tide-8k442008.htm
UNITED
STATES
SECURITIES
EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): March 25,
2008
TIDELANDS
OIL & GAS CORPORATION
(Exact
name of registrant as specified in its charter)
|
Nevada
|
|
000-29613
|
|
66-0549380
|
|
(State
of organization)
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
|
1862
West Bitters Rd.
San
Antonio, TX
|
78248
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
Telephone Number, including area code: (210) 764
- 8642
Former
name or former address, if changed since last report:
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
|
|
|
|
o
|
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
|
|
|
o
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|
|
|
|
|
|
o
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
|
|
|
|
|
|
o
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
|
ITEM
1.01 Entry into a Material Definitive Agreement
On March
25, 2008, Reef Ventures, L.P. (“Reef Ventures”), a subsidiary of
Tidelands Oil & Gas Corporation (the “Company”), entered into and
consummated a Purchase and Sale Agreement (the “Purchase and Sale Agreement”)
with West Texas Gas, Inc. (“WTG”) for the sale of all of the issued and
outstanding membership interests of Reef International, L.L.C. (“Reef
International”) and Reef Marketing, L.L.C. (“Reef Marketing”, and collectively
with Reef Ventures and Reef International, the “Reef Entities”), both of which
were wholly-owned subsidiaries of Reef Ventures, and all the assets of the Reef
Entities, which consist of assets related to the “River Crossing Project”, the
“Carrizo Springs Pipeline System”, the “Peña Creek Gathering System” and the
“Chittim Gas Plant” and are generally described as follows (the membership
interests and the assets are collectively referred to as the
“Assets”):
|
·
|
The
River Crossing Project consists (a) 8.3 miles of 12” natural gas pipeline,
4.25 miles of 6” steel pipeline, and related meter stations and facilities
located in Maverick County, Texas; (b) interests in real property,
including easements, rights-of-way, surface leases; and (c)
permits.
|
|
·
|
The
Carrizo Springs Pipeline System consists of (a) approximately 16.6 miles
of 8” pipeline, 17.0 miles of 6” pipeline, 10.1 miles of 4” pipeline, and
7.6 miles of 3” pipeline, and related facilities, located in Dimmit and
Zavala Counties, Texas; (b) interests in real property, including
easements, rights-of-way surface leases; and (c)
permits.
|
|
·
|
The
Peña Creek Gathering System is located in Maverick, Dimmit and Zavala
Counties, Texas, and consists of: (a) approximately 13.6 miles of 4”
pipeline beginning at the Chittim Gas Plant in Maverick County, Texas and
ending in Dimmit County, Texas; and related facilities; (b) interests in
real property, including easements and rights-of-way; and (c)
permits.
|
|
·
|
The
Chittim Gas Plant is located in Maverick County, Texas, and consists of:
(a) a natural gas processing plant; (b) interests in real property,
including a surface lease; and (c)
permits.
|
The total
purchase price for the Assets, after adjustments required by the Purchase and
Sale Agreement, was $2,484,265 (the “Purchase Price”).
“The Company caused Reef
Ventures to deliver $2,436,825 of the Purchase Price to Impact International,
L.L.C. (“Impact”) on behalf of the Company, as partial repayment of the
outstanding principal and interest of a promissory note made by the Company to
Impact dated May 25, 2004, in the original principal amount of $6,523,773.30
(the “Note”). The Company repaid the remainder of the outstanding
principal and interest on the Note by issuing 39,890,180 shares (the “New
Shares”) of the Company’s common stock to Impact upon the closing of the
transactions contemplated by the Purchase and Sale Agreement. The
remaining $47,440 of the Purchase Price received by Reef Ventures was used to
pay legal fees associated with the transaction and for working capital
purposes.
Concurrent
with the issuance of the New Shares to Impact, the Company entered into
a Registration Rights Agreement (the “Registration Rights Agreement”)
with Impact with respect to the New Shares, the 8,812,980 shares of the
Company’s common stock owned by Impact prior to the issuance of the Shares (the
“Prior Shares”, and collectively with the New Shares, the “Shares”), and any
other securities issued or issuable at any time or from time to time in respect
of the Shares upon a stock split, stock dividend, recapitalization or other
similar event involving the Company. The Registration Rights Agreement
gives Impact the right to “piggyback” on a public offering of the Company’s
securities (i) except any registration statement registering the Company’s
common stock on Form S-4 or S-8 and (ii) excluding any Shares that are not
eligible to be resold pursuant to the registration statement filed by the
Company.
