<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
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 June 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)
TEXAS 75-6007863
(State or other jurisdiction (I.R.S. Employer
of incorporation organization Identification No.)
NationsBank of Texas, N.A. 75283-1402
P.O. Box 831402, Dallas, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (214) 508-1796
NONE
(Former name, former address and former fiscal year
if changed since last report)
____________________
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.
Title of Each Class of Units Number of Units of Beneficial Interest
of Beneficial Interest June 30, 1995
--------------------------- ---------------------------
Units of Beneficial Interest 1,386,375
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<PAGE> 2
Part I. Financial Information
TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
Condensed Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
--------------- ---------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . $ 1,699,677 $ 1,758,143
Oil and gas royalties receivable . . . . . . . . . . . . . . . 109,145 151,460
Federal income taxes refundable . . . . . . . . . . . . . . . 2,126
--------------- ---------------
Total current assets . . . . . . . . . . . $ 1,810,948 $ 1,909,603
--------------- ---------------
Oil, gas and other mineral properties . . . . . . . . . . . . . . 2 2
--------------- ---------------
$ 1,810,950 $ 1,909,605
=============== ===============
LIABILITIES AND TRUST EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . $ 983,357 $ 987,325
Income distributable to unitholders 255,575 235,022
Federal income taxes payable . . . . . . . . . . . . . . . . . -- 3,993
--------------- ---------------
Total current liabilities . . . . . . . . . . . . . . . . $ 1,238,932 $ 1,226,340
--------------- ---------------
Trust Equity:
Corpus -- authorized 1,386,525 units of
beneficial interest, issued 1,386,375
units at nominal value . . . . . . . . . . . . . . . . . $ 2 $ 2
Undistributed income . . . . . . . . . . . . . . . . . . . . . 572,016 683,263
--------------- ---------------
572,018 683,265
--------------- ---------------
Total trust equity . . . . . . . . . . . . . . . . . . . $ 1,810,950 $ 1,909,605
=============== ===============
</TABLE>
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<PAGE> 3
TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Six Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
------------------------------- -------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Income:
Oil and gas royalties . . . . . . . $ 156,819 $ 502,875 $ 418,145 $ 992,989
Interest and other . . . . . . . . . 20,880 12,515 40,243 22,481
-------------- -------------- -------------- --------------
$ 177,699 $ 515,390 $ 458,388 $ 1,015,470
-------------- -------------- -------------- --------------
Expenses:
Production and other taxes . . . . . 0 0 620 620
General and administrative . . . . . 27,977 32,451 49,778 61,941
-------------- -------------- -------------- --------------
Total Expenses . . . . . . . . 27,977 32,451 50,398 62,561
-------------- -------------- -------------- --------------
Income before Federal
income taxes . . . . . . . . . . . 149,722 482,939 407,990 952,909
Federal income taxes of
subsidiary . . . . . . . . . . . . 3,652 3,900 7,652 5,875
-------------- -------------- -------------- --------------
Net income . . . . . . . . . . $ 146,070 $ 479,039 $ 400,338 $ 947,034
============== ============== ============== ==============
Net income per unit . . . . . . . . . . $0.11 $0.35 $0.29 $0.68
============== ============== ============== ==============
Distributions per unit . . . . . . . . $0.18 $0.25 $0.37 $1.09
============== ============== ============== ==============
</TABLE>
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<PAGE> 4
TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,338 $ 947,034
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease (increase) in accounts receivable . . . . . . . . . . . . . . 42,315 (176,755)
Decrease (increase) in Federal income taxes . . . . . . . . . . . . . (2,126) 13,868
Increase (decrease) in accounts payable . . . . . . . . . . . . . . . (3,968) (101,473)
Increase (decrease) in Federal taxes payable . . . . . . . . . . . . . (3,993)
-------------- --------------
Net cash provided by operating activities . . . . . . . . . . . . 432,566 682,674
-------------- --------------
Cash flows used in financing activities:
Distributions to unitholders . . . . . . . . . . . . . . . . . . . . . (491,032) (2,605,592)
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . . . . (58,466) (1,922,918)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . 1,758,143 3,758,353
-------------- --------------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . $ 1,699,677 $ 1,835,435
============== ==============
</TABLE>
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<PAGE> 5
TIDELANDS ROYALTY TRUST B AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 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 June 30, 1995 consisted of $70,417
applicable to the Trust and $501,599 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.
