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Form 10-K

[X]
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




OR

[  ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 
 Commission file number 0-8677 Tidelands Royalty Trust B  Texas
    
    75-6007863(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)c/o The Corporate TrusteeBank of America, N.A.
    
    75283-0650P.O. Box 830650, Dallas, Texas
    
    (Zip Code)(Address of principal executive offices)
 Registrants telephone number, including area code: (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 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.  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 an accelerated filer (as
defined in Rule 12b-2 of the Act).  Aggregate market value of the Units of Beneficial Interest held by
non-affiliates of the Registrant at June 27, 2003: $5,884,257. Number
of Units of Beneficial Interest outstanding as of March 29, 2004 
1,386,375 Units. Documents incorporated by reference: None.




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TABLE OF CONTENTS PART IItem 1.
    
    Business
    
    
    3Item 2.
    
    Properties
    
    
    5Item 3.
    
    Legal Proceedings
    
    
    6Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    6PART IIItem 5.
    
    Market for
Registrants Common Equity and Related Stockholder Matters
    
    
    7Item 6.
    
    Selected Financial Data
    
    
    7Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    10Item 8.
    
    Financial Statements and Supplementary Data
    
    
    11Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    11Item 9A.
    
    Controls and Procedures
    
    
    11PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    12Item 11.
    
    Executive Compensation
    
    
    12Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    12Item 13.
    
    Certain Relationships and Related Transactions
    
    
    13Item 14.
    
    Principal Accountant Fees and Services
    
    
    13PART IVItem 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    14SubsidiariesCertification of Principal Accounting OfficerCertification of the Corporate TrusteeCertification of Principal Accounting OfficerCertification of the Corporate Trustee
  2




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Part I 
 Item 1. Business Organization. Tidelands Royalty Trust B (Tidelands) is a royalty trust
that was created on June 1, 1954, under the laws of the State of Texas.
Tidelands 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 any 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 Tidelands 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
Corporation (Chevron), Elf Acquitane, Inc. (Elf), and their 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 Tidelands, 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. Bank of America, N.A. serves as corporate trustee. The Indenture as amended provides that the term of the royalty trust
created to hold the rights under the 1951 Contract will expire on April 30,
2021, unless extended by the vote of the holders of a majority of the
outstanding units of beneficial interest. Tidelands wholly-owned subsidiary, Tidelands Royalty B Corporation
(Tidelands Corporation), 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 this
subsidiary are paid to Tidelands. Tidelands Corporation, like Tidelands, 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 Contract. The 1951 Contract identifies 60 specific tracts in the Gulf
of Mexico. These tracts are not all the same size and collectively contain
approximately 1,370,000 acres (sometimes referred to herein as the Royalty
Area). Prior to the expiration of the 50-year lease acquisition period on
April 30, 2001 (the Acquisition Expiration Date), if Chevron, Elf or their
assignees had acquired a lease or leases on one of the 60 tracts before and if
oil or natural gas were produced and sold from any such tract, then Chevron,
Elf or their 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 has been paid
under the lease. Thereafter, Tidelands interest in such tract was converted to
an overriding royalty and Tidelands received payments equal to approximately
4.17% of the value of the oil and natural gas sold as long as the lease on such
tract existed. Tidelands has seven assigned leases. At December 31, 2003, five of
Tidelands assigned leases contained producing wells and had paid out their
$1,500,000 production payments. Tidelands royalty interest on four of the
five leases is 4.17%. On the fifth lease the overriding royalty is 1.0416%.
Two recently acquired and assigned leases do not contain any producing wells.
These leases have not yet paid $1,500,000 in production payments. Since the Acquisition Expiration Date, Chevron, Elf and their assignees
are no longer obligated to assign an interest to the Trust out of any lease
that was acquired after that date. Tidelands will continue to receive payments
on the leases acquired by Chevron, Elf or their assignees prior to the
Acquisition Expiration Date. 3




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In 2003, approximately 19% of Tidelands royalty revenues were
attributable to oil and approximately 81% 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 by
changes in the market price for oil and natural gas. During 2003, Tidelands
received royalty payments from seven working interest owners. The following
table shows the percentage received each year for the past 3 years from those
working interest owners: Company
    
    2003
    
    2002
    
    2001Devon Energy Production Company
    
    
    65
    %
    
    
    49
    %
    
    
    68
    %Burlington Resources
    
    
    3
    %
    
    
    20
    %
    
    
    12
    %Millenium Offshore Group Inc
    
    
    
    
    
    
    1
    %
    
    
    12
    %Petroquest Energy Inc
    
    
    
    
    
    
    5
    %
    
    
    4
    %Dominion Exploration & Production Co
    
    
    2
    %
    
    
    5
    %
    
    
    3
    %Forest Oil Corp
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %W&T Offshore Inc
    
    
    12
    %
    
    
    
    
    
