Filed pursuant to Rule 424(b)(3)
                                      Registration Statement File No. 333-135636


               PROSPECTUS SUPPLEMENT NO. 5 DATED DECEMBER 18, 2006
                     TO PROSPECTUS DATED SEPTEMBER 15, 2006

                                   22,629,143
                                  Common Shares

                         TIDELANDS OIL & GAS CORPORATION
                   1862 W. Bitters Rd., San Antonio, TX 78248

                      The Resale of Shares of Common Stock

This Prospectus  Supplement No. 5 supplements our Prospectus dated September 15,
2006, as supplemented  by Prospectus  Supplement No. 1 dated September 29, 2006,
Prospectus  Supplement No. 2 dated October 25, 2006, Prospectus Supplement dated
November 21, 2006 and  Prospectus  Supplement  No. 4 dated December 8, 2006. The
shares that are the subject of this  Prospectus  have been  registered to permit
their resale to the public by the selling  stockholders named in the Prospectus.
We are not selling any shares of common  stock in this  offering  and  therefore
will not  receive  any  proceeds  from  this  offering.  You  should  read  this
Prospectus  Supplement No. 5 together with Prospectus  Supplements  Nos. 1, 2, 3
and 4.

This Prospectus Supplement includes the following:

     o    Our  Current  Report on Form 8-K/A dated  December 8, 2006,  which was
          filed with the  Securities  and  Exchange  Commission  on December 18,
          2006.

THIS INVESTMENT  INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 5.

We may  amend  or  supplement  this  Prospectus  from  time to  time  by  filing
amendments or supplements as required. You should read the entire Prospectus and
any  amendments  or  supplements  carefully  before  you  make  your  investment
decision.

This Prospectus Supplement is incorporated by reference into the Prospectus, and
all terms used herein will have the meaning  assigned to them in the Prospectus.
See "Risk  Factors"  beginning on page 5 of the  accompanying  Prospectus  for a
description  of  certain  factors  that  should  be  considered  by  prospective
Investors.

Our shares of common  stock are quoted on the NASD  Over-the-Counter  Electronic
Bulletin Board under the symbol TIDE. These securities have not been approved or
disapproved by the Securities  and Exchange  Commission or any state  securities
commission  nor  has  the  Securities  and  Exchange  Commission  or  any  state
securities  commission  passed upon the accuracy or adequacy of the  Prospectus.
Any representation to the contrary is a criminal offense.

The date of this Prospectus Supplement is December 18, 2006.



                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 8-K/A


                CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                        Date of Report: December 8, 2006



                         TIDELANDS OIL & GAS CORPORATION
                         -------------------------------
             (Exact Name of registrant as specified in its Charter)




       Nevada                          0-29613                    66-0549380
----------------------           ------------------            ---------------
State of Incorporation           Commission File No.           I.R.S. Employer
                                                             Identification No.

1862 West Bitters Rd. San Antonio, TX                               78248
-----------------------------------------                      ---------------
(Address of principal executive offices)                         (Zip Code)



Registrant's telephone number,( 210 )  764  -   8642
                               -----  -----    ------



                     (Registrant's former name and address)




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 below:

[_]  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)
[_]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)
[_]  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17CFR 240-14d-2(b))
[_]  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240-13e-4(c))



Item 8.01   Other Events

Tidelands  Oil & Gas Corp.,  (the  "Company")  and Michael  Ward,  the Company's
former  President,  CEO and member of the board of directors,  have entered into
the formal  written  documentation  (the  "Agreement")  as  described in the 8-K
Current Report filed on December 11, 2006.

The  summary  of the key  terms of the  Agreement  are set  forth  below and are
qualified

     (1)  Mr.  Ward  has  agreed  to  execute  documents  as may  be  reasonably
          requested  by the Company to formalize  and finalize his  resignations
          from the Company and its subsidiaries.

