SecProbe.io

CORRESP
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United States

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C.  20549-0405

Attn: H. Roger Schwall

VIA EDGAR filing

May 9, 2005

Re:          TEL Offshore Trust

Form 10-K filed March 31, 2005

File No. 0-06920

Dear Mr. Schwall:

TEL Offshore
Trust is responding to your letter dated May 2, 2005. We respond to each
of the comments as follows:

Note 9 – Supplemental Reserve Information, page 50

1.             Please expand this footnote to include all of the
disclosure requirements of FAS 69.  Refer
to the requirements of paragraphs 7 and 8 of that standard.

Pursuant
to Staff Accounting Bulletin No. 47 (September 16, 1982), royalty
trusts are permitted in filings with the Commission to file statements of
distributable income reflecting amounts to be distributed for the period in
question under the terms of the applicable trust agreement in lieu of a
statement of income prepared under generally accepted accounting principles.

As disclosed in Note 3 to the financial statements in the Form 10-K,
the financial statements of the Trust are prepared on the following basis:

(a)           Royalty
income is recorded when received, including the effect of overtaken or
undertaken positions and negative or positive adjustments, by the Corporate
Trustee on the last business day of each calendar quarter; and

(b)           Trust
general and administrative expenses are recorded when paid, except for the cash
reserved for future general and administrative expenses.

This manner of
reporting income and expenses is considered to be the most meaningful because
the quarterly distributions to Unit holders are based on net cash receipts
received from the Working Interest Owners. The financial statements of the
Trust differ from financial statements prepared in accordance with generally
accepted accounting principles, because, under such principles, Royalty income
and Trust general and administrative expenses for a quarter would be recognized
on an accrual basis. In addition, amortization of the net overriding royalty
interest, calculated on a units-of-production basis, is charged directly to
Trust corpus since such amount does not affect distributable income.

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This method of accounting is also called for at Staff Accounting Bulletin Topic 12: Oil and Gas
Producing Activities - E. Financial Statements of Royalty Trusts and
represents a comprehensive basis of accounting other than Accounting Principals
Generally Accepted in the United States of America.

Paragraph 1 of FAS 69 states, “This Statement amends FASB Statement No. 19,
Financial Accounting and Reporting by Oil and Gas
Producing Companies, by establishing disclosures about oil and gas
producing activities to be made for publicly traded enterprises when presenting
a complete set of annual financial statements.(3)”

FAS69,
Footnote 3, as amended states – “FASB Statement No. 24, Reporting Segment
Information in Financial Statements That Are Presented in Another Enterprise’s
Financial Report, refers to a complete set of financial statements as “a set of
financial statements (including necessary footnotes) that present financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles” (footnote 2).”

The Corporate Trustee believes based on its reading of paragraph 1 of
FAS 69 that these disclosures are not required since the financial statements
are not presented in conformity with generally accepted accounting
principles.  The Trust financial
statements do disclose the items that the Corporate Trustee believes are most
relevant to the users of the financial statement, mainly future net revenues
and the basis for which it was presented.

2.             Expand your disclosures to explain why your reserve
information is provided as of October 1, 2004, rather than at December 31,
2004, as is required by FAS 69, paragraph 10.

As disclosed in Note 4 to the financial statements, the amounts
distributed are determined on a quarterly basis and are payable to Unit holders
of record as of the last business day of each calendar quarter. However, cash
distributions are made in January, April, July and October and
include interest earned from the quarterly record date to the date of
distribution.

The reserve information is prepared as of October 31st to in order
to correspond with distributions to the Trust.
This information is disclosed in the Form 10-K under Item 1. “Business
– Termination of the Trust.”  The Trust
also reports production information in a consistent manner, with amounts
reported representing actual production for the twelve month-period ending on October 31
of each year.  Quarterly reports as of
the end of March, June and September similarly reflect actual
production for the three months ending at the end of January, April and July of
each year.  We further note that the
Trust has used this method of reporting for at least 15 years, and most likely
since its inception effective January 1, 1983.

We propose to add the following disclosure in Item 1 and in the
footnotes to financial statements in future filings when discussing future net
revenues substantially as follows:

Estimates of
the proved oil and gas reserves attributable to the Partnership’s royalty
interest are based on existing economic and operating conditions in effect at October 31
in order to correspond with distributions to the Trust.

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3.             We note the limitations included in your evaluation of
disclosure controls and procedures.  It
is not appropriate to conclude that your disclosure controls and procedures are
effective while noting certain limitations.
Please remove the limiting statements.
It may be appropriate to indicate that you place reliance upon the
certifications of disclosure controls and procedures from your working interest
partners.  If this is the case, you must
also indicate the accommodations you have made for not having control over the
information provided to you from the working interest owners.

