This volatility has had a significant effect on the market prices of securities issued by many companies for reasons that may or may not be related to operating performance. If the public stock markets continue to experience price
and trading volume volatility in the future, the market price of the units could be adversely affected.

Our units have been thinly traded
and an active trading market for our units may not develop.

The trading volume of our units has historically been low,
partially because our units are only traded on the Pink Sheets. In addition, our public float has been further limited due to the fact that approximately 32.6% of our units were owned by Marine as of March 15, 2012. As a result, sales of small
amounts of the units in the public market could cause the price of the units to fluctuate greatly, including in a materially adverse manner. In addition, more active trading market for our units may not develop, or if developed, may not continue,
and a unitholder may find it difficult to dispose of, or to obtain accurate quotations as to the market value of, our units.

Operating
risks for the working interest owners interests in the Royalty Area can adversely affect distributions.

The
occurrence of drilling, production or transportation accidents and other natural disasters in the Royalty Area can reduce distributions. These occurrences include blowouts, cratering, explosions, environmental and hurricane damage that may result in
personal injuries, property damage, damage to productive formations or equipment and environmental damages. For example, in September 2008, Hurricanes Gustav and Ike hit the Gulf Coast, which generally caused (i) a disruption of oil and natural
gas production, (ii) damage to offshore production platforms and (iii) damage to onshore oil and natural gas pipeline facilities. Any of these occurrences could have a material adverse effect on our distributions or the market value of the
units.

Failure to collect royalty payments from working interest owners could adversely affect Tidelands distributions to its
unitholders.

A significant portion of Tidelands royalties are attributable a limited number of working interest
owners. During 2011, Black Elk Energy Offshore Operations, LLC accounted for 55% of the royalty payments to Tidelands. Tidelands does not require working interest owners to pledge collateral or otherwise post security for royalty payments. At any
time, Tidelands may encounter collection issues with one or more of the working interest owners, which could result in Tidelands not receiving payment for some or all of its royalty interests. Any reduction in royalty payments
would reduce Tidelands distributable income to unitholders.



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##### Table of Contents

The owner of any properties in the Royalty Area may transfer any of the properties in the Royalty Area to
another unrelated third party, which could reduce the amount of royalty payments that are received.

The working interest
owners may at any time transfer all or part of the properties in the Royalty Area to another unrelated third party. Unitholders are not entitled to vote on any transfer, and Tidelands will not receive any proceeds of any such transfer. Following any
transfer, the Royalty Area will continue to be subject to Tidelands royalty interest, but the net proceeds from the transferred property would be calculated separately and paid by the transferee. The transferee would be responsible for all of
the obligations relating to calculating, reporting and paying to Tidelands its royalty interest on the transferred portion of the Royalty Area, and the transferor of the transferred property in the Royalty Area would have no continuing obligation to
Tidelands for the property. Any such transferee may not be as financially sound as the current working interest owner.

The owner of any
properties in the Royalty Area may abandon any property, terminating the related royalty interest Tidelands may hold.

The
current working interest owners or any transferee may abandon any well or property if it believes that the well or property can no longer produce in commercially economic quantities or for any other reason. This would terminate Tidelands
royalty interest relating to the abandoned well or property.

The Trustee, Tidelands and the Trusts unitholders do not control the
operation or development of the properties in the Royalty Area and have little influence over operation or development.

The Trustee, Tidelands and the Trusts unitholders have little, if any, influence or control over the operation or future development
of the underlying properties in the Royalty Area. The properties in the Royalty Area are owned by independent working interest owners. The working interest owners manage the underlying properties and handle receipt and payment of funds relating to
the Royalty Area and payments to Tidelands for its royalty interests. The current working interest owners are under no obligation to continue operating the properties. The failure of a working interest owner to conduct its operations, discharge its
obligations, cooperate with regulatory agencies or comply with laws, rules and regulations in a proper manner could have an adverse effect on net proceeds payable to Tidelands. The Trustee, Tidelands and the Trusts unitholders do not have the
right to replace an operator.

Important reserve and other information with respect to the particular leases subject to Tidelands
royalty interest is difficult to obtain.

The leasehold working interests that are subject to the rights held by Tidelands
were owned in whole or in part by Chevron and have been assigned to other oil and natural gas exploration and production companies. Certain information with respect to the particular leases subject to Tidelands interests, including, but not
limited to, (i) reserves, (ii) availability of oil and natural gas, (iii) average production cost (lifting cost) per unit, (iv) undeveloped acreage and (v) net wells and net acres, lies solely within the knowledge of these
working interest owners. Engineering data, if any, regarding these leaseholds would have been compiled principally by or for the working interest owners of these leaseholds and Tidelands believes that it will not be provided access to such
information.

Terrorism and continued geopolitical hostilities could adversely affect Tidelands distributions to its unitholders or
the market price of its units.

Terrorist attacks and the threat of terrorist attacks, whether domestic or foreign, as well
as military or other actions taken in response to such attacks or threats, could cause instability in the global financial and energy markets. Terrorism and other geopolitical hostilities could adversely affect the Trusts distributions to its
unitholders or the market price of its units in unpredictable ways, including through the disruption of fuel supplies and markets, increased volatility in oil and natural gas prices, or the possibility that the infrastructure on which the operators
of the underlying properties rely could be a direct target or an indirect casualty of an act of terror.

Unitholders have limited voting
rights.

Voting rights as a unitholder are more limited than those of stockholders of most public corporations. For
example, there is no requirement for annual meetings of unitholders or for an annual or other periodic re-election of the Trustee. Unlike corporations, which are generally governed by boards of directors elected by their equity holders, the Trust is
administered by a corporate trustee in accordance with the Indenture and other organizational documents. The Trustee has extremely limited discretion in its administration of the Trust.



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The limited liability of the unitholders is uncertain.

The unitholders are not protected from the liabilities of the Trust to the same extent that a shareholder would be protected from a
corporations liabilities. The structure of the Trust as a trust does not include the interposition of a limited liability entity such as a corporation or limited partnership, which would provide further limited liability protection to
unitholders. While the Trust is liable for any excess liabilities incurred if the Trustee fails to ensure that such liabilities are to be satisfied only out of the Trusts assets, under the laws of the State of Texas, which are unsettled on
this point, a unitholder may be jointly and severally liable for any liability of the Trust if the satisfaction of such liabilities was not contractually limited to the assets of the Trust and the assets of the Trust and the Trustee are not adequate
to satisfy such liability. As a result, unitholders may be exposed to personal liability.

Tidelands royalty interest can be sold and
the Trust can be terminated.

The Trust may be terminated and the Trustee may sell Tidelands royalty interests if
holders of 80% of the units of beneficial ownership of the Trust approve the sale and vote to terminate the Trust. Following any such termination and liquidation, the net proceeds of any sale would be distributed to the unitholders and the
unitholders would receive no further distributions from the Trust. Any such sale may not be on terms acceptable to all unitholders.

The
operators of the working interest owner are subject to extensive governmental regulation.

Oil and gas operations have
been, and in the future will be, affected by Federal, state and local laws and regulations and other political developments, such as price or gathering rate controls, drilling regulations and environmental protection regulations, including the
regulation of hydraulic fracturing. Although Tidelands is unable to predict changes to existing laws and regulations, such changes could significantly impact royalty interests.

Cash held by the Trustee is not insured by the Federal Deposit Insurance Corporation.

Currently, cash held by Tidelands reserved for the payment of accrued liabilities and estimated future expenses and distributions to unitholders is typically held in cash deposits, U.S. Treasury and
agency bonds and money market accounts. Tidelands places such reserve cash with financial institutions that Tidelands considers creditworthy and limits the amount of credit exposure from any one financial institution. However, none of these accounts
are insured by the Federal Deposit Insurance Corporation. In the event that any such financial institution becomes insolvent, Tidelands may be unable to recover any or all such cash from the insolvent financial institution. Any loss of such cash may
have a material adverse effect on Tidelands cash balances and any distributions to unitholders.

Financial information of Tidelands
is not prepared in accordance with accounting principles generally accepted in the United States, or GAAP.

The financial
statements of Tidelands are prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States (GAAP). Although this basis of accounting
is permitted for royalty trusts by the U.S. Securities and Exchange Commission (the SEC), the financial statements of Tidelands differ from GAAP financial statements because royalty income is recognized in the month received rather than
in the month of production and reserves may be established for contingencies that would not be recorded under GAAP.