     (2)  Mr.  Ward has agreed to repay the  following  obligations  owed to the
          Company, on, or before December 31, 2006:

          (a)  The airplane note outstanding  principal and all accrued interest
               to the date of the  payment.  The total amount due as of December
               15, 2006 is $286,810.36.

          (b)  The stock  subscription  amended  promissory note dated September
               15, 2005 in the original principal amount of $110,000.  The total
               amount due as of December 15, 2006 is $122,375.

          (c)  Other  amounts  due to the Company  for unpaid  expense  advances
               totaling $428.55.

     (3)  Mr. Ward will bring  current and assume all Company  obligations  with
          regard to the SBC Center Terrace Suite License  Agreement  between the
          Company and the San Antonio Spurs, LLC dated June 1, 2004 (the "Skybox
          Agreement").  The Company agrees to assign all of its rights under the
          Skybox Agreement to Mr. Ward. The parties acknowledged that the Skybox
          Agreement  is  assignable  only with the  consent  of the San  Antonio
          Spurs,  LLC.  Mr.  Ward  will  use his  best  efforts  to  obtain  the
          assignment  with a full  release of the Company  from its  obligations
          under the  Skybox  Agreement.  If Mr.  Ward is unable to obtain a full
          release of the  Company  from the Skybox  Agreement,  then the Company
          assignment of the Skybox Agreement will contain a security interest in
          favor of the Company  giving it the right to retake  possession of the
          premises.

     (4)  The Company will issue Mr. Ward Five Hundred  (500,000) Company common
          shares under the terms of his Employment Agreement.  The stock will be
          subject to a security  interest  in favor of the Company to secure the
          assignment  of the Skybox  Agreement.  If the Skybox  Agreement is not
          assigned to Mr. Ward on, or before  December  31,  2006,  these shares
          will be returned to the Company.

     (5)  The  Company   will  pay  Mr.  Ward  the  total  sum  of   $134,415.72
          representing  six (6) months salary,  plus COBRA payments for the same
          period of time,  commencing January 1, 2007 according to the Company's
          payroll  schedule.  In the event, that Mr. Ward is unable to secure an
          assignment of the Skybox  Agreement on, or before January 31, 2007, as
          contemplated  by the  Agreement,  the salary and COBRA payments may be
          suspended  by  the  Company  until  the  contemplated   assignment  is
          completed.

     (6)  The Company granted Mr. Ward a two-year right of first refusal to meet
          or exceed any offer by a third party which is  acceptable to the board
          of  directors,  and if  required,  by  law,  the  bylaws  and,  or the
          shareholders,  for the purchase of Sonterra Energy Corporation and, or
          Tidelands Exploration and Production, Inc. subsidiaries.



     (7)  The Company will entertain an offer,  which may be made by Mr. Ward or
          an investor group to acquire Sonterra Energy Corporation and Tidelands
          Exploration & Production,  Inc.  subsidiaries.  The Company will grant
          Mr. Ward a two year first right of refusal to meet or exceed any offer
          from a third party for either or both of these subsidiaries.

Qualification of Contents of the Agreement Summary:
---------------------------------------------------

     The foregoing  paragraphs contain a limited summary of the key terms of the
Agreement.  The summary is qualified in its entirety by the terms and conditions
of the Agreement which has been attached to this Current Report as Exhibit 10.

Item 9.01   Financial Statements and Exhibits

Exhibit No.    Description

10             Agreement  between  Tidelands Oil & Gas  Corporation  and Michael
               Ward dated December 8, 2006

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
Dated: December 18, 2006


                                                 /s/ James B. Smith
                                                 -------------------------------
                                                 By: James B. Smith
                                                 Title: President, CEO










Exhibit 10


                                    AGREEMENT

     This agreement (the  "Agreement") is made to be effective as of the 8th day
of December,  2006, by and between  Tidelands Oil & Gas Corporation,  ("TIDE") a
Texas corporation having its principal office at 1862 Bitters Road, Building No.
1, San  Antonio,  Bexar  County,  Texas  78248,  and Michael  Ward,  ("WARD") an
individual  residing at _________(1),  San Antonio,  Bexar County,  Texas 78216.
TIDE and WARD are collectively referred to herein as the "Parties."