The
additional disclosure set forth below under Item 1.02 is hereby incorporated by
reference herein.
ITEM
1.02 Termination of a Material Definitive Agreement
Concurrent
with the transaction reported in Item 1.01 above, Impact and Ramiiilaj, a
Limited Partnership (“Ramiiilaj”), an affiliate of Impact which may have become
vested with the rights of Impact under the Note and the other 2004 Transaction
Documents (as defined below), entered into a General Release (the “General
Release”) with the Company, Reef Ventures, and Arrecefe Management, LLC, a
wholly-owned subsidiary of the Company and the general partner of Reef Ventures
(“Arrecefe”), in which Impact and Ramiiilaj agreed to terminate all obligations
and liabilities, if any, of the Company, Arrecefe and Reef Ventures and their
affiliates and representatives under the Note; the Purchase and Sale Agreement
dated May 25, 2004, by and among Impact, the Company, Arrecefe and Coahuila
Pipeline, LLC, an affiliate of Impact (the “May 25th PSA”); the Guaranty dated
May 25, 2004, made by Reef Ventures in favor of Impact; the Deed of Trust,
Mortgage, Security Agreement, Financing Statement and Assignment between Reef
Ventures and Impact dated May 25, 2004 (the “Deed of Trust”); the Pledge
Agreement between Reef Ventures and Impact dated May 25, 2004 (the “Pledge
Agreement”); the Stock Purchase Warrant between the Company and Impact dated
April 16, 2003, as amended by the First Amendment to Stock Purchase Warrant
between Tidelands and Impact, dated May 25, 2004 (the “Stock Purchase Warrant”);
the Registration Rights Agreement between the Company and Impact dated April 16,
2003, as amended by the First Amendment to Registration Rights Agreement, dated
May 25, 2004 (the “Registration Rights Agreement”); and all other agreements,
documents and instruments executed or delivered by any of the Company, Arrecefe
and Reef Ventures or their affiliates or representatives in connection therewith
(the “Related Documents”, and collectively with the Note, the May 25th PSA, the
Deed of Trust, the Pledge Agreement, the Stock Purchase Warrant and the
Registration Rights Agreement, the “2004 Transaction
Documents”). Impact, Ramiiilaj, the Company, Arrecefe and Reef
Ventures also agreed in the General Release to release and forever discharge
each other and their affiliates and representatives from all actions, causes of
action, obligations, costs, expenses, controversies and damages of any kind,
including but not limited to those related to the 2004 Transaction Documents,
but excluding any waiver of rights related to the enforcement of the General
Release.
Concurrent
with the execution and delivery of the Purchase and Sale Agreement, Impact and
Ramiiilaj executed and delivered to Reef Ventures a Release of Lien (the
“Release of Lien”) pursuant to which Impact and Ramiiilaj released and
discharged all liens on the assets and properties of Reef Ventures created under
the Deed of Trust to secure the repayment of the Note, and the Company and WTG
entered into a Non-Competition Agreement (the “Non-Competition Agreement”)
pursuant to which the Company agreed not to engage in any activity in
competition with the business of WTG in a fifty mile radius of Piedras Negras,
Coahuila, Mexico for a period of five years commencing on March 25,
2008.
The
foregoing summary of the terms of the Purchase and Sale Agreement, the
Registration Rights Agreement, the General Release, the Release of Lien and the
Non-Competition Agreement is qualified in its entirety by reference to the full
and complete terms of such agreements, which are attached hereto as Exhibits
10.1, 10.2, 10.3, 10.4 and 10.5.
ITEM
9.01 Financial Statements and Exhibits
The
following exhibits are to be filed as part of this 8-K:
|
EXHIBIT
NO.
|
IDENTIFICATION
OF EXHIBIT
|
|
10.1
|
Purchase
and Sale Agreement
|
|
10.2
|
Registration
Rights Agreement
|
|
10.5
|
Non-Competition
Agreement
|
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 hereunto duly authorized.
TIDELANDS
OIL & GAS CORPORATION
By: /s/ James B.
Smith
James B.
Smith, President & Chief Executive Officer
DATE: April 4,
2008
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
10.1
|
Purchase
and Sale Agreement
|
|
10.2
|
Registration
Rights Agreement
|
|
10.3
|
General
Release
|
|
10.4
|
Release
of Lien
|
|
10.5
|
Non-Competition
Agreement
|