If it is determined
that the Trust is subject to the Texas franchise tax, the Trustee may have to withhold an amount from future distributions to pay the tax liability.

In May 2006, the State of Texas enacted legislation, as amended, to implement a new franchise or margin tax. Certain entities that were previously exempt from the franchise tax, including many
trusts, may now be subject to the tax. Trusts, however, other than business trusts (as defined in U.S. Treasury Regulation section 301.7701-4(b)), that meet certain statutory requirements are exempt from the franchise tax as passive
entities.



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The Trustee does not expect that the Trust will be required to pay any amounts under the
Texas state franchise tax for tax year 2011, based on the Trustees belief that the Trust is exempt from the franchise tax as a passive entity (i.e., the Trust is not a business trust, it receives at least 90% of its Federal gross income
from certain passive sources, and no more than 10% of its income is derived from an active trade or business). If it is subsequently determined that the Trust is not exempt from the franchise tax, the Trust will be required to deduct and withhold
from future distributions the amount required to satisfy and pay the Trusts franchise tax liability for all years open under the applicable statute of limitations. In addition, the Trust would be required to timely pay franchise tax liability
due with respect to current and future years.

Assuming the Trust is exempt from the Texas state franchise tax as a passive
entity, each unitholder that is subject to the Texas franchise tax as a taxable entity under the Texas Tax Code would generally include its share of the Trusts revenue in its franchise tax computation. The Texas franchise tax does not apply to
natural persons. Each unitholder is urged to consult its own tax advisor regarding its possible Texas state franchise tax liability.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

General. Tidelands
is not engaged in oil and natural gas operations and its only industry segment or purpose is the administration and collection of royalties. Tidelands income is based on the oil and natural gas operations of others and is derived from overriding
royalty payments made to Tidelands based on oil and natural gas sales from certain leases in the Gulf of Mexico. Tidelands does not own or directly lease any physical properties.

Reserves. As indicated above, Tidelands is not engaged in the production of oil or natural gas, and its income is derived from
overriding royalty payments that are carved out of working interests in oil and natural gas leases in the Gulf of Mexico pursuant to the 1951 Contract. Tidelands does not have the engineering data necessary to make an estimate of the proved oil and
natural gas reserves attributable thereto (nor the present value of future net cash flows from such reserves), and is not entitled to receive such data from the owners of the working interests from which Tidelands interests are derived. See
also Difficulty in Obtaining Certain Data.

Since Tidelands does not have access to this reserve
information, Tidelands is unable to compute the standardized measure of discounted future net cash flows therefrom thereto (nor the present value of future net cash flows from such reserves).

Tidelands did not file any reports on oil and natural gas reserves with any Federal authority or agency during 2011. Due to the nature of
Tidelands business, it does not have any delivery commitments.

Production. Information regarding the net
quantities of oil and natural gas produced with respect to Tidelands overriding royalty interests for each of the last three fiscal years, as well as the weighted average sales price per bbl of oil and mcf natural gas produced upon which
payments to Tidelands are based, is set forth below in the following table:



|                                                           |  |                         |         |  |      |   |         |      |  |   |         | 
|---------------------------------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                                           |  | Year Ended December 31, |        
|                                                           |  | 2011                    |         |  | 2010 |   |         | 2009 | 
|Quantity of oil and natural gas sold:                      |  |                         |         |  |      |   |         |      |  |   |         | 
|Oil (bbls)                                                 |  |                         | 8,044   |  |      |   | 8,650   |      |  |   | 6,662   | 
|Natural gas (mcf)                                          |  |                         | 102,023 |  |      |   | 268,723 |      |  |   | 513,880 | 
|Weighted average sales price for oil and natural gas sold: |  |                         |         |  |      |   |         |      |  |   |         | 
|Oil (per bbl) (1)                                          |  | $                       | 102.05  |  |      | $ | 77.67   |      |  | $ | 57.00   | 
|Natural gas (per mcf) (1)                                  |  | $                       | 5.04    |  |      | $ | 5.68    |      |  | $ | 5.36    | 



|(1) | The weighted average sales price is calculated from data provided by the operators.
|--- | -----------------------------------------------------------------------------------



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Information about average production cost (lifting cost) per unit of production has been
omitted due to its unavailability and inapplicability to Tidelands. For more information regarding oil and natural gas sales prices, see Item 7. Trustees Discussion and Analysis of Financial Condition and Results of Operations.

Interests in Properties. Tidelands properties consist of overriding royalty interests in five oil and natural
gas leases covering 22,948 gross acres located in the Gulf of Mexico in the Galveston, Sabine Pass and West Cameron areas. See also Present Activities.

Productive Properties.Information regarding gross productive oil and natural gas wells and gross leased acres in which Tidelands owns interests as of December 31, 2011 is set forth in the
table below:



|                        |  |  |        | 
|----------------------- |  |  | ------ | 
|Gross Productive Wells: |  |  |        | 
|Oil                     |  |  | 3      | 
|Natural Gas             |  |  | 7      | 
|                        |  |  |        | 
|Total Wells             |  |  | 10     | 
|                        |  |  |        | 
|Gross Leased Acres:     |  |  |        | 
|Productive              |  |  | 22,948 | 
|Non-Productive          |  |  |       | 
|                        |  |  |        | 
|Total Leased Acres      |  |  | 22,948 | 
|                        |  |  |        | 

Information regarding net wells or acres is not included since Tidelands does not own any working
interests.

Present Activities. Tidelands currently receives royalties from oil and natural gas sold from four of the
five leases in the Royalty Area, although delivery quantities are subject to the producing capability of the wells and seasonal demand.

Tidelands is not obligated to provide any fixed and determinable quantities of oil or natural gas in the future under any existing contracts or agreements.

Galveston Block 303 Field: The records of the Bureau of Ocean Energy Management, Regulation and Enforcement, a division of the
U.S. government (the BOEMRE), show that this field had two active natural gas wells during the year ended December 31, 2011. Production from these two wells ceased in November 2011. There were no drilling or work over operations on
the lease in 2011, and Tidelands has learned that on February 17, 2012, the BOEMRE approved suspension of production on this field due to lack of production. This suspension does not affect the terms of the lease.

Sabine Pass Block 13: The records of the BOEMRE show that there were four active wells in this field during the year ended
December 31, 2011. Three of the wells are oil wells and one of the wells is a natural gas well. There were no drilling or work over operations on the lease in 2011.

West Cameron Blocks 165 and 291: These two blocks are in the West Cameron Block 165 field. This field has two leases covering a total of 10,000 gross acres. The field has five active natural gas
wells and no active oil wells.

West Cameron Block 225: Well D1, a natural gas well, is currently the only active well
in this field covered by Tidelands interest. Well D1 ceased producing in January 2012 and was recompleted in a different zone in March 2012.

Difficulty in Obtaining Certain Data. Tidelands only activities are the collection and distribution of revenues from overriding royalties on certain oil and natural gas leases in the Gulf of
Mexico, pursuant to the 1951 Contract. The leasehold working interests that are subject to the rights held by Tidelands were owned in whole or in part by Chevron and have been assigned to other oil and natural gas exploration and production
companies. Certain information with respect to the particular leases subject to Tidelands interests, including, but not limited to, (i)



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##### Table of Contents

reserves, (ii) availability of oil and natural gas, (iii) average production cost (lifting cost) per unit, (iv) undeveloped acreage and (v) net wells and net acres, lies
solely within the knowledge of these working interest owners. Engineering data, if any, regarding these leaseholds would have been compiled principally by or for the working interest owners of these leaseholds and Tidelands believes that it will not
be provided access to such information. As a result, the Trustee believes that unreasonable effort and expense would be involved in seeking to obtain all of the information required under Item 102 of Regulation S-K and Subpart 1200 of
Regulation S-K.

Item 3. Legal Proceedings

Neither the Trust nor Tidelands Corporation, nor any of their respective properties, is a party to or subject to any material pending
legal proceedings as of the date hereof.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Trust is authorized to issue 1,386,525 units of beneficial interest. As of March 14, 2012, 1,386,375 units were held by 246
unitholders of record. The remaining 150 units are reserved to be issued to specific parties if and when they decide to transfer their rights under the 1951 Contract to the Trust. There were no changes in the number of outstanding units of
beneficial interest during 2011.