    
    Dunhill Resources
    
    
    12
    %
    
    
    17
    %
    
    
    Barron Petroleum Inc
    
    
    5
    %
    
    
    2
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 Tidelands derives no revenues from foreign sources and has no export
sales. Trust Functions. Tidelands is administered by officers and employees of
its Trustee, Bank of America, N.A. and its principal accounting officer who
performs certain management, financial and administrative services for
Tidelands. See Management and Principal Unitholders. Important aspects of Tidelands operations are conducted by third parties.
These 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.
Similarly, Tidelands distributions are processed and paid by The Bank of New
York as the agent for the trustee of Tidelands. Marine Petroleum Corporation, a wholly-owned subsidiary of Marine
Petroleum Trust (Marine), a 32.6% unitholder of Tidelands, leases office
space in Dallas, Texas to provide work space and record storage for Marine,
Marine Petroleum Corporation and Tidelands Corporation. The cost of this office
facility is shared by these two corporations in proportion to each entitys
gross income to the total of such income of both entities. The ability of Tidelands to receive revenues is entirely dependent upon
its entitlement to its rights with respect to the leases held by Chevron, Elf
and their assignees in the Gulf of Mexico (as more fully described in
Properties below). Moreover, no revenues are payable to Tidelands until sales
of production commence from any such lease. The royalty interests held by Tidelands are depleting with each barrel of
oil and mcf of natural gas produced. No funds are reinvested by Tidelands;
thus, these depleting assets are not being replaced. 4




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Item 2. Properties General. Tidelands is not engaged in oil and natural gas operations. Its
income is based on the oil and natural gas operations of others. Tidelands
income is derived from contracts that provide for payments in the nature of
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. Tidelands is not engaged in the production of oil or natural
gas. Tidelands 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. 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 below. 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. No reports on oil and natural gas reserves were filed with any federal
authority or agency during 2003 by Tidelands. 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 average sales price per unit of
oil and natural gas produced upon which payments to Tidelands are based, is set
forth below in the following table: 2003
    
    2002
    
    2001Quantity of royalty oil and natural gas sold:Oil (in barrels
(bbls))
    
    
    8,043
    
    
    
    8,614
    
    
    
    10,625Natural gas (in thousand cubic feet
(mcf))
    
    
    180,196
    
    
    
    229,038
    
    
    
    201,284Weighted average sales price for royalty oil and natural gas
sold:Oil (per bbl)
(1)
    
    $
    31.86
    
    
    $
    25.98
    
    
    $
    24.72Natural gas (per mcf)
(1)(2)
    
    $
    5.44
    
    
    $
    3.44
    
    
    $
    4.49
   (1)
    
    The weighted average sales price is calculated from data provided by the
operators.  (2)
    
    The $127,234 restored contingency reserve is excluded from the computation. Information about average production cost (lifting cost) per unit of
production has been omitted due to its unavailability and inapplicability to
Tidelands. For more recent information regarding crude oil sales prices, see
Managements Discussion and Analysis of Financial Condition and Results of
Operations below. Interests in Properties. Tidelands properties consist of production
payments and overriding royalty interests in 7 oil and natural gas leases
covering 27,948 gross acres located in the Gulf of Mexico in the Galveston,
Sabine Pass and West Cameron areas. Productive Properties.Set forth in the table below is certain
information as of December 31, 2003, concerning gross productive oil and
natural gas wells and gross leased acres in which Tidelands owns interests: Gross Productive Wells:Oil
    
    
    3Natural
Gas
    
    
    710Gross Leased Acres:Productive
    
    
    22,948Non-Productive
    
    
    5,00027,948
 5




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Information regarding net wells or acres is not included since Tidelands
does not own any working interests. The following table contains information about the average daily
production attributable to Tidelands interest, by field, for
the six months ended June 30, 2003, 2002 and 2001. The information contained in the following table is the information most recently available to
us. Net Mcf Oil & Natural GasEquivalent Per Day (1)Year
First
    
    Six Months Ended June 30,Field
    


    Produced

    
    2003
    
    2002
    
    2001Offshore TexasGalveston Block
303
    
    
    1987
    
    
    
    142
    
    
    
    179
    
    
    
    215Offshore LouisianaSabine Pass
Block
13
    
    
    1981
    
    
    
    140
    
    
    
    183
    
    
    
    150West Cameron
Block
165
    
    
    1969
    
    
    
    409
    
    
    
    424
    
    
    
    149West Cameron
Block
225
    
    
    1969
    
    
    
    63
    
    
    
    61
    
    
    
    73
   (1)
    
    Net oil production is reflected in the amount of its mcf equivalent of
natural gas on a btu basis (6 to 1). Present Activities. Tidelands currently receives royalties from oil and
natural gas sold from 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. Tidelands understands from public records that no activity is
being undertaken with respect to drilling or workover operations on the five
leases from which it receives royalties and the two non-producing leases. 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 purchase
agreements between Tidelands predecessors and Gulf and its transferees. The
leasehold working interests that are subject to the rights held by Tidelands
were originally owned in whole or in part by Chevron and, except for two
non-producing leases, have been assigned to other oil and natural gas
exploration and production companies. Certain information including, but not
limited to, reserves, availability of oil and natural gas, average production
cost (lifting cost) per unit, undeveloped acreage and net wells and net acres,
with respect to the particular leases subject to Tidelands interests lies
solely within the knowledge of these concerns. Engineering data, if any,
regarding these leaseholds would have been compiled principally by or for the
working interest owners of these leaseholders and Tidelands believes that it
will not be provided access to such information. Because of this, it appears
that unreasonable efforts and expense would be involved in seeking to obtain
all of the information required under Item 102 of Regulation S-K and Securities
Exchange Act of 1934 Industry Guide 2. 
 Item 3. Legal Proceedings Neither Tidelands nor Tidelands Corporation, nor any of their respective
properties, is a party to or subject to any material pending litigation as of
the date hereof. 
 Item 4. Submission of Matters to a Vote of Security Holders During the last quarter of 2003, no matters were presented to the
unitholders for a vote. 6




