Tidelands Oil & Gas Corporation

Symbol: 
TIDE

Recommended: 
03/04/01

Price at 
03/04/02: $0.97

Target: 
12/31/02 - $3.47

52 Week Range: 
$0.155 - $1.81
Financial Summary

Tidelands Oil and Gas (TIDE) is a publicly traded diversified oil and gas company. Management has in excess of 100 years of experience in all phases of the industry. Experience in drilling, completion and re-completions, operating oil and gas properties, operating and managing gas processing plants, marketing oil, gas and liquid products and transportation of natural gas to markets throughout the southern United States.

Period Ending Sep 30, 2001 Jun 30, 2001 Mar 31, 2001 Dec 31, 2000
Current Assets
    Cash And Cash Equivalents $282,043 $388,896 $328,721 $312,509
    Short Term Investments N/A N/A N/A N/A
    Net Receivables $98,307 $139,028 $128,196 $145,523
    Inventory $10,010 $13,169 $14,815 $18,212
    Other Current Assets $25,764 $51,405 $77,044 $102,772
Total Current Assets $416,124 $592,498 $548,776 $579,016
Long Term Assets
    Long Term Investments $23,764 $24,514 $27,706 $16,978
    Property Plant And Equipment $664,624 $665,084 $887,340 $900,683
    Goodwill N/A N/A N/A N/A
    Intangible Assets $421,736 $304,811 $55,762 $56,712
    Accumulated Amortization N/A N/A N/A N/A
    Other Assets $1,696 $1,847 $2,661 $1,594
    Deferred Long Term Asset Charges N/A N/A N/A N/A
Total Assets $1,527,944 $1,588,754 $1,522,245 $1,554,983
Current Liabilities
    Accounts Payable $791,901 $827,316 $832,403 $762,469
    Short Term And Current Long Term Debt $616,826 $675,779 $732,057 $679,552
    Other Current Liabilities N/A N/A N/A N/A
Total Current Liabilities $1,408,727 $1,503,095 $1,564,460 $1,442,021
    Long Term Debt $37,000 $37,000 $37,000 $37,000
    Other Liabilities $1,324,760 $1,051,048 $910,000 $850,000
Total Liabilities $2,770,487 $2,591,143 $2,511,460 $2,329,021
Stock Holders Equity
    Common Stock $22,717 $23,609 $20,879 $20,729
    Retained Earnings ($3,599,011) ($3,320,415) ($2,880,641) ($2,599,685)
    Treasury Stock N/A N/A N/A N/A
    Capital Surplus $2,359,338 $2,359,338 $1,902,268 $1,872,418
    Other Stockholder Equity ($25,587) ($64,921) ($31,721) ($67,500)
Total Stockholder Equity ($1,242,543) ($1,002,389) ($989,215) ($774,038)
Net Tangible Assets ($1,664,279) ($1,307,200) ($1,044,977) ($830,750)

 

Share-Related Items

Recent Price (03/11/02) $1.03
Market Capitalization $26.0M
Shares Outstanding 26.0M
Float approx. 16.9M
Daily Volume (10-day avg) 100.8K
Delayed Quote

   
Business Description
TIDE is the parent company of five wholly owned Texas subsidiary corporations.
  • Tidelands Oil Corporation, formed in 1985, operates all oil wells owned by TIDE
  • Tidelands Gas Corporation, formed in 1996, operates all gas wells owned by TIDE
  • Rio Bravo Energy LLC, formed in 1999, owns and operates a natural gas processing plant extracting propane, butane and natural gas.
  • Sonora Pipeline LLC, formed in 1999, owns and operates gas pipelines which brings the gas supply to RIO Bravo's gas processing plant
  • Reef International LLC, is the entity currently filing for all permits for an international pipeline crossing into Mexico.

Tidelands Oil and Gas Corporation was formed from the acquisition of a public trading "shell" corporation (formerly C-2 Technologies, Inc.)  Tidelands Gas Corporation was primarily formed to operate natural gas wells owned by Tidelands. Tidelands Gas Corporation negotiated and purchased what was then known as the "Carrizo Springs Pipeline System".  The purchase was made from Aquila Gas Transmission Company, a large interstate gas transmission company. This pipeline system extends a distance of 80 miles across three counties and provides a method for transporting gas from various properties across the Maverick County Basin.

Rio Bravo Energy LLC acquired a gas processing plant from CONOCO with a capacity to produce 12 million cubic feet of gas per day.  This plant is currently processing all of the gas from the CONOCO Sacatosa Field, Merit Energy’s Pena Creek Field and the exploration company.  Sonora Pipeline Company LLC operates approximately 400 miles of pipeline that delivers gas into the Rio Bravo Energy LLC gas processing plant.

In addition to the CONOCO plant, TIDE has made arrangements to purchase another processing plant that has the capability to process approximately 20 million cubit feet of gas per day.  This processing plant will be moved onto the site of the CONOCO plant.  The plant will increase the total volume to be processed to approximately 32 million cubit feet of gas per day.  The gathering and processing contracts are currently being negotiated.  TIDE will be solely responsible for the operation, federal and state filings, accounting and other responsibilities for the plant.