The units of beneficial interest in the Trust trade on the Pink Sheets and are listed under
the symbol TIRTZ. There is limited trading in the Trusts units of beneficial interest. The following table presents information obtained from public Internet sources for 2011 and 2010 as to the high and low bid prices and includes
distributions to unitholders, by quarter, for the past two years:



|                        |  |                   |       |  |                         |   |       |  |  |   |      | 
|----------------------- |  | ----------------- | ----- |  | ----------------------- | - | ----- |  |  | - | ---- | 
|                        |  | Bid Quotation (1) |       |  | Distributions(Per Unit) |  
|Year Ended December 31, |  | High              |       |  | Low                     |   |      
|2010                    |  |                   |       |  |                         |   |       |  |  |   |      | 
|First quarter           |  | $                 | 19.50 |  |                         | $ | 17.95 |  |  | $ | 0.45 | 
|Second quarter          |  |                   | 19.00 |  |                         |   | 15.25 |  |  |   | 0.44 | 
|Third quarter           |  |                   | 18.50 |  |                         |   | 16.75 |  |  |   | 0.27 | 
|Fourth quarter          |  |                   | 17.50 |  |                         |   | 15.00 |  |  |   | 0.37 | 
|                        |  |                   |      
|2011                    |  |                   |       |  |                         |   |       |  |  |   |      | 
|First quarter           |  | $                 | 16.49 |  |                         | $ | 13.05 |  |  | $ | 0.23 | 
|Second quarter          |  |                   | 13.40 |  |                         |   | 8.22  |  |  |   | 0.20 | 
|Third quarter           |  |                   | 8.80  |  |                         |   | 6.20  |  |  |   | 0.27 | 
|Fourth quarter          |  |                   | 9.50  |  |                         |   | 7.25  |  |  |   | 0.20 | 



|(1) | Such over-the-counter market quotations reflect interdealer prices without retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Trust must distribute to its unitholders all cash accumulated each quarter, less an amount
reserved for accrued liabilities and estimated future expenses. The amount reserved varies from quarter to quarter and amounted to $54,500 for the distribution paid to holders of record on December 31, 2011. Such distributions have been made
since the third quarter of 1977 and will continue to be made so long as the income from oil and natural gas royalties exceeds administrative costs. Distributions fluctuate from quarter to quarter due to changes in oil and natural gas prices and
production quantities. Distributions are determined by the cash available to the Trust on or before ten days prior to the record date provided in the Indenture.



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##### Table of Contents

Tidelands does not maintain any equity compensation plans.

Tidelands did not repurchase any units of beneficial interest during the fourth quarter of 2011.

While Tidelands complete Annual Report on Form 10-K (excluding exhibits) for the year ended December 31, 2011 is distributed
to unitholders, a copy of such Form 10-K (excluding exhibits) is available without charge to interested parties. There will be copying and mailing charges for copies of any exhibits requested. Written requests should be directed to
Mr. Ron E. Hooper, U.S. Trust, Bank of America Private Wealth Management, P.O. Box 830650, Dallas, Texas 75283-0650.



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##### Table of Contents

Item 6. Selected Financial Data

The following table summarizes selected financial information that has been derived from Tidelands audited consolidated financial
statements. You should read the information set forth below in conjunction with Item 7. Trustees Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto
included elsewhere in this Annual Report on Form 10-K.



|                                                                 |  |                                         |       |  |      |   |       |      |  |   |       |  |  |      |       |  |  |   |       | 
|---------------------------------------------------------------- |  | --------------------------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- |  |  | ---- | ----- |  |  | - | ----- | 
|                                                                 |  | Year Ended December 31,                 |      
|                                                                 |  | (In Thousands, Except Per Unit Amounts) |      
|                                                                 |  | 2011                                    |       |  | 2010 |   |       | 2009 |  |   | 2008  |  |  | 2007 |      
|Statement of Distributable Income Selected Data:                 |  |                                         |       |  |      |   |       |      |  |   |       |  |  |      |       |  |  |   |       | 
|Income  Oil and natural gas royalties                           |  | $                                       | 1,335 |  |      | $ | 2,199 |      |  | $ | 3,133 |  |  | $    | 4,575 |  |  | $ | 4,226 | 
|Expense  General and administrative expenses                    |  | $                                       | 211   |  |      | $ | 210   |      |  | $ | 289   |  |  | $    | 326   |  |  | $ | 172   | 
|Expense  Federal income taxes of subsidiary                     |  | $                                       |      |  |      | $ | 3     |      |  | $ | 13    |  |  | $    | 46    |  |  | $ | 52    | 
|Distributable income                                             |  | $                                       | 1,124 |  |      | $ | 1,986 |      |  | $ | 2,831 |  |  | $    | 4,230 |  |  | $ | 4,068 | 
|Distributable income per unit                                    |  | $                                       | 0.81  |  |      | $ | 1.43  |      |  | $ | 2.04  |  |  | $    | 3.05  |  |  | $ | 2.93  | 
|                                                                 |  |                                         |       |  |      |   |       |      |  |   |       |  |  |      |       |  |  |   |       | 
|Distributions to unitholders                                     |  | $                                       | 1,248 |  |      | $ | 2,119 |      |  | $ | 3,127 |  |  | $    | 4,115 |  |  | $ | 4,028 | 
|Distributions per unit                                           |  | $                                       | 0.90  |  |      | $ | 1.53  |      |  | $ | 2.26  |  |  | $    | 2.97  |  |  | $ | 2.91  | 
|                                                                 |  |                                         |       |  |      |   |       |      |  |   |       |  |  |      |       |  |  |   |       | 
|Statement of Assets, Liabilities and Trust Corpus Selected Data: |  |                                         |       |  |      |   |       |      |  |   |       |  |  |      |       |  |  |   |       | 
|Total assets                                                     |  | $                                       | 963   |  |      | $ | 1,312 |      |  | $ | 1,532 |  |  | $    | 2,470 |  |  | $ | 2,034 | 
|Trust corpus                                                     |  | $                                       | 683   |  |      | $ | 805   |      |  | $ | 938   |  |  | $    | 1,233 |  |  | $ | 1,118 | 



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##### Table of Contents

Item 7. Trustees Discussion and Analysis of Financial Condition and
Results of Operations

Critical Accounting Policies. The financial statements of Tidelands are prepared on the
modified cash basis method and are not intended to present financial position and results of operations in conformity with GAAP. Under the modified cash basis method:



| |  |  | Royalty income is recognized when received by Tidelands.
| | - |  | --------------------------------------------------------



| |  |  | Tidelands 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.
| | - |  | --------------------------------------------------------------------------------------

The financial statements of Tidelands differ from financial statements prepared in conformity with GAAP because of the following:



| |  |  | 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.
| | - |  | ------------------------------------------------------------------------------------

This comprehensive basis of accounting corresponds to the accounting principles permitted for royalty trusts by the SEC, as specified by
Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

The preparation of financial statements in
conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements and the reported amount of expenses
during the reporting period. Actual results may differ from such estimates.

Results of Operations.
Tidelands revenues are derived from the oil and natural gas production activities of unrelated parties. Tidelands revenues and distributions fluctuate from period to period based upon factors beyond Tidelands control, including,
without limitation, the number of leases subject to Tidelands interests, the number of productive wells drilled on leases subject to Tidelands interests, the level of production over time from such wells and the prices at which the oil
and natural gas from such wells are sold.

Tidelands results of operations are significantly impacted by oil and natural
gas commodity prices and the quantity of oil and natural gas production. Oil and natural gas prices have historically experienced significant volatility. Tidelands is not permitted to manage its commodity price risk through the use of fixed price
contracts or financial derivatives.

Tidelands income consists primarily of oil and natural gas royalties and is based
on the value at the well of Tidelands percentage interest in oil and natural gas sold without reduction for production expenses. Value at the well for oil is the purchasers posted price at its receiving point onshore, less the cost of
transportation from the offshore lease to the onshore receiving point. Value at the well for natural gas means the selling price less the cost of compression, dehydration and transportation from the lease to the delivery point of the pipeline
transporting the product to market. In general, value at the well is determined on the basis of the selling price of oil, natural gas and other minerals produced, saved and sold, or at wellhead prices determined by industry standards, where the
selling price does not reflect value at the well. In the event an agreement is not arms-length in nature, the value is based upon current market prices.

