Biloxi Marsh Lands Corporation (Pink Sheets:BLMC) announces
results for the periods ending December 31, 2010 and provides
update. Total revenue for the year ending December 31, 2010 was
$7,069,909 compared to total revenue of $23,008,898 in 2009. The
annual revenue breakdown is as follows: 2010 revenue from oil and
gas activity was $7,030,933 compared to revenue of $22,041,872 in
2009. $5,205,463 in revenue categorized as Settlement Proceeds
emanate from the settlement of all cases involving disputed
ownership of water-bottoms between the Company and the State of
Louisiana. It should be noted that revenues received as the result
of the settlements are onetime, non-recurring revenue items. The
non-recurring settlement revenues were $5,205,463 in 2010 and
$24,215,176 in 2009. During 2010, total revenues included a
$764,019 loss emanating from the Gain (Loss) from Investment in
Partnership category which represents the Company's investment in
B&L Exploration, LLC (B&L). This compares to a loss of
$2,615,703 in the same category for the prior year. B&L was
able to expense Depreciation, Depletion, and Amortization. BLMC’s
share of these expenses was $733,934 for 2010 and $855,599 for
2009. Dividend and interest income for 2010 was $327,475, compared
to $362,442 for 2009. In 2010 we realized a cumulative gain from
the sale of investment securities of $218,149 compared to a
cumulative gain in the amount of $122,461 in 2009. Meanwhile,
expenses for the year totaled $1,649,451 compared to $2,139,318 for
the prior year. For the year, net earnings were $3,934,262 or $1.44
per share compared to $13,722,625 or $5.00 per share in 2009.
The Company previously announced that all cases involving
disputed water-bottoms between the Company and the State of
Louisiana had reached an amicable settlement. The settlement does
not involve resolving the issue of ownership of the disputed
water-bottoms, it simply involves the sharing of past and future
revenues emanating from each production unit which contained
disputed water-bottoms. The Company maintains its claim to all of
its titled acreage including any and all water-bottoms in dispute
and will take all legal actions to protect its title. These
settlement agreements have resulted in the dismissal of all
litigation between the settling parties. In accordance with the
settlement agreements, the Company received a onetime non-recurring
settlement payment of $5,205,463. Also, under the terms and
provisions of the settlement the Company and the State will share
future revenues from production emanating from the production units
which were the subject of the litigation.
The Meridian Resource Exploration, LLC recompleted the Biloxi
Marsh Lands 1-2 well which returned to production during July of
2010. This well is located on the Company’s property. Meanwhile,
B&L had three new wells placed on production during the year.
The SL 19061 #1 well located in St. Bernard Parish, Louisiana and
operated by B&L, was placed on production in January of 2010.
B&L has a 41.875% working interest in the SL 19061 #1. The
Delacroix #41ST and the SL 1212 #1 wells located in Point A La
Hache Field in Plaquemines Parish, Louisiana in which B&L has
non-operated working interests were placed on production during
2010. B&L has a 25% working interest in each of these wells
with the Delacroix #41ST being placed on production during February
and the SL 1212 #1 being placed on production during June of
2010.
As of December 31, 2010 the combined gross daily production rate
from 5 wells operated by the Company's mineral Lessees was
approximately 11.0 million cubic feet (mmcf) of natural gas with
net daily production accruing to the Company of approximately 1.6
mmcf. As of December 31, 2010, B&L’s net daily production was
approximately 3.0 million cubic feet of natural gas equivalents
(mmcfge) (15:1 oil to gas ratio) compared to approximately .782
mmcfge per day on December 31, 2009. Combining this daily
production with the Company's proportional share of the daily
production from the B&L wells makes the total net daily
production accruing to the Company as of December 31, 2010
approximately 4.02 mmcf per day compared to 1.3 mmcfge on December
31, 2009.
During the fourth quarter of 2010 B&L successfully drilled
and completed the Gautreaux #1 well located in Vermillion Parish,
Louisiana. This well was completed in the Planulina Reservoir “B”
sand. On October 31, 2010 during a twenty-four (24) hour flow test
the well flowed at a sustained rate of approximately 3.1 mmcfg per
day and approximately 20 bbls of oil per day with flowing tube
pressure averaging approximately 3,425 psi with little or no
pressure draw down. B&L is the current Operator of this well.
Production facilities are completed and flowlines constructed. We
are awaiting tie into an existing El Paso/Tennessee Gas sales
pipeline tap. We anticipate that this well should be placed on
production by the end of April 2011. B&L has a 41.875% working
interest in this well. Additionally, during the fourth quarter of
2010 B&L participated in non-operated working interest basis in
the LL&E #1 well located in Terrebonne Parish, Louisiana. On
November 8, 2010 electric logs were run indicating apparent pay
sands in 5 separate intervals. This well is operated by Gulf South
Operators Inc. and is currently being completed and fully
evaluated. We will provide updates on LL&E #1 well as they
become available. According to the Operator this well should be
place on production by June of 2011.