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Part II 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters Tidelands is authorized to issue 1,386,525 units of beneficial interest.
As of December 31, 2003, 1,386,375 units were held by 363 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
Tidelands. There were no changes in the number of outstanding units of
beneficial interest during 2003. The units of beneficial interest in Tidelands trade in the
over-the-counter market and are listed in the NASDs Bulletin Board under the
symbol TIRTZ.OB. There is limited trading in Tidelands units of beneficial
interest. The following table presents information obtained from the National
Quotation Bureau, Inc. for 2002 and internet sources for 2003 as to the high
and low bid prices and includes distributions to unitholders, by quarter, for
the past two years: Bid Quotation
    
    DistributionsYear Ended December 31,
    
    High
    
    Low
    
    (Per Unit)2003First
quarter
    
    $
    5.25
    
    
    $
    4.40
    
    
    $
    .23Second
quarter
    
    
    7.00
    
    
    
    4.70
    
    
    
    .29Third
quarter
    
    
    8.25
    
    
    
    6.10
    
    
    
    .21Fourth
quarter
    
    
    8.00
    
    
    
    6.50
    
    
    
    .172002First
quarter
    
    $
    4.40
    
    
    $
    4.40
    
    
    $
    .08Second
quarter
    
    
    4.18
    
    
    
    3.05
    
    
    
    .10Third
quarter
    
    
    3.50
    
    
    
    3.00
    
    
    
    .17Fourth
quarter
    
    
    4.40
    
    
    
    3.25
    
    
    
    .13
 Such over-the-counter market quotations reflect interdealer prices without
retail mark-up, mark-down or commission and may not necessarily represent
actual transactions. Tidelands must distribute to its unitholders all cash accumulated each
quarter, less an amount reserved for accrued liabilities and estimated future
expenses. Such distributions have been made since the third quarter of 1977 and
will continue so long as the income from oil and natural gas royalties exceeds
administrative costs. The Securities and Exchange Commission has neither approved nor
disapproved Tidelands Annual Report for its year ended December 31, 2003, nor
has it passed upon its accuracy or adequacy. While Tidelands complete Form
10-K (excluding exhibits) for the year ended December 31, 2003, is distributed
to unitholders, a copy of such Form 10-K (without 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, Bank of America, N.A., P.O. Box 830650, Dallas, Texas
75283-0650. 
 Item 6. Selected Financial Data (In Thousands, Except Per Unit Amounts)2003
    
    2002
    
    2001
    
    2000
    
    1999Income  oil and natural gas
royalties
    
    $
    1,365
    
    
    $
    1,011
    
    
    $
    1,166
    
    
    $
    1,580
    
    
    $
    1,108Net
income
    
    $
    1,271
    
    
    $
    879
    
    
    $
    1,092
    
    
    $
    1,532
    
    
    $
    1,071Net income per unit
    
    $
    .92
    
    
    $
    .63
    
    
    $
    .79
    
    
    $
    1.11
    
    
    $
    .77Distributions to unitholders
    
    $
    1,349
    
    
    $
    668
    
    
    $
    1,332
    
    
    $
    1,213
    
    
    $
    1,028Distributions per unit
    
    $
    .97
    
    
    $
    .48
    
    
    $
    .96
    
    
    $
    .87
    
    
    $
    .74Total assets
    
    $
    1,489
    
    
    $
    1,533
    
    
    $
    1,299
    
    
    $
    1,688
    
    
    $
    1,560
 7




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Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations Critical Accounting Policies. As an overriding royalty owner, actual
production results are not known to Tidelands until reported by the operator,
which could be a period of 60-90 days later. To comply with accounting
principles generally accepted in the United States of America, we must estimate
earned but unpaid royalties from this production. To estimate this amount, we
utilize historical information based on the latest production reports from the
individual leases and current average prices as reported for oil by Chevron USA
and the spot market price for natural gas delivered at the Henry Hub in
Louisiana for the period under report. 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 believes that it will continue to have revenues sufficient to permit
distributions to be made to unitholders for the foreseeable future, although no
assurance can be made regarding the amounts thereof. The foregoing sentence is
a forward-looking statement. Factors that might cause actual results to differ
from expected results include reductions in prices or demand for oil and
natural gas, which might then lead to decreased production; reductions in
production due to depletion of existing wells or disruptions in service,
including the result of storm damage, blowouts or other production accidents,
and geological changes such as cratering of productive formations; and the
expiration or release of leases subject to Tidelands interests. Tidelands results of operations are significantly impacted by crude oil
and natural gas commodity prices and the quantity of oil and natural gas
production. Crude oil and natural gas prices have historically experienced
significant volatility. Historically, Tidelands has not attempted 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. 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 Review. Tidelands net income in 2003 amounted to $1,271,278 or
$.92 per unit as compared to $879,197 or $.63 per unit in 2002 and $1,092,273
or $.79 per unit in 2001. Distributions per unit were $.97 in 2003, $.48 in
2002 and $.96 in 2001. Administrative expenses decreased approximately $48,000, or 30%, in 2003
due primarily to a reduction in legal expenses following the settlement of
litigation in connection with a successful claim for an overriding royalty
interest in a lease. Production of oil and natural gas and price received has fluctuated over
the past three years. The following table presents the results of these
factors for the past three years: 2003
    