Summary.In general, Tidelands receives royalties two months after oil production and three months after natural gas production. The distribution to be paid in April 2012 will be based upon royalty
receipts received in December 2011 and January and February 2012, from natural gas production in September, October and November 2011 and oil production in October, November and December 2011. The distribution to be paid in July 2012 will be based
on production in December 2011 and January, February and March 2012.



14



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##### Table of Contents

Tidelands distributable income in 2011 was $1,124,031 or $.81 per unit as compared to
$1,986,041 or $1.43 per unit per unit in 2010 and $2,831,787 or $2.04 per unit per unit in 2009.

Oil and natural gas prices
fluctuated during 2011 and 2010, with the average oil prices realized in 2011 generally above the prices realized in 2010, and the average natural gas prices realized in 2011 generally below the prices realized in 2010. Recently, average prices for
oil have increased and average prices for natural gas have decreased from the average prices realized in late 2011. For example, in February 2012, the average price quoted for crude oil delivered onshore in Louisiana had increased 5% to $112.00 per
barrel from $107.14 per barrel in September 2011. However, in February 2012, natural gas prices realized by Tidelands were down 31% to $2.94 per mcf from $4.29 per mcf in September 2011.

Year Ended December 31, 2011 Compared to Year Ended December 31, 2010.The following table and related discussion and
analysis shows the royalty income, the net production quantities sold and the average net prices received for oil and natural gas during 2011 and 2010 and the percentage change from 2010 to 2011:



|                             |  |                             |           |  |      |   |           |          |  |  |     |   
|---------------------------- |  | --------------------------- | --------- |  | ---- | - | --------- | -------- |  |  | --- | --
|                             |  | For Year Ended December 31, |          
|                             |  | 2011                        |           |  | 2010 |   |           | % Change | 
|Income:                      |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil royalties                |  | $                           | 820,903   |  |      | $ | 671,882   |          |  |  | 22  | % 
|Natural gas royalties        |  |                             | 514,181   |  |      |   | 1,526,899 |          |  |  | (66 | )%
|                             |  |                             |           |  |      |   |           |          |  |  |     |   
|                             |  | $                           | 1,335,084 |  |      | $ | 2,198,781 |          |  |  | (39 | )%
|                             |  |                             |          
|Net production quantities:   |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil (bbls)                   |  |                             | 8,044     |  |      |   | 8,650     |          |  |  | (7  | )%
|Natural gas (mcf)            |  |                             | 102,023   |  |      |   | 268,723   |          |  |  | (62 | )%
|                             |  |                             |          
|Average net prices received: |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil (per bbl)(1)             |  | $                           | 102.05    |  |      | $ | 77.67     |          |  |  | 31  | % 
|Natural gas (per mcf)(1)     |  | $                           | 5.04      |  |      | $ | 5.68      |          |  |  | (11 | )%



|(1) | These amounts are net of the cost of transportation from offshore leases to onshore receiving points.
|--- | -----------------------------------------------------------------------------------------------------

During 2011, Tidelands received approximately 61% of its royalty income from the sale of oil and 39% from the sale of natural gas. Income
from oil and natural gas royalties in 2011 decreased 39% from 2010, primarily due to a decrease in natural gas production and natural gas prices.

Revenue from oil royalties amounted to $820,903 in 2011, an increase from the $671,882 realized in 2010. The average price realized per bbl of oil increased to $102.05 from the $77.67 realized in 2010. In
2011, oil production decreased to 8,044 bbls from the 8,650 bbls produced in 2010.

Revenue from natural gas royalties
amounted to $514,181 in 2011, a decrease from the $1,526,899 realized in 2010. In 2011, the average price per mcf of natural gas decreased to $5.04 from the $5.68 realized in 2010, while natural gas production decreased to 102,023 mcf from the
268,723 mcf produced in 2010. Royalties received from West Cameron Block 165 Field were down 67% in 2011 as compared to those royalties received in 2010.

General and administrative expenses were $211,053 in 2011, an increase from $209,540 for 2010. This increase is primarily due to an increase in professional fees and expenses.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009.The following table and related discussion and
analysis shows the royalty income, the net production quantities sold and the average net prices received for oil and natural gas during 2010 and 2009 and the percentage change from 2009 to 2010:



15



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##### Table of Contents

|                             |  |                             |           |  |      |   |           |          |  |  |     |   
|---------------------------- |  | --------------------------- | --------- |  | ---- | - | --------- | -------- |  |  | --- | --
|                             |  | For Year Ended December 31, |          
|                             |  | 2010                        |           |  | 2009 |   |           | % Change | 
|Income:                      |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil royalties                |  | $                           | 671,882   |  |      | $ | 379,750   |          |  |  | 77  | % 
|Natural gas royalties ....   |  |                             | 1,526,899 |  |      |   | 2,753,529 |          |  |  | (45 | )%
|                             |  |                             |           |  |      |   |           |          |  |  |     |   
|                             |  | $                           | 2,198,781 |  |      | $ | 3,133,279 |          |  |  | (30 | )%
|                             |  |                             |          
|Net production quantities:   |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil (bbls)                   |  |                             | 8,650     |  |      |   | 6,662     |          |  |  | 30  | % 
|Natural gas (mcf)            |  |                             | 268,723   |  |      |   | 513,880   |          |  |  | (48 | )%
|                             |  |                             |          
|Average net prices received: |  |                             |           |  |      |   |           |          |  |  |     |   
|Oil (per bbl)(1)             |  | $                           | 77.67     |  |      | $ | 57.00     |          |  |  | 36  | % 
|Natural gas (per mcf)(1)     |  | $                           | 5.68      |  |      | $ | 5.36      |          |  |  | 6   | % 



|(1) | These amounts are net of the cost of transportation from offshore leases to onshore receiving points.
|--- | -----------------------------------------------------------------------------------------------------

During 2010, Tidelands received approximately 31% of its royalty income from the sale of oil and 69% from the sale of natural gas. Income
from oil and natural gas royalties in 2010 decreased 30% from 2009, primarily due to a decrease in natural gas production.

Revenue from oil royalties amounted to $671,882 in 2010, an increase from the $379,750 realized in 2009. The average price realized per
bbl of oil increased to $77.67 from the $57.00 realized in 2009. In 2010, oil production increased to 8,650 bbls from 6,662 bbls produced in 2009.

Revenue from natural gas royalties amounted to $1,526,899 in 2010, a decrease from the $2,753,529 realized in 2009. In 2010, the average price per mcf of natural gas increased to $5.68 from the $5.36
realized in 2009, while natural gas production decreased to 268,723 mcf from the 513,880 mcf produced in 2009. Royalties received from West Cameron Block 165 Field were down in 2010 primarily due to a decrease in production as compared to 2009.

General and administrative expenses were $209,540 in 2010, a decrease from $289,261 for 2009. This decrease was primarily due
to a decrease in professional services related to the organizational structure of the Trust.

Capital Resources and
Liquidity. The Trusts Indenture (and the charter and by-laws of Tidelands Corporation) expressly prohibits the operation of any kind of trade or business. Due to the limited purpose of the Trust as stated in the Trusts Indenture,
there is no requirement for capital. The Trusts only obligation is to distribute to unitholders the distributable income actually collected.

As an administrator of oil and natural gas royalty properties, Tidelands collects income monthly, pays expenses of administration and disburses all distributable income collected to its unitholders each
quarter. Because all of Tidelands revenues are invested in liquid funds pending distribution, Tidelands does not experience liquidity problems.

The Trusts oil and natural gas properties are depleting assets and are not being replaced due to the prohibition against these investments. These restrictions, along with other factors, allow the
Trust to be treated as a grantor trust. All income and deductions, for tax purposes, should flow through to each individual unitholder. The Trust is not a taxable entity. Tidelands Corporation will owe state and Federal income taxes with respect to
its income after deducting statutory depletion. Tidelands Corporations income specifically excludes 95% of oil and natural gas royalties collected by Tidelands Corporation, which are retained by and delivered to the Trust in respect of the
Trusts net profits interest.

The Trust does not currently have any long term contractual obligations, other than the
obligation to make distributions to unitholders pursuant to the Indenture. In addition, the Trust does not maintain any off-balance sheet arrangements within the meaning of Item 303 of Regulation S-K promulgated by the SEC.