                                    RECITALS

     WHEREAS,  WARD has served as a Director of, and as the  President and Chief
Executive Officer of TIDE;

     WHEREAS,  a  material  disagreement  exists  between  WARD  and  the  other
Directors of TIDE regarding the current financial and operational  governance of
the company and the future direction of TIDE;

     WHEREAS, as of the date of this Agreement,  WARD has resigned as a director
and officer of TIDE and has further resigned from all manager,  director, and/or
officer  positions  of all  subsidiaries  of  TIDE  based  upon  the  previously
described disagreement; and,

     WHEREAS,  the Parties desire to resolve all remaining  matters between them
in an amicable  fashion and to finalize WARD's  separation from TIDE in a manner
which is as beneficial to each of the Parties as is possible.

                                    AGREEMENT

     NOW,  THEREFORE,  in  consideration of the foregoing  recitals,  the mutual
promises  and   payments   described   herein,   and  other  good  and  valuable
consideration,  the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

                              I. WARD'S OBLIGATIONS

A. Resignations.  WARD, as of the effective date of this Agreement, has resigned
as a  director  and  officer of  Tidelands  Oil & Gas  Corporation  and from all
manager,  director,  and officer positions of its  subsidiaries.  WARD agrees to
execute such other and further  documents as may reasonably be requested by TIDE
to formalize and finalize such resignations.

B. Repayment of Obligations.  WARD agrees,  to pay back all obligations  owed by
Ward to the Corporation on the terms set forth herein, including but not limited
to the following:

     1. Airplane  Note.  WARD agrees to pay in full,  on or before  December 31,
2006,  the  outstanding  principal and all interest  accrued to the date of such
payment in full,  on that  Promissory  Note dated  January 29,  2004.  The total
amount due on this  obligation  at December 15, 2006 is  $286,810.36  with a per
diem interest charge of $38.88 for each day after December 15, 2006 until paid.

     2.  Stock  Subscription  Agreement.  Ward  agrees  to pay,  in  full,  upon
execution hereof, all principal and accrued and unpaid interest due and owing on
that First  Amended  Promissory  Note dated  September  14, 2005 in the original
principal amount of $110,000.00  bearing interest at 5%. The total amount due as
of December 15, 2006 is $122,375.00.

     3. Other  Amounts.  Upon execution  hereof,  WARD shall pay TIDE the sum of
$428.55 for unpaid expenses advances from the Company.



C.  Assumption of SBC Center  Terrace Suite  License  Agreement.  WARD agrees to
bring current and assume all  obligations  of TIDE under that certain SBC Center
Terrace Suite License  Agreement  between TIDE and San Antonio Spurs,  LLC dated
June 1, 2004 (the "Skybox  Agreement").  TIDE agrees to assign all of its rights
under the Skybox Agreement to Ward.

     1. The Parties  acknowledge  that the Skybox  Agreement is assignable  only
with the consent of the San Antonio  Spurs,  LLC. WARD will use his best efforts
to obtain such an  assignment  and a full  release of TIDE from all  obligations
under the Skybox  Agreement.  WARD  further  agrees to provide  the San  Antonio
Spurs,  LLC with such  financial  and  other  information  as it may  reasonably
request for the approval of such  assignment and release of TIDE. TIDE agrees to
cooperate with WARD in obtaining the assignment of the Skybox Agreement.

     2. If WARD is  unable  to obtain a full  release  of TIDE  from the  Skybox
Agreement,  then the assignment of the Skybox Agreement shall contain a security
interest  in  favor of  TIDE,  giving  TIDE  the  right  to  immediately  retake
possession  of the  skybox  which is the  subject of the  Skybox  Agreement  and
receive any and all benefits relating thereto (e.g. tickets, etc.).