    2002
    
    2001Quantity of royalty oil and natural gas sold:Oil
(bbls)
    
    
    8,043
    
    
    
    8,614
    
    
    
    10,625Natural gas
(mcf)
    
    
    180,196
    
    
    
    229,038
    
    
    
    201,284Weighted average sales price for royalty oil and
natural gas sold:Oil (per
bbl)(1)
    
    $
    31.86
    
    
    $
    25.98
    
    
    $
    24.72Natural gas (per
mcf)(1)(2)
    
    $
    5.44
    
    
    $
    3.44
    
    
    $
    4.49
 8




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(1)
    
    The weighted average sale price is calculated from data provided by the
operators.  (2)
    
    The $127,234 restored contingency reserve is excluded from the computation. During the year ended December 31, 2003, Tidelands restored to income
$127,234 of its contingency reserve that management determined was no longer
needed to cover refunds that may be required upon redetermination of natural
gas prices for royalty payments in prior periods. Net income per unit was
increased $.09 by this decision. The following table and related discussion and analysis shows the royalty
income, the net quantities sold, and the average price received for oil and
natural gas during the past three years. The following table presents
comparative operating data which reflects these underlying circumstances. For Years Ended December 31,2003
    
    2002
    
    2001Income:Oil royalties
(1)
    
    $
    256,257
    
    
    $
    223,812
    
    
    $
    262,623Natural gas royalties
(2)
    
    
    981,234
    
    
    
    787,267
    
    
    
    903,587$
    1,237,491
    
    
    $
    1,011,079
    
    
    $
    1,166,210Net production quantities:Oil
(bbls)
    
    
    8,043
    
    
    
    8,614
    
    
    
    10,625Natural gas
(mcf)
    
    
    180,196
    
    
    
    229,038
    
    
    
    201,284Average net prices:Oil
(1)
    
    $
    31.86
    
    
    $
    25.98
    
    
    $
    24.72Natural gas
(1)(2)
    
    $
    5.44
    
    
    $
    3.44
    
    
    $
    4.49
   (1)
    
    These amounts are net of the cost of transportation from offshore leases to
onshore receiving points.  (2)
    
    The $127,234 restored contingency reserve is excluded from the computation. Oil and Natural Gas Royalties  2003 and 2002:During fiscal 2003,
Tidelands received approximately 19% of its royalty income from the sale of oil
and 81% from the sale of natural gas. Income from such oil and natural gas
royalties in fiscal 2003 increased approximately 35% from fiscal 2002. Revenue from oil royalties amounted to $256,257 in fiscal 2003, an
increase of 14% as compared to the $223,812 realized in fiscal 2002. The
increase was due to the increase in the average price realized during 2003. Revenue from natural gas royalties amounted to $1,108,476, an increase of
41% as compared to the $787,267 realized in fiscal 2002. The increase was due
to an increase in the price realized for natural gas, the inclusion of $127,234
from the reduction of the reserved funds slightly offset by a decrease in the
volume of natural gas produced during 2003. General and administrative expenses for 2003 amounted to $110,384, a
decrease of 30% over $158,656 in 2002. The primary cause of this decrease was
due to a reduction in legal fees and expenses following settlement of the
lawsuit against Chevron. Oil and Natural Gas Royalties  2002 and 2001:During fiscal 2002,
Tidelands received approximately 22% of its royalty income from the sale of oil
and 78% from the sale of natural gas. Income from such oil and natural gas
royalties in fiscal 2002 decreased approximately 13% from fiscal 2001. Oil royalties during fiscal 2002 in the amount of $223,812 were 15% lower
than oil royalties received in fiscal 2001 in the amount of $262,623. There
was an increase in the average price received that was not offset by a decrease
in the quantity of oil sold. Natural gas royalties during fiscal 2002 in the amount of $787,267 were
13% lower than natural gas royalties received in fiscal 2001 in the amount of
$903,587. The decrease was due to a decrease in the price received that was
offset by an increase in the quantity of natural gas sold. 9




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General and administrative expenses for 2002 amounted to $158,656, an
increase of 47% over $107,650 in 2001. The primary cause of this increase was
the cost of litigation started on July 8, 2002 against Chevron to acquire an
interest in a lease which we believed we were entitled to. Capital Resources and Liquidity. Because of the nature of Tidelands as a
trust entity, there is no requirement for capital; its only obligation is to
distribute to unitholders the net income actually collected. As an
administrator of oil and natural gas royalty properties, Tidelands collects
income monthly, pays expenses of administration, and disburses all net 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. Tidelands Indenture (and the charter and by-laws of Tidelands
Corporation) expressly prohibits the operation of any kind of trade or
business. Tidelands oil and natural gas properties are depleting assets and
are not being replaced due to the prohibition against these investments.
Because of these restrictions, Tidelands does not require short term or long
term capital. These restrictions, along with other factors, allow Tidelands to
be treated as a grantor trust. All income and deductions, for tax purposes,
should flow through to each individual unitholder. Tidelands is not a taxable
entity. Tidelands
does not currently have any long term contractual obligations, other
than the distributions to unitholders. 
 Item 7A. Quantitative and Qualitative Disclosure 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.
Oil and natural gas prices have historically experienced significant
volatility. Tidelands does not attempt to manage its commodity price
risk though the use of fixed price contracts or financial derivatives. Due to the short span of time between receipts and disbursements, cash
held by the Trust is held in a non-interest bearing trust account. Oil
and natural gas royalties received by Tidelands Royalty B Corporation,
our subsidiary, prior to payment of the 95% Net Profits Interest are
held in money market accounts that invest in U S Treasury securities
and are considered not at risk. The
retained earnings of the subsidiary are 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 considered not at
risk. However,
on December 31, 2003, our subsidiary held $600,000 of such securities
that mature in two, three and five years with an average yield of
4.33%. If held to maturity these securities are believed to be not at
risk. Should a need arise for these funds before the securities mature
and if interest rates increase there is, under these conditions, a
possible market risk. The market value of these securities on
December 31, 2003 was $620,872. 
 Item 8. Financial Statements and Supplementary Data Tidelands consolidated financial statements listed in the following
index, together with the related notes and the report of KPMG LLP, independent
certified public accountants, are presented on pages 13 through 20 hereof: Page Independent Auditors
Report
    