Forward-Looking Statements. Certain statements discussed in this Annual Report on Form 10-K regarding Tidelands future
financial performance and results of operations, and other statements that are not historical facts, are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and
Exchange Act of 1934, as amended (the Exchange Act). Tidelands uses the words



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may, expect, anticipate, estimate, believe, continue, intend, plan, budget, or other
similar words to identify forward-looking statements. All forward-looking statements speak only as of the date on which they are made. You should read statements that contain these words carefully because they discuss future expectations, contain
projections of Tidelands financial condition, and/or state other forward-looking information. Actual results may differ from expected results because of factors, risks and uncertainties including, but not limited to, the following:
reductions in price or demand for oil and natural gas, which might then lead to decreased production; reductions in production due to the depletion of existing wells or disruptions in service, which may be caused by storm damage to production
facilities, blowouts or other production accidents, or geological changes such as cratering of productive formations; changes in regulations; and the expiration or release of leases subject to Tidelands interests. Events may occur in the
future that Tidelands is unable to accurately predict, or over which it has no control. If one or more of these uncertainties as well as other risks of which we are not aware or of which we currently do not believe are material materialize, or if
underlying assumptions prove incorrect, actual outcomes may vary materially from those contained in the forward-looking statements included in this Annual Report on Form 10-K.

Website

Tidelands has an Internet website and has made available its
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to such reports, filed or furnished pursuant to Section 13(a) or 15(d) of Exchange Act at www.tirtz-tidelandsroyaltytrust.com. Each
of these reports will be posted on this website as soon as reasonably practicable after such report is electronically filed with or furnished to the SEC.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As described elsewhere herein, Tidelands only function is to collect overriding royalties from leases operated by others and distribute those royalties to its unitholders after paying the cost of
collection and administration. Tidelands income is highly dependent on the prices realized from the sale of oil and natural gas and the quantities of production from the wells in which it has a royalty interest. Oil and natural gas prices have
historically experienced significant volatility. Tidelands is not permitted to manage its commodity price risk through the use of fixed price contracts or financial derivatives.

Due to the short span of time between receipts and disbursements, cash held by Tidelands is held in a non-interest bearing trust account,
therefore there is no material interest rate risk.

Oil and natural gas royalties received by Tidelands Corporation prior to
delivery of the 95% net profits interest to the Trust are held in money market accounts that invest in U.S. Treasury securities and are considered not subject to interest rate risk. The corpus of Tidelands Corporation is held in either money market
accounts or U.S. Treasury or agency securities to be held to maturity. Funds held in money market accounts and U.S. Treasury securities that mature in less than one year are not considered subject to interest rate risk.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements listed in the following index, together with the related notes and the reports of Weaver and
Tidwell, L.L.P. and KPMG LLP (our former auditor), independent registered public accounting firms, are presented on the following pages and are incorporated by reference herein.



|                                                                                                    |  |      |    | 
|--------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                    |  | Page |   
| Reports of Independent Registered Public Accounting Firms                                         |  |      | 22 | 
| Consolidated Statements of Assets, Liabilities and Trust Corpus as of December 
31, 2011 and 2010 |  |      | 24 | 
| Consolidated Statements of Distributable Income for the Three Years Ended December 31,
2011       |  |      | 25 | 
| Consolidated Statements of Changes in Trust Corpus for the Three Years Ended December 
31, 2011   |  |      | 26 | 
| Notes to Consolidated Financial Statements                                                        |  |      | 27 | 



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See also Item 15. Exhibits and Financial Statement Schedules of this Annual
Report on Form 10-K for further information concerning the financial statements of Tidelands. All schedules have been omitted because they are not required or because the required information is shown in the consolidated financial statements or
notes thereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On April 15, 2011, the Trustee recommended and approved the appointment of Weaver and Tidwell, L.L.P. as the
Trusts independent auditor. The Trust has had no occasions in the past two years upon which it has consulted with Weaver and Tidwell, L.L.P, except for providing consulting to the Trust related to its internal control assessment. Weaver and
Tidwell, L.L.P. was disengaged from providing any further consulting work prior to its engagement as the independent registered public accounting firm for the Trust effective April 15, 2011.

KPMG LLP was the Trusts previous independent registered public accounting firm, performing audits of the Trusts consolidated
financial statements for the years ended December 31, 2008, 2009 and 2010. The reports of KPMG LLP did not contain an adverse opinion or disclaimer of opinion, but were modified to include an explanatory paragraph related to modified cash basis
of accounting utilized by the Trust.

During the years ended December 31, 2008, 2009 and 2010, (i) there have been
no disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement(s), if not resolved to KPMG LLPs satisfaction, would have caused KPMG LLP to
make reference to the subject matter of the disagreement(s) in connection with its reports for such years, and (ii) there were no reportable events as such term is defined in Item 304(a)(1)(v) of Regulation S-K.

The Trust provided KPMG LLP with a copy of this Annual Report on Form 10-K prior to its filing with the SEC and KPMG LLP consented to the
use of its audit report for the year ended December 31, 2010.

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Trustee carried out an evaluation of the effectiveness of the design and operation
of Tidelands disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based upon that evaluation, the Trustee concluded that Tidelands disclosure controls and procedures were effective as of the end of
the period covered by this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There has not been any change in Tidelands internal control over financial reporting during the fourth quarter of 2011 that has
materially affected, or is reasonably likely to materially affect, Tidelands internal control over financial reporting.

Trustees Report on Internal Control Over Financial Reporting

The Trustee is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or Rule 15d-15(f) promulgated under the
Exchange Act. The Trustee conducted an evaluation of the effectiveness of the Trusts internal control over financial reporting based on the criteria established in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Based on the Trustees evaluation under the framework in Internal Control-Integrated Framework, the Trustee concluded that Tidelands internal control over financial
reporting was effective as of December 31, 2011. This Annual Report on Form 10-K does not include an attestation report of Tidelands registered public accounting firm regarding internal control over financial reporting. The Trustees
report was not subject to attestation by Tidelands registered public accounting firm pursuant to an exemption for smaller reporting companies pursuant to Section 404(c) of the Sarbanes-Oxley Act of 2002.



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##### Table of Contents

Item 9B. Other Information

None.

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Officers.The Trust is a trust created under the laws of the State of Texas. The Trusts Indenture does not
provide for directors or officers or the election of directors or officers. Under the Indenture, U.S. Trust, Bank of America Private Wealth Management serves as the Trustee.

Section 16(a) Beneficial Ownership Reporting Compliance. The Trust has no directors or officers and Marine is the only unitholder that is a beneficial owner of more than 10% of the outstanding
units. The Trust is not aware of any person that failed to report on a timely basis reports required by Section 16(a) of the Exchange Act during 2011.

Code of Ethics.Because the Trust has no employees, it does not have a code of ethics. Employees of the Trustee must comply with the code of ethics of U.S. Trust, Bank of America Private Wealth
Management, a copy of which will be made available to unitholders without charge, upon request at Bank of America Plaza,
17thFloor, 901 Main Street, Dallas, Texas, 75202.

Committees.The Trust has no directors and therefore has no audit committee or audit committee financial expert and no
nominating committee or compensation committee.

Item 11. Executive Compensation

The Trust has no directors or officers and is administered by the Trustee. Accordingly, the Trust does not have a compensation committee
or maintain any equity compensation plans, and there are no units reserved for issuance under any such plans. During the past three years, the Trust paid or accrued fees to the Trustee, as set forth below.



|                                                                   |  |      |      |  |                              |   |        | 
|------------------------------------------------------------------ |  | ---- | ---- |  | ---------------------------- | - | ------ | 
|Name of Individual or Entity                                       |  | Year |      |  | Other AnnualCompensation (1) |  
|U.S. Trust, Bank of America Private Wealth Management, the Trustee |  |      | 2011 |  |                              | $ | 21,125 | 
|                                                                   |  |      | 2010 |  |                              | $ | 20,580 | 
|                                                                   |  |      | 2009 |  |                              | $ | 20,666 | 



|(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 Stockholder Matters

The following table sets forth the persons known to the Trust who own beneficially more than 5% of its outstanding units of beneficial
interest:



|                             |  |                                                                 |  |                                                 |         |  |                 |  |      |  
|---------------------------- |  | --------------------------------------------------------------- |  | ----------------------------------------------- | ------- |  | --------------- |  | ---- | -
|Title of Class               |  | Name and Address of BeneficialOwner                             |  | Amount BeneficiallyOwned as
ofDecember 31, 2011 |         |  | Percentof Class | 
|Units of Beneficial Interest |  | Marine Petroleum Trust P.O.
Box 830650 Dallas, Texas 75283-0650 |  |                                                 | 452,366 |  |                 |  | 32.6 | %



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There are no executive officers or directors of the Trust. The Trustee does not beneficially
own any units of beneficial interest. The Trust does not maintain any equity compensation plans and the Trust has not repurchased any units during the fourth quarter of 2011. The Trustee knows of no arrangements the operation of which may at a
subsequent date result in a change of control of the Trust.

