Tidelands Files Permit for Natural Gas Storage Facility in Mexico

Tidelands Oil & Gas' wholly owned subsidiary, Terranova Energia, S. de R.L. de C.V., effective August 5, 2005, has filed for a permit with the CRE (Comision Reguladora De Energia de Mexico) for its proposed underground natural gas storage facility to be built and operated in the Brasil Field of the Burgos Basin near Reynosa, Tamaulipas, Mexico. The storage facility will be a porous sandstone reservoir bounded by impermeable rock layers and will exhibit a working capacity of 50 Bcf (billion cubic feet) while providing 500 MMcf/d (million cubic feet of gas per day) of peak deliverability. This storage facility will help satisfy demands for natural gas storage in Northeastern Mexico, which includes the industrial city of Monterrey.

The facility will play a key role as part of a broader project which encompasses plans for building and maintaining a hub of bi-directional pipelines, inclusive of the Terranova Oriente pipeline whose permit was filed with the CRE on March 18, 2005. These transmission pipelines will be capable of transporting natural gas from Texas into Mexico or vice versa. Additional plans include an offshore Regasification Terminal to be built in the Gulf of Mexico. Tidelands expects to file shortly for permits with the CRE for its proposed offshore Regasification Terminal.

Michael Ward, President and CEO of Tidelands Oil & Gas Corporation, stated, "The permitting process represents a significant milestone in Tidelands' continuing efforts to establish itself as a prominent contributor to Mexico's oil and gas infrastructure. We are confident that our preparatory efforts and meticulous scrutiny regarding the details of our projects will expedite the permitting process, and as always, remain focused on growing our Company and building shareholder value."