    
    15 Consolidated Balance Sheets as of December 31, 2003 and
2002
    
    
    16 Consolidated Statements of Income and Undistributed Income for the Three Years
Ended December 31,
2003
    
    
    17 Consolidated Statements of Cash Flows for the Three Years Ended December 31,
2003
    
    
    18 Notes to Consolidated Financial
Statements
    
    
    19
 See also Exhibits, Financial Statement Schedules and Reports on Form 8-K
of this Form 10-K for further information concerning the financial statements
of Tidelands and its subsidiaries. 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 During 2003 and 2002 there were no disagreements by Tidelands with its
principal accountants on any matter of accounting principles or practices or
financial statement disclosure. 
 Item 9A. 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 Exchange Act
Rules 13a-15 and 15d-15. Based upon that evaluation, the Trustee
concluded that Tidelands disclosure controls and procedures
are effective in timely alerting the Trustee to material information
relating to Tidelands required to be included in Tidelands
periodic filings with the Securities and Exchange Commission. There
has not been any change in Tidelands internal control over
financial reporting during the period covered by this report that has
materially affected, or is reasonably likely to materially affect,
Tidelands internal control over financial reporting. 10




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##### Table of Contents



Part III 
 Item 10. Directors and Executive Officers of the Registrant Tidelands is a trust created under the laws of the State of Texas.
Tidelands Indenture does not provide for directors or officers or the election
of directors or officers. Under the Indenture, Bank of America, N.A. serves as
Trustee. R. Ray Bell may be considered a significant employee of Tidelands. Mr.
Bell has been involved in the administration of Tidelands since its inception.
He is 76 years old, and since July 1, 1977, Mr. Bell has been employed by
Marine Petroleum Corporation, a subsidiary of Marine, as president, vice
president and director. Mr. Bell will serve in such capacities until the next
annual meeting of directors of Marine Petroleum Corporation or until his
successor is elected and qualified. Mr. Bell acts as the principal accounting
officer of Tidelands for purposes of Tidelands filings with the SEC. Tidelands has no directors and officers and Marine is the only unitholder that is a beneficial owner of more than ten percent
of the outstanding units. Tidelands is unaware of any person that failed to report on a timely basis reports required by Section 16(A) of the Exchange Act. Because Tidelands has no
employees, it does not have a code of ethics. Employees of the
corporate trustee, Bank of America, N.A., must comply with the
banks code of ethics, a copy of which will be made available to unitholders without charge, upon request by appointment at Bank of America Plaza, 17th
floor, 901 Main Street, Dallas, Texas 75202. Tidelands has no directors and
therefore has no audit committee or audit committee financial expert and no nominating committee. 
 Item 11. Executive Compensation During Tidelands fiscal year ended December 31, 2003, Tidelands paid or
accrued fees of $21,008 to Bank of America, N.A., as corporate trustee. During
Tidelands fiscal year ended December 31, 2003, Tidelands paid $18,302 to
Marine Petroleum Corporation as its share of certain administrative expenses.
These expenses are shared in the ratio of each of Tidelands and Marines gross
receipts to the total gross receipts of both trusts. 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth the persons known to Tidelands who own
beneficially more than five percent of its outstanding units of beneficial
interest: Amount BeneficiallyName and Address of
    
    Owned as of
    
    PercentTitle of Class
    
    Beneficial Owner
    
    December 31, 2003
    
    of ClassUnits of
Beneficial Interest
    
    Marine Petroleum Trust P.O. Box
830241 Dallas, Texas  75283-0241
    
    
    452,366
    
    
    
    32.6
    %
 There are no executive officers or directors of Tidelands. Bank of
America, N.A., the corporate trustee, does not beneficially own any units of beneficial interest. Tidelands does not maintain any equity compensation plans and Tidelands has not purchased any units during the period
covered by this report.
The trustee knows of no arrangements the operation of which may at a subsequent date result in a change of control of Tidelands. 
 Item 13. Certain Relationships and Related Transactions During the fiscal year ended December 31, 2003, there were no material
transactions or series of similar transactions, since the beginning of
Tidelands last fiscal year, or any currently proposed transactions or series
of similar transactions, to which Tidelands was or is to be a party, in which
the amount involved exceeds $60,000, and in which any executive officer or any
security holder who is known by Tidelands, or any member of the immediate
family of any of the foregoing persons, has an interest. 
 Item 14. Principal Accountant Fees and Services Fees for services performed by KPMG LLP for the years ended December 31, 2003 and 2002 are: 2003
    