Item 13. Certain Relationships and Related
Transactions, and Director Independence

Pursuant to an arrangement with Marine Petroleum Corporation to share certain
administrative expenses related to the use of office space, Tidelands Corporation paid the following amounts to Marine Petroleum Corporation during the past three years. The arrangement provides that administrative expenses are shared in the ratio
of each of Marine Petroleum Corporations and Tidelands Corporations gross income to the total gross income of both entities.



|                             |  |      |      |  |             |   |        | 
|---------------------------- |  | ---- | ---- |  | ----------- | - | ------ | 
|Name of Individual or Entity |  | Year |      |  | Amount Paid |  
|Marine Petroleum Corporation |  |      | 2011 |  |             | $ | 49,000 | 
|                             |  |      | 2010 |  |             | $ | 54,450 | 
|                             |  |      | 2009 |  |             | $ | 48,900 | 

Item 14. Principal Accountant Fees and Services

Audit fees for services performed by KPMG LLP, Tidelands former independent registered public accounting firm, for the fiscal year
ended December 31, 2010 were $85,000, which includes $30,000 of audit fees associated with services provided in 2010 that were paid in 2011; there were no audit-related fees, tax fees or other fees for the fiscal year ended December 31, 2010. Audit
fees for services performed by KPMG LLP for review of consolidated financial statements included in Tidelands Form 10-Q for the quarter ended March 31, 2011 were $9,600; there were no audit-related fees, tax fees or other fees for these
periods.

On April 15, 2011, Tidelands engaged Weaver and Tidwell, L.L.P. to serve as its independent registered public
accounting firm. Audit fees for services performed by Weaver and Tidwell, L.L.P. for review of the financial statements included in Tidelands Forms 10-Q for the quarters ended June 30, 2011 and September 30, 2011 were $14,000; there were
no audit-related fees, tax fees or other fees for these periods. The audit fees for services performed by Weaver and Tidwell, L.L.P. for the fiscal year ended December 31, 2011 were $21,000; there were no audit-related fees, tax fees or other
fees for the fiscal year ended December 31,2011.

As referenced in Item 10. Directors, Executive Officers and
Corporate Governance, the Trust has no audit committee, and as a result, has no audit committee pre-approval policy with respect to fees paid to Weaver and Tidwell, L.L.P. or KPMG LLP.



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Part IV

Item 15. Exhibits and Financial Statement Schedules



|(a) | Financial Statements  See Financial Statements and Supplementary Data above.
|--- | -------------------------------------------------------------------------------



|(b) | Exhibits
|--- | --------



| | 4.1 | Indenture of Trust dated June 1, 1954, as amended, filed as Exhibit 4.1 to the Trusts Quarterly Report on Form 10-Q for the period ended September 30,
2001 (File No. 000-08677), filed with the Securities and Exchange Commission on November 14, 2001, and incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 21.1 | Subsidiaries of the Trust, filed as Exhibit 21.1 to the Trusts Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (File No. 000-08677),
filed with the Securities and Exchange Commission on April 2, 2007, and incorporated herein by reference.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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.
| | ----- | -------------------------------------------------------------------------------------------------



|*Filed | herewith.
|------ | ---------

(c) Financial Statement Schedules
 All required schedules are included in the financial statements included in this Annual Report on Form 10-K.



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Trustee and Holders of Trust Units of Tidelands Royalty Trust B and Subsidiary:

We have audited the accompanying consolidated statement of assets, liabilities, and trust corpus of Tidelands Royalty Trust B and Subsidiary
(the Trust) as of December 31, 2011 and the related consolidated statements of distributable income and changes in trust corpus for the year then ended. These consolidated financial statements are the responsibility of the Trustee. Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance
with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As described in Note 2 to the
consolidated financial statements, these consolidated financial statements were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States
of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the assets,
liabilities, and trust corpus of Tidelands Royalty Trust B and Subsidiary as of December 31, 2011, and its distributable income and changes in trust corpus for the year ended December 31, 2011 in conformity with the modified
cash basis of accounting described in Note 2 to the consolidated financial statements.

WEAVER AND TIDWELL, L.L.P.

Dallas, Texas

March 16, 2012



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Trustee and Holders of Trust Units

Tidelands
Royalty Trust B:

We have audited the accompanying consolidated statement of assets, liabilities, and trust corpus of Tidelands
Royalty Trust B (the Trust) as of December 31, 2010, and the related consolidated statements of distributable income and changes in trust corpus for each of the years in the two-year period ended December 31, 2010. These consolidated
financial statements are the responsibility of the Trustee. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

As described in note 2 to the consolidated financial statements, these consolidated financial
statements were prepared on the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the assets, liabilities, and trust
corpus of Tidelands Royalty Trust B as of December 31, 2010 and its distributable income and changes in trust corpus for each of the years in the two-year period ended December 31, 2010 in conformity with the modified cash basis of
accounting described in note 2.

/s/ KPMG LLP

Dallas, Texas

March 28, 2011



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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

As of December 31, 2011 and 2010

(Audited)



|                                                                                                    |  |                  |         |  |                  |   |           | 
|--------------------------------------------------------------------------------------------------- |  | ---------------- | ------- |  | ---------------- | - | --------- | 
|                                                                                                    |  | December 31,2011 |         |  | December 31,2010 |  
|Assets                                                                                              | 
|Current assets:                                                                                     |  |                  |         |  |                  |   |           | 
|Cash and cash equivalents                                                                           |  | $                | 950,422 |  |                  | $ | 1,299,734 | 
|Oil, gas and other mineral properties                                                               |  |                  | 2       |  |                  |   | 2         | 
|Federal income tax refundable                                                                       |  |                  | 12,734  |  |                  |   | 12,734    | 
|                                                                                                    |  |                  |         |  |                  |   |           | 
|Total assets                                                                                        |  | $                | 963,158 |  |                  | $ | 1,312,470 | 
|                                                                                                    |  |                  |         |  |                  |   |           | 
|Liabilities and Trust Corpus                                                                        | 
|                                                                                                    |  |                 
|Current liabilities:                                                                                |  |                  |         |  |                  |   |           | 
|Accounts payable                                                                                    |  | $                |        |  |                  | $ |          | 
|Federal income taxes payable                                                                        |  |                  |        |  |                  |   |          | 
|Income distributable to unitholders                                                                 |  |                  | 280,198 |  |                  |   | 507,437   | 
|                                                                                                    |  |                  |         |  |                  |   |           | 
|Total current liabilities                                                                           |  | $                | 280,198 |  |                  | $ | 507,437   | 
|                                                                                                    |  |                  |         |  |                  |   |           | 
|Trust corpus  authorized 1,386,525 units of beneficial interest, issued 1,386,375 at nominal value |  |                  | 682,960 |  |                  |   | 805,033   | 
|                                                                                                    |  |                  |         |  |                  |   |           | 
|                                                                                                    |  | $                | 963,158 |  |                  | $ | 1,312,470 | 
|                                                                                                    |  |                  |         |  |                  |   |           | 

See accompanying notes to consolidated financial statements.



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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF DISTRIBUTABLE INCOME

For the Three Years Ended December 31, 2011

(Audited)



|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|------------------------------------------------ |  | ---- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|                                                 |  | 2011 |           |  | 2010 |   |           | 2009 | 
|Income:                                          |  |      |           |  |      |   |           |      |  |   |           | 
|Oil and natural gas royalties                    |  | $    | 1,335,084 |  |      | $ | 2,198,781 |      |  | $ | 3,133,279 | 
|Interest income                                  |  |      |          |  |      |   |          |      |  |   | 769       | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Total income                                     |  | $    | 1,335,084 |  |      | $ | 2,198,781 |      |  | $ | 3,134,048 | 
|                                                 |  |      |          
|Expenses:                                        |  |      |           |  |      |   |           |      |  |   |           | 
|General and administrative expenses              |  | $    | 211,053   |  |      | $ | 209,540   |      |  | $ | 289,261   | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Distributable income before Federal income taxes |  |      | 1,124,031 |  |      |   | 1,989,241 |      |  |   | 2,844,787 | 
|Federal income taxes of subsidiary               |  |      |          |  |      |   | 3,200     |      |  |   | 13,000    | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Distributable income                             |  | $    | 1,124,031 |  |      | $ | 1,986,041 |      |  | $ | 2,831,787 | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Distributable income per unit                    |  | $    | 0.81      |  |      | $ | 1.43      |      |  | $ | 2.04      | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Distributions per unit                           |  | $    | 0.90      |  |      | $ | 1.53      |      |  | $ | 2.26      | 
|                                                 |  |      |           |  |      |   |           |      |  |   |           | 
|Units outstanding                                |  |      | 1,386,375 |  |      |   | 1,386,375 |      |  |   | 1,386,375 | 

See accompanying notes to consolidated financial statements.



