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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
/X/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
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 0-8677
TIDELANDS ROYALTY TRUST "B"
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 75-6007863
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
NATIONSBANK OF TEXAS, N.A. 75283-1402
P.O. Box 831402, Dallas, Texas (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code (214) 508-1796
NONE
(Former name, former address and former fiscal year
if changed since last report)
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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 NUMBER OF UNITS OF BENEFICIAL INTEREST OUTSTANDING AS OF THE LAST
PRACTICABLE DATE.
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<CAPTION>
Title of Each Class of Units Number of Units of Beneficial Interest
of Beneficial Interest September 30, 1995
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<S> <C>
UNITS OF BENEFICIAL INTEREST 1,386,375
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PART I. FINANCIAL INFORMATION
TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
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<S> <C> <C>
Current Assets:
Cash and cash equivalents........................................ $1,680,531 $1,758,143
Oil and gas royalties receivable................................. 160,276 151,460
Federal income taxes refundable.................................. 376 --
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Total current assets..................................... $1,841,183 $1,909,603
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Oil, gas and other mineral properties.............................. 2 2
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$1,841,185 $1,909,605
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LIABILITIES AND TRUST EQUITY
Current Liabilities:
Accounts payable................................................. $ 985,282 $ 987,325
Income distributable to unitholders.............................. 216,839 235,022
Federal income taxes payable..................................... -- 3,993
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Total current liabilities................................ $1,202,121 $1,226,340
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Trust Equity:
Corpus -- authorized 1,386,525 units of beneficial interest,
issued 1,386,375 units at nominal value....................... $ 2 $ 2
Undistributed income............................................. 639,062 683,263
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639,064 683,265
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Total trust equity....................................... $1,841,185 $1,909,605
========== ==========
</TABLE>
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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
--------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Income:
Oil and gas royalties....................... $278,542 $290,602 $696,687 $1,283,591
Interest and other.......................... 19,819 15,855 60,062 38,336
-------- -------- -------- ----------
$298,361 $306,457 $756,749 $1,321,927
-------- -------- -------- ----------
Expenses:
Production and other taxes.................. -- -- 620 620
General and administrative.................. 9,478 18,531 59,256 80,472
-------- -------- -------- ----------
Total expenses...................... 9,478 18,531 59,876 81,092
-------- -------- -------- ----------
Income before Federal income taxes.......... 288,883 287,926 696,873 1,240,835
Federal income taxes of subsidiary.......... 5,000 3,225 12,652 9,100
-------- -------- -------- ----------
Net income.......................... $283,883 $284,701 $684,221 $1,231,735
======== ======== ======== =========
Net income per unit........................... $0.20 $0.21 $0.49 $0.89
Distributions per unit........................ $0.16 $0.29 $0.53 $1.38
</TABLE>
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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income........................................................ $ 684,221 $1,231,735
Adjustments to reconcile net income to net cash provided by
operating activities:
Decrease (increase) in accounts receivable..................... (8,816) (19,152)
Decrease (increase) in Federal income taxes.................... (376) 14,600
Increase (decrease) in accounts payable........................ (2,043) (104,802)
Increase (decrease) in Federal taxes payable................... (3,993)
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Net cash provided by operating activities................. 668,993 1,122,381
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Cash flows from financing activities -- distributions to
unitholders....................................................... (746,605) (2,952,851)
Net increase (decrease) in cash and cash equivalents.............. (77,612) (1,830,470)
Cash and cash equivalents at beginning of period.................... 1,758,143 3,758,353
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Cash and cash equivalents at end of period.......................... $1,680,531 $1,927,883
========== ==========
</TABLE>
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TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
ACCOUNTING POLICIES
The financial statements include the financial statements of Tidelands
Royalty Trust B (the "Trust") and its wholly-owned subsidiary, are condensed,
and should be read in conjunction with the annual report for the fiscal year
ended December 31, 1994. The financial statements included herein are unaudited,
but in the opinion of management include all adjustments necessary for a fair
presentation of the results of operations for the periods indicated.
UNDISTRIBUTED INCOME
Undistributed income as of September 30, 1995 consisted of $118,187
applicable to the Trust and $520,875 applicable to Tidelands Royalty B
Corporation, the Trust's wholly-owned subsidiary. Distributions to unitholders
are dependent on the volume and price of oil and gas sold by others and will
fluctuate from quarter to quarter.
