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Tidelands Oil & Gas Corporation Provides Synopsis for Past Year

Posted on: Monday, 19 December 2005, 09:00 CST

SAN ANTONIO, Dec. 19 /PRNewswire-FirstCall/ -- Tidelands Oil & Gas Corporation (BULLETIN BOARD: TIDE) , would like to provide the investment community and our loyal shareholders with an expansive synopsis of our Company's ongoing projects and achievements over the course of the past year.

We are extremely gratified with the progress of our business ventures to date and remain focused on distinguishing our Company from our peers. Through the continued efforts of our management team, employees and alliances, we look forward to executing our business plan and becoming a premier player in the gas transmission and storage industry.

Below, we are pleased to provide a comprehensive overview of Tidelands' efforts and accomplishments for fiscal year 2005.

On January 25, 2005, Management embraced Jason Jones as the Executive Vice President of Tidelands' wholly owned subsidiary, Sonterra Energy Corporation ("Sonterra"), to assist us with our business plan to distribute and deliver propane/butane to residential and commercial developments near the North Austin, Texas area. Shortly thereafter, Sonterra entered into a Propane System Agreement ("Agreement") with Cordillera Ranch Development Corp., an upscale residential community development project with home sites ranging from 1 to 10 acres. Furthermore, Sonterra obtained additional Agreements with Taylor Woodrow Homes and Centex Homes to install, operate and expand its propane delivery services throughout their various subdivisions in the Texas Hill Country. Sonterra continues to broaden its area and scope of service to newly developed subdivisions thereby rapidly increasing its revenues and cash flow. At present, Sonterra services homes in the Austin, Texas and San Antonio, Texas areas. We continue to build on this division's existing platform and believe Sonterra Energy will be a celebrated complement to our subsidiaries and the Company as a whole. Sonterra's management team has exhibited exemplary work in developing the division into what we believe will be a very substantial part of Tidelands in the future.

We engaged the award-winning law firm of Mayer, Brown, Rowe & Maw, LLP around mid-February in light of their renowned reputation for the firm's extensive experience, established relationships and expertise in the Mexico energy sector and to act as our counsel for a variety of our Mexico project financings and oil and gas related contracts.

Through Tidelands' Mexican subsidiary, Terranova Energia, S. de R.L. de C.V., on March 18, 2005 we filed with the CRE (Comision Reguladora de Energia de Mexico) for the permitting of the Terranova Oriente pipeline portion of our proposed Burgos Hub Export/Import Project ("Project"), and we were accepted for full review on June 14, 2005. Additionally, we submitted a permit for our proposed underground natural gas storage facility to the CRE on August 5, 2005, which was accepted for full review on October 14, 2005. Toward the later part of 2004, we engaged Remora Technology to develop our HiLoad Dorado Regasification Terminal to be located off Mexico's coast in the gulf waters. In February of 2005, Tidelands announced, through the collaborative efforts of Remora Technology, that we had finalized the design and engineering necessary for the Dorado HiLoad Regasification Terminal. After additional review and evaluation, it has been determined that the LNG station will be located no less than 40 nautical miles from the coast at a depth of 450 feet. The Company is anxiously awaiting approval and award of the above-mentioned permits. This project is the first of its kind in the entire country of Mexico and has had several constitutional issues to resolve. Review committees had to be established because there were none in existence in the entire country, however, we are expecting our first permits during the very first part of next year.

In mid-April, we announced that through another of our subsidiaries, Sonora Pipeline, LLC ("Sonora"), we had filed for permits with the Railroad Commission of Texas for the Progresso International Pipeline and the Mission International Pipeline portions of our Mexico project. Less than a week later, the Railroad Commission expeditiously approved us for these permits, and we announced our intent to file subsequent permits with the Federal Energy Regulatory Commission ("FERC").

By the end of April, Management announced its intent to transfer Tidelands' stock trading platform from the OTC Bulletin Board and move to a more globally recognized exchange in an effort to gain more exposure and interest in our Company's stock. Our focus regarding this move has not waned.

Through Sonora Pipeline, LLC, Tidelands' wholly owned subsidiary, we formally requested the Federal Energy Regulatory Commission ("FERC") Staff on May 26, 2005 to conduct a National Environmental Policy Act ("NEPA") pre- filing review of the U.S. portion of our proposed Mexico project. Less than 2-weeks later on June 8, 2005, FERC approved our request and issued the Project Docket Number PF05-15-000 for the pre-filing process. Since our initial instigation for the application with FERC for the pipelines, we have continued to correspond on a regular basis and provide them documentation that they have requested regarding comments as they pertain to these specific permits and pipelines involved. We will continue to work diligently and expeditiously with FERC to bring these permits to fruition as soon as possible.

During the latter part of July, We engaged HSBC Securities (USA) Inc. to assist Tidelands in raising capital to fund the almost US$1.4 billion cost required to develop our proposed Mexico project. We also retained R.W. Beck International to act as our independent engineering analysis and advisory team in an effort to provide the necessary data to validate an investment by institutions. Furthermore, we engaged the Mexican law firm Ritch, Heather Y Mueller, S.C. of Mexico City, to provide local legal assistance and analysis for our proposed Mexico project.