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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN TRUST CORPUS

For the Three Years Ended December 31, 2011

(Audited)



|                                  |  |      |            |   |      |   |            |      |  |   |            |  
|--------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                  |  | 2011 |            |   | 2010 |   |            | 2009 | 
|Trust corpus, beginning of period |  | $    | 805,033    |   |      | $ | 937,904    |      |  | $ | 1,233,375  |  
|Distributable income              |  |      | 1,124,031  |   |      |   | 1,986,041  |      |  |   | 2,831,787  |  
|Distributions to unitholders      |  |      | (1,246,104 | ) |      |   | (2,118,912 | )    |  |   | (3,127,258 | )
|                                  |  |      |            |   |      |   |            |      |  |   |            |  
|Trust corpus, end of period       |  | $    | 682,960    |   |      | $ | 805,033    |      |  | $ | 937,904    |  
|                                  |  |      |            |   |      |   |            |      |  |   |            |  

See accompanying notes to consolidated financial statements.



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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2011

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL

(a) General

Tidelands Royalty Trust B (the Trust) was established on June 1, 1954 with a transfer of contract rights to certain properties to the Trust in exchange for units of beneficial
interest. The contract rights enable the Trust to receive an interest in any oil, natural gas or other mineral leases obtained by Gulf Oil Corporation, now Chevron U.S.A., Inc. (Chevron), which is a subsidiary of Chevron Corporation and
its assignees in a designated area of the Gulf of Mexico during a 50-year period that expired on April 30, 2001.

The
Trust is required under its Indenture to distribute all income, after paying its liabilities and obligations, to the unitholders quarterly. The Trust cannot invest any of its money for any purpose and cannot engage in a trade or business.

The Trusts wholly-owned subsidiary, Tidelands Royalty B Corporation (Tidelands Corporation),
holds title to interests in properties that are situated offshore of Louisiana. Ninety-five percent of all oil, natural gas, and other mineral royalties collected by this subsidiary are retained by and delivered to the Trust. Tidelands Corporation,
like the Trust, is prohibited from engaging in a trade or business and does only those things necessary for the administration and liquidation of its properties. The Trust is authorized to pay the expenses of Tidelands Corporation should it be
necessary.

The Trust and its subsidiary have no employees. Tidelands Corporation has entered into an arrangement with Marine
Petroleum Corporation (a wholly-owned subsidiary of Marine Petroleum Trust, an affiliate of the Trust) to share certain administrative expenses and to assist the trustee in the administration of the Trust. For the years ended 2011, 2010 and 2009,
Tidelands Corporation paid $49,000, $54,450 and $48,900 to Marine Petroleum Corporation, respectively. At December 31, 2011 and 2010, Marine Petroleum Trust owned 32.6% of the Trusts outstanding units of beneficial interest.

(b) Unitholder Voting Matters

On March 27, 2001, the unitholders of record at the close of business on February 16, 2001, approved an amendment to the Indenture to extend the life of the Trust to April 30, 2021.

(c) Principles of Consolidation

The consolidated financial statements include the Trust and its wholly-owned subsidiary, Tidelands Corporation. All material intercompany accounts and transactions have been eliminated upon consolidation.

(d) Producing Oil and Natural Gas Properties

At the time the Trust was established, no determinable market value was available for the assets transferred to the Trust; consequently, nominal values were assigned. Accordingly, no allowance for
depletion has been computed.

Tidelands revenues are derived from production payments and overriding royalty interests
related to properties located in the Gulf of Mexico.

(e) Federal Income Taxes

No provision has been made for Federal income taxes on the Trusts income because such taxes are the liability of the
unitholders.



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Federal income taxes are provided on the income of Tidelands Corporation (which specifically
excludes the 95% net profits interest to be retained by and delivered to the Trust) after deducting statutory depletion. There were no significant deferred tax assets or liabilities as of December 31, 2011 and 2010. Tidelands Corporation
uses the cash method of reporting for Federal income taxes. The primary difference between the actual tax expense of Tidelands Corporation and the expected tax expense is due to the fact that only 5% of Tidelands Corporations income (i.e.,
excluding the 95% net profits interest retained by and delivered to the Trust) is subject to Federal income tax.

Tax
positions taken by the Trust related to the Trusts pass-through status and Federal state tax positions have been reviewed, and the Trustee is of the opinion that material positions taken would more likely than not be sustained by examination.
In accordance with the Trusts basis of accounting discussed in Note 1, the Trust would only recognize the impact of tax positions that were not upheld at the time of payment. As of December 31, 2011, the Trusts tax years 2007 to
2010 remain subject to examination.

The Federal income taxes refundable which arose during the prior year are as a result of
payments previously made in excess of the estimated taxes payable.

Tidelands Corporation recognizes interest and penalties
related to unrecognized tax benefits in income tax expense.

(f) Credit Risk Concentration and Cash Equivalents

Financial instruments which potentially subject the Trust and Tidelands Corporation to concentrations of credit risk are primarily
investments in cash equivalents. The Trust and Tidelands Corporation place their cash investments with financial institutions that the Trustee considers creditworthy and limit the amount of credit exposure from any one financial institution. The
estimated fair values of cash equivalents approximate the carrying values due to the short term nature of these financial instruments.

Tidelands had cash equivalents of $950,422 and $1,299,734 at December 31, 2011 and 2010, respectively, which consisted of cash deposits, U.S. Treasury and agency bonds, and money market mutual funds.

(g) Use of Estimates

The preparation of financial statements in conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of
liabilities at the date of the consolidated financial statements and the reported amount of expenses during the reporting period. Actual results may differ from such estimates.

(h) Distributable Income per Unit

Distributable income per unit is determined by dividing distributable income by the number of units of beneficial interest outstanding during the period.

(i) Significant Royalty Sources

The following table presents the approximate percentage of royalties actually received from each royalty payor for the past three years:



|                                                 |  |      |     |   |      |  |     |      |  |  |     |  
|------------------------------------------------ |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|Royalty Payors                                   |  | 2011 |     |   | 2010 |  |     | 2009 | 
|Black Elk Energy Offshore Operations, LLC (1)    |  |      | 55  | % |      |  |    |      |  |  |    |  
|Apache Corporation (2)                           |  |      | 29  | % |      |  | 10  | %    |  |  |    |  
|W&T Offshore Inc. (3)                            |  |      | 9   | % |      |  | 7   | %    |  |  | 7   | %
|JX Nippon Oil & Gas Exploration Corp. (NOEX) (1) |  |      | 6   | % |      |  | 34  | %    |  |  | 15  | %
|Breton Engineering LLC (4)                       |  |      | 1   | % |      |  | 3   | %    |  |  |    |  
|Devon Energy Production Company LP (2)           |  |      |    |   |      |  | 44  | %    |  |  | 78  | %
|Barron Petroleum Company (3)                     |  |      |    |   |      |  | 2   | %    |  |  |    |  
|                                                 |  |      |     |   |      |  |     |      |  |  |     |  
|                                                 |  |      | 100 | % |      |  | 100 | %    |  |  | 100 | %
|                                                 |  |      |     |   |      |  |     |      |  |  |     |  



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(2) BASIS OF ACCOUNTING

The financial statements of Tidelands have been prepared on the modified cash basis method and are not intended to
present financial position and results of operations in conformity with accounting principles generally accepted in the United States (GAAP). Under the modified cash basis method:



| |  |  | Royalty income is recognized when received by Tidelands.
| | - |  | --------------------------------------------------------



| |  |  | Tidelands 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.
| | - |  | --------------------------------------------------------------------------------------

The financial statements of Tidelands differ from financial statements prepared in conformity with GAAP because of the following:



| |  |  | 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.
| | - |  | ------------------------------------------------------------------------------------

This comprehensive basis of accounting corresponds to the accounting principles permitted for royalty trusts by the SEC, as specified by
Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

The preparation of financial statements in
conformity with the modified cash basis method of accounting requires the Trustee to make various estimates and assumptions that affect the reported amount of liabilities at the date of the financial statements and the reported amount of expenses
during the reporting period. Actual results may differ from such estimates.

