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Edgar Filing: TIDELANDS OIL & GAS CORP/WA - Form 10-K - page 18 / 83

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Edgar Filing: TIDELANDS OIL & GAS CORP/WA

  • -

    Form 10-K

approximat respect to could be u feedstock the near f to constr natural ga U.S.-Mexic and operat Tidelands

ely

80

miles

of

pipeline.

No

significant

encumb

the assets of this

company.

The pipeline is curre

sed

to

transport

natural

gas

from

third

party

pr

for the Chittim Gas uture, we expect to

Processing sell these

Plant owned by Rio Br

assets.

Sonora

Pipel

uct,

own and operate

s

pipelines

in

Hidalgo

approximately

County,

Texas

33 miles of

which

will

th i

  • o

    border with the pipeline

ed by Terranova Energia, Oil & Gas Corporation.

and storage assets S. de R.L. de C.V,

to be anoth

rances ntly

exist with inactive and

oducers

to

supply

avo ine

Energy LLC. In LLC also plans

irty

inch

diameter

nterconnect

at

the

constructed,

owned

er

subsidiary

of

  • -

    15-

Sonterra Energy Corpo propane to 15 resi distribution system 75,000 feet of yard l of 156,000 gallons distribution system f a rural subdivision l

ration dential

operates a propane

subdivisions

in

distribution

systems providing

Austin,

Texas.

The

propane

is

comprised of

ines,

850

meters

approximately

25 miles

and

storage

tanks

with

a

of gas main pipe, combined capacity

of LPG.

Sonterra

is

currently

constructing

a

propane

or approximately 200 residential ocated in Kendall County, Texas.

units

in

Cordillera

Ranch,

We lease our San Anto August 1, 2003. The t the building under t 1, 2006 for a term un Our rent expense for a sublease agreement month until its ren $3,000 per month thro Energy Corporation en of $3,300 per month f for this office for 2

nio

executive office. We entered into this office lease on

erm expired he month to

November 30, 2005. We held over our tenancy in month clause and renewed this lease on February

til December 31, 2007. Our monthly

2005

was

$40,800.

Sonterra

Energy

lease payment is $3,400. Corporation entered into

for its

offices in

ewal

in

October

2005

ugh

March

31,

2006.

an at

adjacent building which time the rent

However,

on

February

1,

for $2,500 per increased to 2006, Sonterra

tered into a direct lease or a term ending December 005 was $31,500.

with the building owner at a rent 31, 2007. Sonterra's rent expense

ITEM 3.

LEGAL

PROCEEDINGS

---------------------------

Matter No. 1:

On January 6,

2003,

we were

served as a third

party

defendant

in a lawsuit

titled Northern Gas Corporation,

Natural Gas Company vs. Betty Lou Sheerin vs.

ZG

Gathering,

Ltd.

and

Ken

Lay,

in

the

150th

Tidelands Oil &

Judicial

District

Court, Bexar County, Texas, Cause Number 2002-C1 initiated by Northern Natural Gas when it sued Betty L

  • -

    16421. The lawsuit was

ou Sheerin for her failure

to make

principal

payments on a note she

amount

of

$1,950,000.

executed payable to Northern's suit was f

Northern in the iled on November

original 13, 2002.

Sheerin

answered

generally

denied

Northern's Northern's

2003. Sheerin's answer affirmative defenses of

lawsuit

on

January 6,

claims

and

raised the

fraudulent the note instrument. on the note Gathering, Gathering, Northern ha included a entered in Gathering L

all all

of the obliga

question. order to mediation answered

a

t

inducement

by Northern,

estopp

does not

comport

with

the

Sheerin seeks a judicial rulin . Sheerin's answer included and Ken Lay generally alleging,

Ltd. and Ken Lay,

fraudulentl

s filed a general third party cross

denial of She claim against

to an agreement td. and that, as

to purchase a part of the

obligations due and owing to tions she had to Northern Tidelands and Sheerin agreed

No o to

llow

time

for

mediation

of

t

on

March 11, 2003.

The case

wa

he

Sheerin suit on

March 26,

20

el, waiver legal requi g that North a countercla among other y induced h erin's count Tidelands. the Zavala agreement, T rthern, the n the $1,95 delay the he case. T s not settle

03.

Tidelan

and the

further

claim that

rements

of a

negotiable

ern im

be denied any recovery

against

Northern,

ZG

things, that

Northern, ZG

er

execution

of the note.

erclaims.

Sheerin's

answer

She

alleges

that

Tidelands

Gathering System from ZG idelands agreed to satisfy

reby

relieving Sheerin

0,000 promissory Tidelands' answer

note date

idelands

participated

of in in in

d at ds'

that time.

Tidelands

answer

denies

all

of

18

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