     3. If WARD is  unable  to obtain an  assignment  of the  Skybox  Agreement,
within thirty (30) days from the effective date of this  agreement,  then TIDE's
obligations under section II.B shall immediately cease.

D. Cooperation  Regarding Filings.  WARD agrees to cooperate with TIDE regarding
the  filing of any and all  necessary  governmental  or  regulatory  disclosures
related to his resignation as described above.

                             II. TIDE'S OBLIGATIONS

A. TIDE shall issue WARD  500,000  shares of TIDE stock upon  execution  hereof.
Such stock issuance  shall be deemed to have  fulfilled all  obligations of TIDE
with regard to section 3.2 of WARD's employment  agreement with TIDE. Such stock
issuance shall be subject to a security  interest in favor of TIDE to secure the
assignment of the Skybox Agreement as contemplated above. Such security interest
will be documented in the form of an  irrevocable  stock power allowing James B.
Smith,  as President of TIDE,  the power to transfer such shares back to TIDE if
the  assignment of the Skybox  Agreement is not completed on or before  December
31, 2006.

B. TIDE  shall pay WARD the  total sum of  $134,415.72  being the sum of six (6)
months  salary,  plus COBRA  payments  for the same  period of time,  commencing
January 1, 2007  according to TIDE's  payroll  schedule in affect on December 1,
2006.  In the  event  WARD is  unable to  secure  an  assignment  of the  Skybox
Agreement as contemplated  herein by January 31, 2007, these salary payments and
COBRA payments, may be suspended by TIDE until such time as an assignment of the
Skybox Agreement has been secured as contemplated herein.

C. TIDE hereby grants WARD a right of first refusal, which shall commence on the
date hereof and continue for a period of two years thereafter, to meet or exceed
any offer by a third party which is acceptable to the Board of Directors (and if
required  by law or by the  bylaws of TIDE,  the  shareholders)  of TIDE for the
purchase of its Sonterra Energy  Corporation  and/or  Tidelands  Exploration and
Production,  Inc.  subsidiaries (the "Subsidiaries")  according to the following
terms:



     1. Should  TIDE obtain a firm offer from a third party for the  purchase of
either or both of the  Subsidiaries,  TIDE shall  communicate  the terms of such
offer to WARD in writing, subject to any confidentiality restrictions imposed by
the third party making such offer.

     2. TIDE agrees to cooperate with WARD and allow WARD access to information,
subject  to a  confidentiality  agreement,  to allow  WARD and his  advisors  to
formulate any such offer.

     3. WARD  shall then have a period of fifteen  (15)  calendar  days from his
receipt of the terms of such offer to  formulate an offer which meets or exceeds
the offer of the third  party.  If such offer meets or exceeds  such third party
offer, then TIDE shall,  subject to legal  restrictions,  be obligated to accept
WARD's offer.

     4.  Nothing   herein  shall   obligate  TIDE  to  solicit  offers  for  the
Subsidiaries or either of them, nor to sell the  Subsidiaries or either of them.
Likewise, nothing herein shall obligated WARD to purchase, nor to make any offer
for the purchase of the Subsidiaries or either of them.

                             III. MUTUAL OBLIGATIONS

A.  Dispute  Resolution.  In order to  facilitate  an efficient  and  economical
resolution  of any disputed  matter  arising under this  Agreement,  the Parties
agree to make a good  faith  effort  to  resolve  any  dispute  related  to this
Agreement  that may arise between the Parties in  accordance  with the following
procedures:

     1. Negotiation.  In the event a dispute arises, the complaining party shall
give the other party written notice of such dispute.  Within ten (10) days after
receipt of said notice, the Parties shall meet at a mutually acceptable time and
place, and, thereafter, as often as reasonably deemed necessary,  shall exchange
relevant information and attempt to resolve the dispute.

     2.  Mediation.  If the dispute  cannot be resolved  by  negotiation  within
thirty (30) days after  notice,  or if the Parties  fail to meet within ten (10)
days, the dispute shall be submitted to mediation before resorting to litigation
or any other dispute resolution  mechanism.  Submission to mediation may be made
by either party by written notification to the other party.