The end of the year proved reserve study commissioned by the
Company and completed by T. J. Smith & Company, Inc., an
independent reservoir engineer, estimates that as of December 31,
2010 the BLMC’s “Developed Producing” (PDP) reserves were 1.65
billion cubic feet (BCF) of natural gas and estimates that the
“Developed Non-Producing” (PDNP) reserves were .642 BCF, totaling
2.29 BCF of estimated proved natural gas reserves. This represents
an increase in our fee based land reserves of approximately .34
BCF. Additionally, this reserve study estimates that slightly more
than 25% of the proved reserves will deplete by the end of 2011. In
addition to the foregoing estimated proved reserves, another
reserve study completed by the same independent reservoir engineer
estimates that B&L’s proved reserves as of December 31, 2010
were 2.3 billion cubic feet (BCF) of natural gas and 25 thousand
barrels of oil (MBBL) compared to 2.2 BCF and 27 thousand barrels
of oil (MBBL) at the end of 2009. Based upon the Company’s
proportional ownership in the B&L wells, as of December 31,
2010 the portion of the estimated reserves allocated to the Company
was approximately 1.61 BCF of natural gas and 22.5 MBBL of oil.
Combining the Company’s portion of the proved reserves in both
studies makes the estimated proved reserves accruing to the Company
to approximately 3.7 BCF of natural gas and 22.5 MBBL of oil,
equating to approximately 4.01 BCFE or natural gas equivalents
(15:1 ratio). This compares to total proved reserves allocated to
the Company as December 31, 2009 of approximately 4.08 BCFE (15:1
ratio). The proved reserve studies referenced above include
explanatory notes that are an integral part of each study. A copy
of the 2011 President’s Report to Shareholders that includes these
notes will be available on the Company’s website after March 30,
2011. We recommend that all interested parties refer to our website
to view these notes and other relevant information:
www.biloximarshlandscorp.com .
B&L was organized as a limited liability Company (LLC) under
the laws of Louisiana in July of 2006. B&L’s Class A members
are BLMC and Lake Eugenie Land & Development, Inc. (LKEU),
which have membership percentages of 75% and 25% respectively. The
Operating Agreement was amended on November 16, 2009 to create a
Class B membership to allow for certain future projects at the
discretion of the board of managers to be participated by either
Class A or Class B members or a combination of the respective
Classes. B&L’s Class B members are BLMC and LKEU, which have
membership percentages of 90% and 10% respectfully.
Four years ago, the Company returned to its custom of paying one
dividend per calendar year. During its meeting held on December 14,
2010, the Board of Directors declared a $1.25 per share dividend
payable on Thursday, December 30, 2010 to shareholders of record as
of the close of business on Friday, December 24, 2010. This
represents a total cash dividend payment of $3,426,785 or $1.25 per
share. Since 2002, the Company has paid slightly more than
$50,000,000 in total dividends. With our fee land based production
depleting and no new wells being drilling on our fee lands as of
this time, it will be difficult to maintain the level of dividends
paid since 2002. With this said, using 3D seismic data in our
possession, we are constantly working on developing the minerals
located below our fee lands. Meanwhile, we are focusing on
developing reserves outside of our fee acreage position through our
investment in B&L. B&L in its current infancy stage as a
startup exploration Company should not be viewed as a dividend
producing entity.
William B. Rudolf, President and CEO, commented: “We are pleased
with the results of B&L’s drilling program. Our increased daily
production and accompanying increased revenues are of particular
importance. With three new wells placed on production during 2010
and two new discovery wells awaiting placement on production, last
year represented a good year for B&L. We plan to continue
B&L’s drilling program and have three additional wells
scheduled to be drilled during 2011 and are evaluating additional
prospects. Meanwhile, we continue to work on developing both
shallow and deep prospects on the Company’s property. We are
particularly focused on our deep Tuscaloosa Project. Using 3D
seismic data in our possession, our technical team has identified
several massive structures that could yield significant natural gas
and condensate reserves. There is no guarantee that we will be
successful in developing our Tuscaloosa Project or if Tuscaloosa
wells will ever be drilled resulting in discoveries, but we are
fully committed and will continue our efforts to attract partners
interested in this Project. With the difficulties that companies
are experiencing in obtaining drilling permits in federal waters of
the Gulf of Mexico combined with the turmoil in the Middle East,
now appears to be the time for companies with vision to invest in
onshore exploration for deep natural gas.”
The Company maintains a website; www.biloximarshlandscorp.com
and we strongly recommend that all investors and interested parties
visit the website to view historical press releases, historical
financial statements including President’s Report to Shareholders
and general information about the Company. During January 2008 we
moved our office to One Galleria Blvd., Suite #902. Complete and
updated contact information is available on the Company’s website:
www.biloximarshlandscorp.com .
Biloxi Marsh Lands Corporation owns approximately 90,000 acres
of marsh lands located in St. Bernard Parish, Louisiana. As the
landowner, it derives revenues from oil and gas exploration and
production activities that take place on or near the Company’s
land. The Company also derives revenues from its ownership interest
in B&L Exploration, LLC and minimal revenues from surface
rentals.
