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