On August 11, 2005, Tidelands announced that it had entered into a Master Consulting Services Agreement with CenterPoint Energy Pipeline Services, Inc. CenterPoint will provide their technical expertise and serve as the operator for our projects in Mexico inclusive of our proposed Occidente and Oriente sections of our Terranova Pipelines, as well as our proposed underground natural gas storage facility.

Additionally, per our recent SEC 10Q filing reflecting our third-quarter ending September 30, 2005, Management addressed several issues that will be decided upon in the very near term. Some of these previously mentioned issues are as follows:

1. With respect to our pipeline system owned by Reef Ventures, L.P., Management is evaluating an expansion of the pipeline in Coahuila to serve new markets along the state highway No. 57 corridor to Monclova, Coahuila. We currently expect that this project will not be activated until the middle of 2006. The planned natural gas liquid line between Eagle Pass, Texas and Piedras Negras, Coahuila is being re-evaluated in light of new supply sources emerging in Texas and Mexico. We are evaluating the utility of the project as either a tolling business model for existing demand in Coahuila or as a merchant facility in a direct contract with the propane importation arm of PEMEX. We expect further development of the project to be announced by the fourth quarter of 2005. Reef Ventures is awaiting the commitment for gas supply to the Corona/Modelo brewery and bottling plant, which will give the necessary demand to justify the expenditure to build a line for this market. 2. Rio Bravo Energy, LLC was formed on August 10, 1998 to operate the Chittim Gas Processing Plant which was purchased in 1999 and was processing natural gas primarily from Conoco Oil's Sacatosa Field. In October 2002, the plant was shut down due to the declining economics associated with low volume operation of the plant. We plan to either reopen the plant in 2005 when adequate volumes of LPG feedstock from third parties makes plant operations economically attractive or sell the assets to a third party. As noted above, Rio Bravo Energy LLC owns a general partner interest in Marea Associates, L.P. and the minority interest in Terranova Energia, S. de R.L. de C.V. Rio Bravo has made the decision to liquidate the processing plant, and we are currently in negotiations with several interested parties. 3. Sonora Pipeline, LLC was formed in January 1998 to operate the Sonora pipeline network which has the capability of delivering adequate volumes of natural gas for economic operation of the Chittim Gas Processing Plant. The pipeline network consists of approximately 80 miles of gas pipeline. Presently, the line is not in use. The pipeline was acquired in conjunction with the Chittim Gas Processing Plant acquisition. When operational, it would generate revenue from transportation fees charged to third party gas producers shipping natural gas to the Chittim Gas Plant owned by Rio Bravo Energy, LLC. Management is evaluating whether to sell or utilize these assets. 4. Sonora Pipeline, LLC will also own and operate the U.S. (Texas) pipeline segments to be constructed in connection with the Mexican pipeline, LNG regasification terminal and gas storage projects which will interconnect to the U.S. via two international pipeline crossings near McAllen, Texas. Management expects a filing with the Federal Energy Regulatory Commission in the first quarter of 2006 for permission to operate these new pipelines and the granting of presidential permits for the international crossings near Mission and Progreso, Texas for delivery of natural gas into the state of Tamaulipas and the pipelines owned by our Mexican subsidiary, Terranova Energia, S. de R.L. de C.V.

Michael Ward, President and CEO of Tidelands Oil & Gas Corporation, said, "Our projects require an ambitious, aggressive and focused attitude which we commit to daily. The size and scope of our business relies on our Management and employees, as well as those we have aligned ourselves with over the past several years. Together this team has built the platform for our future -- a platform you would expect to see from a much more established company. We are very proud of our accomplishments to date, and we know there is a great deal of work ahead. We remain flexible and nimble to tackle daily and yearly goals as they arise. Our experienced team represents the most competent experts available in the industry today. We appreciate our shareholders' support and look forward to great success in 2006 and beyond."

About Tidelands Oil & Gas Corporation

Tidelands Oil & Gas Corporation, San Antonio, Texas, focuses its business on international pipeline crossings, gas processing plants and gas storage facilities. Through its nine directly and indirectly owned subsidiaries, Tidelands offers a full suite of services and has the capability to satisfy a wide variety of customer needs, both domestically and internationally. For more information about the Company, please visit http://www.tidelandsoilandgas.com/ .

This press release may be deemed to contain certain Forward-Looking Statements with respect to the Company that are subject to risks and uncertainties that include, but are not limited to, those identified in the Company's press releases or discussed from time to time in the Company's Securities and Exchange Commission Filings. Actual results may vary.

INVESTOR CONTACT COMPANY CONTACT Barry Gross Michael Ward Gross Capital, Inc. Tidelands Oil & Gas 361-949-4999 210-764-8642 barry@grosscapital.com togctide@aol.com

Tidelands Oil & Gas Corporation

CONTACT: investors, Barry Gross of Gross Capital, Inc., +1-361-949-4999,or barry@grosscapital.com ; or Michael Ward of Tidelands Oil & GasCorporation, +1-210-764-8642, or togctide@aol.com

Web site: http://www.tidelandsoilandgas.com/

Source: PRNewswire-FirstCall

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