    2002Audit Fees
    
    $
    25,000
    
    
    $
    23,500Audit-related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
 As
referenced in Item 10, above, Tidelands has no audit committee, and as a result,
has no audit committee pre-approval policy with respect to fees paid to KPMG LLP. 11




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##### Table of Contents



Part IV 
 Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K  (a)
    
    Financial Statements  See Financial Statements and Supplementary Data
above. None.  (b)
    
    Reports on Form 8-K  No reports on Form 8-K have been filed during the
last quarter of the fiscal year ended December 31, 2003.  (c)
    
    Exhibits 4.1
    
    
    Indenture of Trust dated June 1, 1954, as amended, filed as an Exhibit to Tidelands Quarterly Report on Form 10-Q for the period ended September 30, 2001, filed with the Securities and Exchange Commission on November 14, 2001,
and incorporated herein by reference.21.1
    
    
    Subsidiaries of Tidelands Royalty
Trust B.31.1
    
    
    Certification of the Principal Accounting Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of the Corporate Trustee pursuant to Section 302 of the
Sarbanes-Oxley of Act of 2002.32.1
    
    
    Certification of the Principal Accounting Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of the Corporate Trustee pursuant to
Section 906 of the Sarbanes-Oxley of Act of 2002.
  (d)
    
    Financial Statement Schedules  All required schedules are included in the
financial statements included in this Annual Report on Form 10-K. 12




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##### Table of Contents



INDEPENDENT AUDITORS REPORT The Trustee
Tidelands Royalty Trust B: We have audited the accompanying consolidated balance sheets of Tidelands
Royalty Trust B (Tidelands) and subsidiary as of December 31, 2003 and
2002, and the related consolidated statements of income and undistributed
income and cash flows for each of the years in the three-year period ended
December 31, 2003. These consolidated financial statements are the
responsibility of Tidelands management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes 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. In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Tidelands
Royalty Trust B and subsidiary as of December 31, 2003 and 2002 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America. Dallas, TexasMarch 19, 2004
    
    /s/ KPMG LLP
 13




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY 
 CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002 2003
    
    2002AssetsCurrent assets:Cash and cash
equivalents
    
    $
    605,962
    
    
    $
    520,375Oil and natural gas royalties
receivable
    
    
    165,765
    
    
    
    274,264Federal income taxes
receivable
    
    
    
    
    
    
    12,037Interest
receivable
    
    
    5,664
    
    
    
    4,654Total current
assets
    
    
    777,391
    
    
    
    811,330Oil, natural gas and other mineral
properties
    
    
    2
    
    
    
    2Investment in U.S. Treasury and
agency
bonds
    
    
    712,036
    
    
    
    721,537$
    1,489,429
    
    
    $
    1,532,869Liabilities and Trust EquityCurrent liabilities:Accounts payable (note
3)
    
    $
    5,132
    
    
    $
    131,033Federal income taxes
payable
    
    
    702
    
    
    
    Income distributable to
unitholders
    
    
    334,960
    
    
    
    175,655Total current
liabilities
    
    
    340,794
    
    
    
    306,688Trust equity:Corpus  authorized 1,386,525 units of beneficial interest,
issued 1,386,375 units at nominal
value
    
    
    2
    
    
    
    2Undistributed income (note
2)
    
    
    1,148,633
    
    
    
    1,226,179Total trust
equity
    
    
    1,148,635
    
    
    
    1,226,181$
    1,489,429
    
    
    $
    1,532,869
 See accompanying notes to consolidated financial statements. 14




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY 
 CONSOLIDATED STATEMENTS OF INCOME AND UNDISTRIBUTED INCOME THREE YEARS ENDED DECEMBER 31, 2003
 2003
    
    2002
    
    2001Income:Oil and natural
gas
royalties
    
    $
    1,364,733
    
    
    $
    1,011,079
    
    
    $
    1,166,210Interest and
other
    
    
    22,419
    
    
    
    26,774
    
    
    
    45,742Total
income
    
    
    1,387,152
    
    
    
    1,037,853
    
    
    
    1,211,952Expenses:General and
administrative
    
    
    110,384
    
    
    
    158,656
    
    
    
    107,650Income
before
federal
income
taxes
    
    
    1,276,768
    
    
    
    879,197
    
    
    
    1,104,302Federal income
taxes of subsidiary
(note
1(e))
    
    
    5,490
    
    
    
    
    
    
    
    12,029Net
income
    
    
    1,271,278
    
    
    
    879,197
    
    
    
    1,092,273Undistributed
income at beginning
of year
    
    
    1,226,179
    
    
    
    1,014,707
    
    
    
    1,254,8882,497,457
    
    
    
    1,893,904
    
    
    
    2,347,161Distributions to
unitholders
    
    
    1,348,824
    
    
    
    667,725
    
    
    
    1,332,454Undistributed
income at end of
year
    
    $
    1,148,633
    
    
    $
    1,226,179
    
    
    $
    1,014,707Net income per
unit
    
    $
    .92
    
    
    $
    .63
    
    
    $
    .79Distributions per
unit
    
    $
    .97
    
    
    $
    .48
    
    
    $
    .96Weighted average
units
outstanding
    
    
    1,386,375
    
    
    