- 5 -
<PAGE> 6
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, 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.
Review and Outlook
Net income for the three months ended June 30, 1995, was $.11 per
unit, down from the $.35 realized in the comparable period last year. For the
six-month period ended June 30, 1995, net income was $.29 per unit, down from
the $.68 realized in the comparable period in 1994 (a 57% 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.
No drilling operations were reported during the current six-month
period and no new drilling locations were announced.
A Federal lease sale was held in May, 1995. Neither Chevron nor Elf
acquired a lease in the area covered by the Trust's interest in the sale.
However, 50,000 acres were leased in the contract area by parties who are not
subject to the Trust's interest.
Results of Operations - Three Months Ended June 30, 1995
Royalties from the sale of natural gas accounted for approximately 95%
of income from oil and gas royalties in the 1994 period, but such royalties
decreased to approximately 77% of such income in the 1995 period. The decrease
was primarily due to lower prices. Income from oil royalties increased
slightly in the current period, primarily due to a $3.40 (30%) increase in the
average price received for oil.
Natural gas production declines were expreienced by all leases to
which the Trust's interest applies during the current period, indicating that
these declines were caused by lower demand for natural gas in the United
States.
- 6 -
<PAGE> 7
The quanties of oil and gas sold and average values for the
three months ended June 30, 1995, and those recorded for the
comparable 1994 quarter, are presented in the following table:
<TABLE>
<CAPTION>
OIL 1995 1994
--- -------------- ---------------
<S> <C> <C>
Barrels sold . . . . . . . . . . . . . . . . . 2,442 2,692
$ 14.62 $ 11.22
NATURAL GAS
-----------
Mcf sold . . . . . . . . . . . . . . . . . . . 85,379 221,018
Average price . . . . . . . . . . . . . . . . $ 1.42 $ 2.14
</TABLE>
Results of Operations - Six Months Ended June 30, 1995
Royalties from the sale of natural gas accounted for 96% of income
from oil and gas royalties in the 1994 period, but such royalties decreased to
88% of such income in the 1995 period. The average price received for natural
gas was down $.58 (27%) 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 $4.60 (47%) increase in the average price received for a
barrel of oil. This price increase offset the effect of lower production.
The average price received for oil during the current six-month period
was $14.42 per barrel, which was up from the $9.82 per barrel realized in the
comparable six-month period in 1994.
The quanties of oil and gas sold and average values for the six months
ended June 30, 1995, and those recorded for the comparable 1994 period, are
presented in the following table:
<TABLE>
<CAPTION>
OIL 1995 1994
--- -------------- ---------------
<S> <C> <C>
Barrels sold . . . . . . . . . . . . . . . . . 3,381 4,177
Average price . . . . . . . . . . . . . . . . $ 14.42 $ 9.82
NATURAL GAS
-----------
Mcf sold . . . . . . . . . . . . . . . . . . . 242,201 450,723
Average price . . . . . . . . . . . . . . . . $ 1.53 $ 2.11
</TABLE>
Part II. Other Information
There were no events reportable under Part II of the Quarterly Report
on Form 10-Q.
EXHIBITS
Exhibit 27 -- Financial Data Schedule
- 7 -
<PAGE> 8
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.
TIDELANDS ROYALTY TRUST "B"
NationsBank of Texas, N.A., Trustee
August 11, 1995 By: /s/ KATHY MCQUISTON
-------------------------------------------
Kathy McQuiston, Assistant Vice President
August 11, 1995 /s/ R. RAY BELL
----------------------------------------------
R. Ray Bell, Principal Accounting Officer
- 8 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,699,677
<SECURITIES> 0
<RECEIVABLES> 109,145
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,810,948
<PP&E> 2
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,810,950
<CURRENT-LIABILITIES> 1,238,932
<BONDS> 0
<COMMON> 2
0
0
<OTHER-SE> 572,016
<TOTAL-LIABILITY-AND-EQUITY> 1,810,950
<SALES> 418,145
<TOTAL-REVENUES> 458,388
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 50,398
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 407,990
<INCOME-TAX> 7,652
<INCOME-CONTINUING> 400,338
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 400,338
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