(3) TEXAS FRANCHISE TAX

Texas does not impose an income tax. Therefore, no part of the income produced by the Trust is subject to state income
tax in Texas. However, in May 2006, the State of Texas enacted legislation, as amended, to implement a new franchise tax. Under the new legislation, a 1% tax (in certain cases not applicable here, the tax rate is 0.5%) will be imposed on each
taxable entitys taxable margin. Taxable margin is generally defined as revenues less certain costs, as provided in the statute. Most entities that provide owners with limited liability protection, including trusts, are considered to be taxable
entities for purposes of the Texas franchise tax. The statute provides certain limited exemptions from the tax, including exclusions for certain passive entities that satisfy specified statutory requirements as described below.

Under the Texas franchise tax statute, passive entities, including trusts, that meet the following requirements,
will be exempt from the Texas state franchise tax: (a) the trust cannot be a business trust within the meaning of U.S. Treasury Regulation section 301.7701-4(b); (b) at least 90% of the trusts income for the taxable year must be
derived from passive sources (e.g., royalties, bonuses, delay rental income from mineral properties, dividends, interest, gains from the sale of securities); and (c) no more than 10% of the trusts income for the taxable year can be
derived from an active trade or business (e.g., rent, certain income received by a non-operator under a joint operating agreement pursuant to which the operator is the member of an affiliated group that includes such non-operator). An entity
will determine on an annual basis whether it meets the requirements to be treated as a passive entity for Texas state franchise tax purposes. The Trustee believes that all or substantially all of the income of the Trust currently is
passive, as it consists of royalty income from the sale of oil and natural gas, dividends and interest income. Subject to any change in the sources of income derived by the Trust or any change in the Indenture, the Trust expects that it will be a
passive entity that is not subject to the franchise tax.



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If the Trust is exempt from the Texas state franchise tax as a passive entity, each
unitholder that is subject to the Texas franchise tax as a taxable entity under the Texas Tax Code would generally include its share of the Trusts revenue in its franchise tax computation. The Texas franchise tax does not apply to natural
persons. The Trust believes that it was a passive entity in 2011.

Each unitholder is urged to consult its own tax advisor
regarding the requirements for filing state tax returns.

(4) SUPPLEMENTAL INFORMATION RELATING TO OIL AND NATURAL GAS RESERVES (UNAUDITED)

Oil and natural gas reserve information relating to the Trusts royalty interests is not presented because such
information is not available to the Trust. The Trusts share of oil and natural gas produced for its royalty interests was as follows:



|                           |  |                             |         |  |      |  |         |      |  |  |         | 
|-------------------------- |  | --------------------------- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                           |  | For Year Ended December 31, |        
|                           |  | 2011                        |         |  | 2010 |  |         | 2009 | 
|Net production quantities: |  |                             |         |  |      |  |         |      |  |  |         | 
|Oil (bbls)                 |  |                             | 8,044   |  |      |  | 8,650   |      |  |  | 6,662   | 
|Natural gas (mcf)          |  |                             | 102,023 |  |      |  | 268,723 |      |  |  | 513,880 | 

(5) SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)

The following quarterly financial information for the years ended December 31, 2011 and 2010 is unaudited;
however, in the opinion of the Trustee, all adjustments necessary to present a fair statement of the results of operations for the interim periods have been included.



|                   |  |                             |           |  |                     |   |           |                             |  |   |      | 
|------------------ |  | --------------------------- | --------- |  | ------------------- | - | --------- | --------------------------- |  | - | ---- | 
|                   |  | Oil andNatural GasRoyalties |           |  | DistributableIncome |   |           | DistributableIncome PerUnit | 
|Quarter ended:     |  |                             |           |  |                     |   |           |                             |  |   |      | 
|March 31, 2010     |  | $                           | 682,597   |  |                     | $ | 636,495   |                             |  | $ | 0.46 | 
|June 30, 2010      |  |                             | 525,991   |  |                     |   | 456,320   |                             |  |   | 0.33 | 
|September 30, 2010 |  |                             | 413,669   |  |                     |   | 348,652   |                             |  |   | 0.25 | 
|December 31, 2010  |  |                             | 576,524   |  |                     |   | 544,574   |                             |  |   | 0.39 | 
|                   |  |                             |           |  |                     |   |           |                             |  |   |      | 
|                   |  | $                           | 2,198,781 |  |                     | $ | 1,986,041 |                             |  | $ | 1.43 | 
|                   |  |                             |           |  |                     |   |           |                             |  |   |      | 
|Quarter ended:     |  |                             |           |  |                     |   |           |                             |  |   |      | 
|March 31, 2011     |  | $                           | 416,313   |  |                     | $ | 350,648   |                             |  | $ | 0.25 | 
|June 30, 2011      |  |                             | 272,041   |  |                     |   | 198,003   |                             |  |   | 0.14 | 
|September 30, 2011 |  |                             | 360,559   |  |                     |   | 323,284   |                             |  |   | 0.23 | 
|December 31, 2011  |  |                             | 286,171   |  |                     |   | 252,096   |                             |  |   | 0.19 | 
|                   |  |                             |           |  |                     |   |           |                             |  |   |      | 
|                   |  | $                           | 1,335,084 |  |                     | $ | 1,124,031 |                             |  | $ | 0.81 | 
|                   |  |                             |           |  |                     |   |           |                             |  |   |      | 



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed by the undersigned thereunto
duly authorized.



|                     |  |  |  |                                                                                                                                                                                 |  |     |  |                      
|-------------------- |  |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- |  | ---------------------
|                     |  |  |  | Tidelands Royalty Trust B                                                                                                                                                    
|Date: March 16, 2012 |  |  |  | (Registrant)                                                                                                                                                                   
|                     |  | 
|                     |  |  |  | By: U.S. Trust, Bank of America Private Wealth Management (in its capacity as Corporate Trustee of Tidelands Royalty Trust B and not in its individual
capacity or otherwise)
|                     |  |  |  |                                                                                                                                                                                
|                     |  |  |  |                                                                                                                                                                                 |  | By: |  | /s/ Ron E. Hooper    
|                     |  |  |  |                                                                                                                                                                                 |  |     |  | Ron E. Hooper        
|                     |  |  |  |                                                                                                                                                                                 |  |     |  | Senior Vice President

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has
been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



|                                                      |  |                   |  |               
|----------------------------------------------------- |  | ----------------- |  | --------------
|NAME                                                  |  | CAPACITIES        |  | DATE          
|U.S. Trust, Bank of America Private Wealth Management |  | Corporate Trustee |  | March 16, 2012



|    |  |                      
|--- |  | ---------------------
|By: |  | /s/ Ron E. Hooper    
|    |  | Ron E. Hooper        
|    |  | Senior Vice President

(The Registrant has no directors or executive officers).



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EXHIBIT INDEX



|              |  |                                                                                                                                                                                                                                                                                                 
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                     
|              | 
|4.1           |  | Indenture of Trust dated June 1, 1954, as amended, filed as Exhibit 4.1 to the Trusts Quarterly Report on Form 10-Q for the period ended September 30, 2001 (File No.
000-08677), filed with the Securities and Exchange Commission on November 14, 2001, and incorporated herein by reference.
|              | 
|21.1          |  | Subsidiaries of the Trust, filed as Exhibit 21.1 to the Trusts Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (File No. 000-08677), filed with the
Securities and Exchange Commission on April 2, 2007, and incorporated herein by reference.                          
|              | 
|31.1*         |  | Certification of the Corporate Trustee pursuant to Section 302 of the Sarbanes-Oxley of Act of 2002.                                                                                                                                                                                            
|              | 
|32.1*         |  | Certification of the Corporate Trustee pursuant to Section 906 of the Sarbanes-Oxley of Act of 2002.                                                                                                                                                                                            



|* | Filed herewith.
|- | ---------------



32