    1,386,375
    
    
    
    1,386,375
 See accompanying notes to consolidated financial statements. 15




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2003 2003
    
    2002
    
    2001Cash flows from operating activities:Net
income
    
    $
    1,271,278
    
    
    $
    879,197
    
    
    $
    1,092,273Adjustments to reconcile net income to net cash
provided by
operating activities:Amortization of
premium
    
    
    15,802
    
    
    
    4,272
    
    
    
    Change in assets and liabilities:Oil and natural gas royalties
receivable
    
    
    108,499
    
    
    
    (151,701
    )
    
    
    224,142Federal income taxes
receivable
    
    
    12,037
    
    
    
    (1,517
    )
    
    
    (8,070
    )Interest
receivable
    
    
    (1,010
    )
    
    
    (4,654
    )
    
    
    Accounts
payable
    
    
    (125,901
    )
    
    
    (551
    )
    
    
    (301
    )Federal income tax
payable
    
    
    702
    
    
    
    
    
    
    
    Net cash provided by operating
activities
    
    
    1,281,407
    
    
    
    725,046
    
    
    
    1,308,044Cash flows used in investing activities:Investment in U.S. Treasury and agency
bonds
    
    
    (206,301
    )
    
    
    (725,809
    )
    
    
    Proceeds from sale of U.S. agency
bonds
    
    
    200,000
    
    
    
    
    
    
    
    Net cash used in investing
activities
    
    
    (6,301
    )
    
    
    (725,809
    )
    
    
    Cash flows from financing activities  cash distributions
to
unitholders
    
    
    (1,189,519
    )
    
    
    (644,842
    )
    
    
    (1,481,297
    )Net increase (decrease) in cash and cash
equivalents
    
    
    85,587
    
    
    
    (645,605
    )
    
    
    (173,253
    )Cash and cash equivalents at beginning of
year
    
    
    520,375
    
    
    
    1,165,980
    
    
    
    1,339,233Cash and cash equivalents at end of
year
    
    $
    605,962
    
    
    $
    520,375
    
    
    $
    1,165,980
 See accompanying notes to consolidated financial statements. 16




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL (a) General Tidelands Royalty Trust B (Tidelands) was established on June 1, 1954
with a transfer of contract rights to certain properties to Tidelands in
exchange for units of beneficial interest. The contract rights enable Tidelands
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 beginning April 30, 1951. Tidelands is required under its indenture to distribute all income, after
paying its liabilities and obligations, to the unitholders quarterly. Tidelands
cannot invest any of its money for any purpose and cannot engage in a trade or
business. Tidelands 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 paid to Tidelands.
Tidelands Corporation, like Tidelands, is prohibited from engaging in a trade
or business and does only those things necessary for the administration and
liquidation of its properties. Tidelands is authorized to pay the expenses of
Tidelands Corporation should it be necessary. Tidelands and its subsidiary have no employees. Tidelands has entered into
an arrangement with Marine Petroleum Corporation (a wholly-owned subsidiary of
Marine Petroleum Trust, an affiliate of Tidelands) to share certain
administrative expenses and to assist the trustees in the administration of the
trust. For the years ended 2003, 2002 and 2001 Tidelands paid $18,000, $22,000
and $17,000 to Marine Petroleum Corporation, respectively. At December 31,
2003 and 2002, Marine Petroleum Trust owned 32.6% of Tidelands 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 beyond the original expiration date of April 30, 2001 to April 30,
2021. (c) Principles of Consolidation The consolidated financial statements include Tidelands and its
wholly-owned subsidiary. All intercompany accounts and transactions have been
eliminated in consolidation. (d) Oil, Natural gas and Other Mineral Properties At the time Tidelands was established, no determinable market value was
available for the assets transferred to Tidelands; consequently, nominal values
were assigned. Accordingly, no allowance for depletion has been computed. 17




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##### Table of Contents



TIDELANDS ROYALTY TRUST B AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED) Tidelands revenues are derived from production payments and overriding
royalty interests related to properties located in the Gulf of Mexico. Net revenues from oil and natural gas royalties related to proved
developed oil and natural gas reserves were $1,364,733, $1,011,079 and
$1,166,210 in 2003, 2002, and 2001, respectively. (e) Federal Income Taxes No provision has been made for Federal income taxes on Tidelands income
since such taxes are the liability of the unitholders. Federal income taxes are
provided on the income (if any) of Tidelands Corporation, excluding the 95% of
oil and natural gas royalties to be distributed to Tidelands and after
deducting statutory depletion. Tidelands Corporation had federal income taxes
payable of $702 as of December 31, 2003. There were no significant deferred
tax assets or liabilities as of December 31, 2003 and 2002. The primary
difference between the effective tax rate and the statutory tax rate is due to
nontaxable income. (f) Credit Risk Concentration and Cash Equivalents Financial instruments which potentially subject Tidelands and its
wholly-owned subsidiary to concentrations of credit risk are primarily
investments in cash equivalents and unsecured oil and natural gas royalties
receivable. Tidelands and its wholly-owned subsidiary place their cash
investments with financial institutions that management considers creditworthy
and limit the amount of credit exposure from any one financial institution.
Royalties receivable are from large creditworthy companies and Tidelands
historically has not encountered collection problems. The estimated fair values
of cash equivalents and oil and natural gas royalties receivable approximate
the carrying values due to the short term nature of these financial
instruments. Cash equivalents of $236,426 and $327,719 at December 31, 2003 and 2002,
respectively, consist of cash held in a money market account that invests in
U.S. Treasury securities. For purposes of the statements of cash flows,
Tidelands considers all investments with original maturities of three months or
less to be cash equivalents. (g) Statements of Cash Flows Tidelands Corporation paid $5,000, $1,562 and $20,100 in federal income
taxes in 2003, 2002, and 2001, respectively. No payments of interest were made
in 2003, 2002 and 2001. (h) Use of Estimates The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. (i) Net Income per Unit Net income per unit is determined by dividing net income by the weighted
average number of units of beneficial interest outstanding during the period. 18