ACCOUNTS PAYABLE
Accounts payable of $556,942 have been provided to cover refunds that may
be required upon redetermination of gas prices for royalty payments in prior
periods and $346,268 has been reserved for possible overpayments received on
production payments, which amounts have been substantially supplied by Tidelands
Royalty B Corporation.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES
The Trust is a "royalty trust" with overriding royalty interests in oil and
gas leases in the Gulf of Mexico. The Trust's indenture (and the charter and
by-laws of its subsidiary) expressly prohibit the operation of any kind of trade
or business. All royalties received by the Trust, less administrative expenses,
are distributed quarterly to unitholders. Since the Trust's sole purpose is to
collect and distribute cash collected from royalties, there are no requirements
for capital.
GENERAL
Net income for the three months ended September 30, 1995, was $.20 per
unit, down from the $.21 realized in the comparable period last year. For the
nine-month period ended September 30, 1995, net income was $.49 per unit, down
from the $.89 realized in the comparable period in 1994 (a 45% decline). This is
the result of lower prices for natural gas and reduced sales volumes, each of
which is primarily due to lower demand for natural gas in the 1995 period.
Tidelands realizes most of its revenue from royalties on the sale of
natural gas. Beginning in the third quarter of 1994 the average price Tidelands
received for natural gas dropped to $1.66 per mcf from the $2.14 received in the
second quarter of 1994. The volume of gas sold also began to decline in the
third quarter of 1994, although prices have remained in the $1.68 to $1.50 range
for the last 5 quarters.
No drilling operations were reported during the current six-month period
and no new drilling locations were announced.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED SEPTEMBER 30, 1995
Royalties from the sale of natural gas accounted for approximately 91% of
the Trust's income from oil and gas royalties in the 1994 period, but such
royalties decreased to approximately 87% of such income in the 1995 period.
Income from oil royalties increased slightly in the current period, primarily
due to a 52% increase in the volume of oil produced.
Royalties from the sale of natural gas declined approximately 8% in the
current quarter as compared to the comparable quarter in 1994. Volume of natural
gas sold declined approximately 7% and the average price received was $1.64 per
mcf as compared to $1.66 in the comparable quarter in 1994.
The quantities of oil and gas sold and the average prices for oil and gas
for the three months ended September 30, 1995, and those recorded for the
comparable 1994 quarter, are presented in the following table:
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
OIL
Barrels sold................................................... 3,224 2,124
Average Price.................................................. $11.23 $12.92
NATURAL GAS
mcf sold....................................................... 147,908 158,734
Average price.................................................. $1.64 $1.66
</TABLE>
RESULTS OF OPERATIONS -- NINE MONTHS ENDED SEPTEMBER 30, 1995
Royalties from the sale of natural gas accounted for approximately 95% of
the Trust's income from oil and gas royalties in the 1994 period, but such
royalties decreased to approximately 88% of such income in the 1995 period. The
average price received for natural gas was down $.42 (21%) per mcf in the 1995
period as compared to the 1994 period.
Income from oil royalties increased slightly in the current period,
primarily due to a $2.00 (18%) increase in the average price received for a
barrel of oil and a 5% increase in the volume of oil produced.
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Royalties from the sale of natural gas decreased approximately 50% in the
current nine month period from the amount of royalties received in the
comparable period in 1994. The volume of natural gas sold decreased
approximately 36% and the average price received decreased approximately 21%.
The quanties of oil and gas sold and the average prices for oil and gas for
the nine months ended September 30, 1995, and those recorded for the comparable
1994 period, are presented in the following table:
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
OIL
Barrels sold................................................... 6,605 6,301
Average price.................................................. $12.86 $10.86
NATURAL GAS
mcf sold....................................................... 390,109 609,457
Average price.................................................. $1.57 $1.99
</TABLE>
PART II. OTHER INFORMATION
There were no events reportable under Part II of the Quarterly Report on
Form 10-Q.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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<S> <C>
TIDELANDS ROYALTY TRUST "B"
NationsBank of Texas, N.A., Trustee
November 13, 1995 By: /s/ KATHY MCQUISTON
Kathy McQuiston
Assistant Vice President
November 13, 1995 By: /s/ R. RAY
BELL
R. Ray Bell
Principal Accounting Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
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<C> <S>
27 -- Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,680,531
<SECURITIES> 0
<RECEIVABLES> 160,276
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,841,183
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,841,185
<CURRENT-LIABILITIES> 1,202,121
<BONDS> 0
<COMMON> 2
0
0
<OTHER-SE> 639,062
<TOTAL-LIABILITY-AND-EQUITY> 1,841,185
<SALES> 696,687
<TOTAL-REVENUES> 756,749
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 59,876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 696,873
<INCOME-TAX> 12,652
<INCOME-CONTINUING> 684,221
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 684,221
<EPS-PRIMARY> .49
<EPS-DILUTED> .49
</TABLE>