     A mediator  shall be selected by agreement  of the Parties  within five (5)
days of notification of the need for mediation.  Together with the mediator, the
Parties  shall agree on a mutually  convenient  time for the  mediation.  If the
Parties are not able to agree on a mediator,  the Bexar  County  Texas  District
Judge who coordinates  alternative dispute resolution matters at such time shall
pick a mediator from his or her Approved  List of  Mediators.  Together with the
mediator selected,  the Parties shall promptly  designate a mutually  convenient
time and place for the mediation,  which shall take place within forty five (45)
days after selection of the mediator. If the Parties do not agree promptly, then
the mediator shall determine the time and place.

     3. Post  Mediation  Procedures.  The Parties will use their best efforts to
resolve such dispute by first  mediating the dispute in good faith,  and second,
by using such other alternative dispute resolution procedures as may be selected
by the agreement of the Parties, if any, prior to resorting to litigation.

B. Governing Law. This agreement shall be construed according to the laws of the
State of Texas. Any action brought under this Agreement,  or which is related to
this Agreement shall be brought in Bexar County, Texas.



C.  Assignment.  Neither party may assign this Agreement  without the consent of
the other party.  However,  TIDE  acknowledges that WARD may assign his right of
first  refusal to purchase the  Subsidiaries,  or either of them, to an investor
group or entity owned or controlled by WARD.

D.  Amendments/Modifications.  This  Agreement  may not be amended  or  modified
except in a writing signed by both WARD and TIDE.

E. Waiver.  The waiver by either party of a breach or violation of any provision
of this  Agreement  shall not operate as or be  construed  to be a waiver of any
subsequent  breach  hereof.  No waiver  will be  effective  unless  set forth in
writing  and  signed  by the  party  waiving  such  provision  or breach of this
Agreement.

F.  Notices.  Any notice given under this  Agreement  shall be  sufficient if in
writing and mailed,  by either  registered  or certified  mail,  return  receipt
requested,  postage  prepaid,  to a  party  at  the  address  set  forth  in the
introduction to this Agreement.

G. Severability. In the event any provision contained herein is determined to be
invalid,  illegal or unenforceable under present or future laws effective during
the term hereof,  such provision shall be fully severable;  this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never  comprised a part hereof;  and the remaining  provisions  hereof shall
remain in full  force and  effect  and shall  not be  affected  by the  illegal,
invalid or  unenforceable  provision or by its severance  there from. In lieu of
such  illegal,   invalid  or  unenforceable   provision  there  shall  be  added
automatically  as a part hereof a provision as similar in terms to such illegal,
invalid or  unenforceable  provision as may be possible and be legal,  valid and
enforceable.

H. Headings. The captions,  headings and arrangements used in this Agreement are
for  convenience  only  and do not  affect,  limit  or  amplify  the  terms  and
provisions hereof.

I.  Confidentiality.  TIDE and TIDE's attorneys or representatives  and WARD and
WARD's  attorneys  or  representatives  agree that all of the terms and  amounts
included in this Agreement are and forever shall be kept completely confidential
and at no time are TIDE or TIDE's attorneys or  representatives  and/or WARD and
WARD's attorney's or representatives to mention, state or otherwise infer to the
terms and conditions or any details of this Agreement,  except to the extent, if
any,  disclosure  is required by law or  regulatory  authority or to enforce the
terms hereof.

J. Entire Agreement.  This Agreement contains the entire understanding among the
Parties   concerning  the  subject  matter  contained   herein.   There  are  no
representations,  agreements,  arrangements or understandings,  oral or written,
among or between the  parties  hereto,  relating  to the subject  matter of this
Agreement, which are not fully expressed herein.



/s/ Michael Ward
----------------
Michael Ward



Tidelands Oil & Gas Corporation


By:/s/ James B. Smith
   ----------------------
James B. Smith, President


1 Street number and name has been omitted for privacy purposes.