TEL Offshore
Trust is a royalty trust.  The unique
nature of royalty trusts, and their status between normal corporate registrants
and Asset-Backed Issuers, was acknowledged by the Staff in No-Action, Interpretive and/or Exemptive Letter: Bank
of America, N.A. dated November 13, 2002.  In this letter, the Staff considered, among
other things, the pass-through nature of royalty trusts and the fact that the
trustee must rely in certain circumstances on information provided by the
working interest owners of the underlying properties and managing general
partners of partnerships underlying the trusts.
In this letter, the Staff concluded in a treatment similar to
Asset-Backed Issuers that “it is the view of the Division that royalty trusts
do not need to provide the disclosure required by Item 307 of Regulation S-K.”  For the reasons outlined in the 2002
Exemptive Letter, we believe royalty trusts remain a special case under
Sarbanes-Oxley related rules drafted for corporate issuers.

The Corporate
Trustee of the Trust believes it has established effective disclosure controls
and procedures to request and obtain information in a timely manner from the
managing general partner, ChevronTexaco, and the working interest owners.  However, under agreements entered into before
Sarbanes-Oxley, the Corporate Trustee does not have direct access to this information
and cannot guarantee or represent the quality of information received from
third parties.  We understand that the
certification requirements and disclosure controls and procedures requirements
do not extend to third parties who do not control a reporting person.  Based on these facts, the Corporate Trustee
cannot make representations concerning either disclosure controls and
procedures or internal control over financial reporting of these third parties
regarding operations affecting royalty income payable to the Trust.

The Corporate
Trustee has received timely reports and other information relevant both (1) for
determining royalty income payable to the Trust and (2) for disclosure
regarding information about the performance of underlying assets generating
this income.  This information, which is
disclosed as part of the Trust’s MD&A disclosure when material, has been
revised in the past by the working interest owners.  These historical adjustments have not
required any restatement of royalty income and distributable income, the
financial measures reported by the Trust in the Trust’s financial statements,
reported for prior periods.  Since the
Trust is a cash-based issuer, the adjustments only affect royalty income
reported in periods in which the adjustments are reported and recorded by the
working interest owners.  Thus, the
Corporate Trustee’s disclosure controls and procedures for the Trust may be,
and in fact have been, effective to disclose all required material information
based on information provided to the Corporate Trustee by third parties, in
spite of errors by the working interest owners in reporting information about
underlying operations.  As these errors
have been reported to the Corporate Trustee, the Corporate Trustee has
disclosed material adjustments and their effect on royalty income during the
period in which the adjustments are recorded.
In addition, the Corporate Trustee has

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discussed the
causes of the errors with the managing general partner or working interest
owners, and has requested changes to be made by the third parties to avoid
future errors, again both (1) in the interest of making timely
distributions of royalty income to the Trust in accordance with contractual
obligations and (2) to improve the disclosure controls and procedures
maintained by the Corporate Trustee.

In the Form 10-K,
the Corporate Trustee has concluded that its disclosure controls and procedures
with respect to the Trust are effective with respect to all matters under its
control.  The limitations set forth do
not affect disclosure controls and procedures maintained by and under the
control of the Corporate Trustee.  The
additional disclosures under Item 9A set forth factually accurate statements
regarding the information received by, and under the control of, the Corporate
Trustee.  The disclosures in Item 9A are
stated for the benefit of investors who may not otherwise read the underlying
Trust documents.  The disclosures are
necessary to make the other required statements in this section not
misleading, and to further clarify the scope of the Corporate Trustee’s
contractual and legal control and duties.

As you have
urged in your letter, we believe the current Item 9A information indicates
actual risks and errors that investors require for an informed investment
decision.  The Corporate Trustee believes
that the omission of this information, which is also discussed under “Risk
Factors” in the Form 10-K, would be materially misleading.  This information highlights for investors
that royalty trusts (1) are not similar to corporate issuers for purposes
of disclosure controls and procedures and (2) are subject to differences
that may impact reports on underlying activities, notwithstanding effective
disclosure controls and procedures by the Corporate Trustee evaluated and
disclosed under Item 9A or the related Section 302 certification.

Based on the
foregoing reasons, the Corporate Trustee respectfully submits that it believes
the current information in Item 9A is appropriate, accurate and complete in all
material respects.  For the avoidance of
any confusion, however, the Trust proposes to revise its Item 9A language in
future filings to reference “noting its reliance on information from third
parties and scope of disclosure controls and procedures” instead of “noting
certain limitations on disclosure controls and procedures.” Similarly, rather
than summarizing "contractual limitations creating potential weaknesses in
disclosure controls and procedures," the Trust will instead refer to
"contractual limitations and reliance that may undermine otherwise
effective disclosure controls and procedures."

General

In connection
with responding to your comments, the Trust acknowledges that: (1) the
Trust is responsible for the adequacy and accuracy of the disclosures in the
filing; (2) staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action with respect to
the filing; and (3) the Trust may not assert staff comments as a defense
in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

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  Sincerely
  yours,

  TEL OFFSHORE TRUST

  By: JPMorgan Chase Bank, N.A.,

  as Corporate Trustee

  By:

  /s/ Mike Ulrich

  Mike Ulrich,
  Vice President and Trust Officer

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