Reef International LLC was recently formed to construct and operate an international pipeline crossing into Mexico.  The crossing will consist of a twelve- inch natural gas pipeline that will deliver gas to the Mexico gas distributor in Piedras Negras, Mexico and a six-inch pipeline crossing to transport propane and butane.  In addition, Reef International is currently working several other international crossings along the Texas/Mexico border with the next crossing to be permitted being a natural gas crossing at El Paso/Juarez.

The Company's website is located at www.tidelandsoilandgas.com. 

Key Management

Tidelands' management team has in excess of 100 years of combined experience in all phases of the Oil and Gas Industry.  This experience includes drilling, completion, re-completions, operating oil and gas properties, operating and managing gas processing plants, marketing and transporting oil, gas and liquid products, and transportation of natural gas to markets.

Report Hot Link - Key Management Bios

Analyst Summary

Chart Courtesy of Stockgroup's Smallcapcenter.com

TIDE is in the natural gas transporting and gas processing business, marketing its products into Mexico.  In addition, TIDE has a natural gas pipeline system approximately 400 miles in length, covering three counties. Sonora Pipeline Company, LLC operates the pipeline that feeds the gas processing plant. This will create an excellent revenue stream for Tidelands.

These revenues are supported by long term contracts giving TIDE a secured revenue stream and solidifying the company’s existence and ability to expand.

TIDE markets its natural gas to third party gas end user markets that include consumer and industrial users. In addition, Tidelands processes natural gas through its Rio Bravo Energy, LLC natural gas processing plant. This plant processes natural gas from the Conoco Sacatosa Field that is made up of approximately 3000 wells and also markets some of the plant products, such as propane and butane to markets in Mexico.

Reef International LLC will deliver natural gas to Conaga at Houston Ship + $0.30/mcf and has purchased gas at Houston Ship -$0.30/mcf for a $0.60/mcf profit plus a 2% fuel charge, which based on $3.00 gas is $0.06/mcf for a total of $0.66/mcf net profit.  The contract calls for initial 4000 MMCFPD to start and is expected to increase to 12,000 MMCFPD within the first 10 months.  The permits have cleared comment and it is expected that President George Bush will sign the permits within the month of March, 2002.

We believe that TIDE is poised to break out.  The Eagle Pass - Piedras Negras International Crossing revenues will be the beginning of a tremendous surge in revenues for TIDE.  The international bilateral pipeline crossing is expected to be operational in the early part of 2002.  Once the construction of the pipeline is completed it will position Tidelands Oil & Gas Corporation as a major transporter and processor of natural gas into Mexico.  The new pipeline will generate substantial revenues and coupled with a very low cost of operation will result in significant per share earnings which will be reflected in the operating results in the second quarter of 2002.

Projections for Eagle Pass - Piedras Negras Pipelines

Year 1

Year 2

Year 3

Year 4

Year 5

Total Revenue

$29,592,000

$48,384,000

$65,376,000

$75,069,000

$76,158,000

Total Expenses

$1,492,700

$1,641,970

$1,806,167

$1,986,783

$2,185,461

Net Revenue After Taxes

$13,859,580

$28,045,218

$38,141,900

$43,849,300

$44,383,523

Projected EPS

$0.53

$1.08

$1.47

$1.67

$1.71

 

This information only includes the projected results from one part of the Company.  There are several other projects underway including the El Paso/Juarez Project which is projected to provide revenues approximately two-thirds that of the Piedras Negras Pipeline.  Based only on projected EPS from the Piedras Negras Pipeline and using the P/E for the Oil & Gas Operations Industry, within the Energy Sector, of 13.36 we derive a 2002 target price, based on first year revenues, of $3.47.  This assumes that half of the projected revenues shown for Year 1 in the above chart are realized in 2002.  Using this same process we derive target prices for 2003 of $10.82, 2004 of $16.43, 2005 of $20.97 and 2006 of $22.58.  Based on these projections we give TIDE a STRONG BUY recommendation.

 

Note: To meet the suggested target prices, the Company would have to trade at approximately the Oil & Gas Operations  Industry multiples and the Company would have to achieve earnings and revenue estimates provided by management.  A divergence either up or down from the projections could materially affect the target prices.

Recent News
(all times are US Eastern)

Friday, Mar 8, 2002

Wednesday, Mar 6, 2002 Monday, Mar 4, 2002 Tuesday, Dec 11, 2001 Tuesday, Nov 13, 2001 Tuesday, Aug 14, 2001 Monday, May 21, 2001 Friday, May 18, 2001

 

SEC Filings

November 13, 2001 - Quarterly Report
August 14, 2001 - Quarterly Report
May 21, 2001 - Quarterly Report
May 18, 2001 - Annual Report

Report Hot Link - Current List of SEC Filings

Contact Information

Michael R. Ward, President
TOGCTIDE@AOL.COM
361-241-2244

Visit the Company Website at www.tidelandsoilandgas.com  

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