This news release contains forward-looking statements regarding
oil and gas discoveries, oil and gas exploration, development and
production activities and reserves. Accuracy of the forward-looking
statements depends on assumptions about events that change over
time and is thus susceptible to periodic change based on actual
experience and new developments. The Company cautions readers that
it assumes no obligation to update or publicly release any
revisions to the forward-looking statements in this report.
Important factors that might cause future results to differ from
these forward-looking statements include: variations in the market
prices of oil and natural gas; drilling results; unanticipated
fluctuations in flow rates of producing wells; oil and natural gas
reserves expectations; the ability to satisfy future cash
obligations and environmental costs; and general exploration and
development risks and hazards. Readers are cautioned not to place
undue reliance on forward-looking statements made by or on behalf
of the Company. Each such statement speaks only as of the day it
was made. The factors described above cannot be controlled by the
Company. When used in this report, the words “believes”,
“estimates”, “plans”, “expects”, “should”, “outlook”, and
“anticipates” and similar expressions as they relate to the Company
or its management are intended to identify forward-looking
statements.
The following Statements of Assets, Liabilities and
Stockholders’ Equity and Statement of Revenues and Expenses have
been derived from our end of the year financial statements, but do
not include the information and footnotes that are an integral part
of a complete financial statement. A complete copy of the audited
Financial Statements and Schedule, Years Ended December 31, 2010
and 2009 along with the 2011 President’s Report to Shareholders and
the Company’s Proxy Statement will be available after March 30,
2011 on our website www.biloximarshlandscorp.com or through
requesting a copy in writing; from the Company - Attention:
Investor Relations, Biloxi Marsh Lands Corporation, One Galleria
Blvd., Suite #902, Metairie, LA 70001.
BILOXI MARSH LANDS CORPORATION Statements of Assets,
Liabilities, and Stockholders' Equity-Income Tax Basis December 31,
2010 and 2009
Assets
2010 2009 Current assets: Cash
and cash equivalents $ 4,470,636 6,611,227 Accounts receivable
207,286 148,996 Settlement funds receivable 1,730,389 — Accrued
interest receivable 38,893 69,571 Federal income taxes receivable —
244,918 Prepaid expenses 39,144 37,327 State income taxes
receivable — 80,803 Due from related party 27,647 — Other assets
3,830 3,830 Total current assets 6,517,825
7,196,672 Investment in partnership 4,758,899
2,822,918 Marketable debt and equity securities - at cost 8,043,450
7,679,804 Land 234,939 234,939 Levees and office furniture and
equipment 277,679 251,332 Accumulated depreciation (277,679 )
(251,332 ) 13,037,288 10,737,661 Total assets $
19,555,113 17,934,333
Liabilities and
Stockholders' Equity Current liabilities: Income taxes payable
1,088,754 — Accrued expenses $ 44,856 21,747 Other current
liabilities 3,960 2,520 Total current liabilities
1,137,570 24,267 Stockholders' equity:
Common stock, $0.001 par value. Authorized
20,000,000 shares; issued 2,851,196 shares; outstanding 2,741,428
shares in 2010 and 2009
47,520 47,520 Retained earnings 18,553,088 18,045,611
Treasury Stock, 109,768 and 109,768 shares
in 2010 and 2009, respectively, at cost
(183,065 ) (183,065 ) Total liabilities and stockholders' equity $
19,555,113 17,934,333
BILOXI MARSH LANDS CORPORATION
Statements of Revenues and Expenses - Income Tax Basis Years ended
December 31, 2010 and 2009
3 Months Ended
12 Months Ended December 31 December 31
2010 2009
2010 2009
Revenues: Oil and gas royalties 724,124 411,834
1,833,661 1,341,856 Oil and gas royalties settlement 5,205,463
(130,973 ) 5,205,463 21,460,469 Surface rentals 50,000 50,000
80,000 50,000 Severance taxes (34,043 ) (29,291 )
(88,191 ) (810,453 ) Total oil and gas
revenues 5,945,544 301,570
7,030,933 22,041,872
Other
Income: Gain (loss) from investment in partnership (843,640 )
(2,257,270 ) (764,019 ) (2,615,703 ) Dividends and interest income
80,177 112,192 327,475 362,442 Interest income on oil and gas
royalties settlement - (196,021 ) - 2,754,707 Gain (loss) on sale
of securities 132,225 - 218,149 122,461 Surface rentals (18,768 )
3,575 18,714 16,125 Other 238,657 326,994
238,657 326,994 Total
other revenues (411,349 ) (2,010,530 ) 38,976
967,026 Total revenue 5,534,195
(1,708,960 ) 7,069,909
23,008,898
Expenses Total expenses
902,007 1,072,706 1,649,451
2,139,318 Net Income before income
taxes 4,632,188 (2,781,666 ) 5,420,458
20,869,580
Income taxes
Provision for income taxes 1,249,716 (918,002
) 1,486,196 7,146,955 Net Income
3,382,472 (1,863,664 ) 3,934,262 13,722,625
Net income per share $ 1.23 $ (0.68 ) $ 1.44
$ 5.00
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