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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED) (j) Significant Royalty Sources Royalty revenue received by Tidelands from producers is summarized as
follows: 2003
    
    2002
    
    2001Devon Energy Production
Company
    
    
    65
    %
    
    
    48
    %
    
    
    68
    %W & T
Offshore
    
    
    12
    %
    
    
    
    
    
    
    Burlington Resources Oil and Natural Gas
Company
    
    
    3
    %
    
    
    20
    %
    
    
    12
    %Dunhill Resources,
Inc
    
    
    12
    %
    
    
    17
    %
    
    
    Millenium Offshore
Group
    
    
    
    
    
    
    1
    %
    
    
    12
    %Others
    
    
    8
    %
    
    
    14
    %
    
    
    8
    %100
    %
    
    
    100
    %
    
    
    100
    %
 (2) UNDISTRIBUTED INCOME Undistributed income includes $873,425 and $834,167 applicable to the
subsidiary corporation at December 31, 2003 and 2002, respectively. (3) OVERPAID ROYALTIES Tidelands recorded a liability for possible royalty overpayments received
in various years from 1988 through 1993, which is reflected in accounts payable
in the accompanying consolidated balance sheets. During 2003, Tidelands
determined that $127,234 was no longer required to be reserved, because it was
no longer probable that repayment of such amounts actually would be required.
Accordingly, accounts payable was reduced and oil and natural gas royalty
income was increased by such amount. (4) SUPPLEMENTAL INFORMATION RELATING TO OIL AND NATURAL GAS RESERVES (UNAUDITED) Oil and natural gas reserve information relating to Tidelands royalty
interests is not presented because such information is not available to
Tidelands. Tidelands share of oil and natural gas produced for its royalty
interests was as follows: oil (barrels)  8,043 in 2003, 8,614 in 2002 and
10,625 in 2001; and natural gas (mcf)  180,196 in 2003, 229,038 in 2002 and
201,284 in 2001. (5) SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) The following quarterly financial information for the years ended December
31, 2003 and 2002 is unaudited; however, in the opinion of management, all
adjustments necessary to present a fair statement of the results of operations
for the interim periods have been included. 19




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##### Table of Contents



Oil andNatural Gas
    
    Net
    
    Net IncomeRoyalties
    
    Income
    
    Per UnitQuarter ended:March 31,
2003
    
    $
    470,936
    
    
    $
    442,174
    
    
    $
    .32June 30,
2003
    
    
    365,866
    
    
    
    333,038
    
    
    
    .24September 30,
2003
    
    
    179,234
    
    
    
    170,604
    
    
    
    .12December 31,
2003
    
    
    348,697
    
    
    
    325,462
    
    
    
    .24$
    1,364,733
    
    
    $
    1,271,278
    
    
    $
    .92Quarter ended:March 31,
2002
    
    $
    194,571
    
    
    $
    169,353
    
    
    $
    .12June 30,
2002
    
    
    172,655
    
    
    
    137,504
    
    
    
    .10September 30,
2002
    
    
    303,784
    
    
    
    269,081
    
    
    
    .19December 31,
2002
    
    
    340,069
    
    
    
    303,259
    
    
    
    .22$
    1,011,079
    
    
    $
    879,197
    
    
    $
    .63
 20




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##### Table of Contents



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
(Registrant)By:
    
    Bank of America, N.A.(in its capacity as Corporate Trustee
of Tidelands Royalty Trust B and not in
its individual capacity or otherwise)Date:
March 29, 2004
    
    By:
    
    /s/ RON E. HOOPERRon E. Hooper

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
    
    DATEBank of America, N.A.
    
    Corporate Trustee
    
    March 29, 2004By:
    
    /s/ RON E. HOOPERRon E. HooperVice President/s/ R. RAY BELL
    
    Principal Accounting Officer
    
    March 29, 2004R. Ray Bell
 21




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Tidelands Royalty Trust B
c/o Bank of America, N.A.
P.O. Box 830241
Dallas, Texas 75283-0241




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description4.1
    
    Indenture of Trust dated June 1, 1954, as amended, filed as an Exhibit to Tidelands Quarterly Report on Form 10-Q for the period ended September 30, 2001, filed with the Securities
and Exchange Commission on November 14, 2001, and incorporated herein by reference.21.1
    
    Subsidiaries of Tidelands Royalty
Trust B.31.1
    
    Certification of the Principal Accounting Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Corporate Trustee pursuant to Section 302 of the
Sarbanes-Oxley of Act of 2002.32.1
    
    Certification of the Principal Accounting Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Corporate Trustee pursuant to Section 906 of the
Sarbanes-Oxley of Act of 2002.