Biloxi Marsh Lands Corporation (PINK SHEETS: BLMC) today
announces its unaudited results for the second quarter and first
six months of 2011 and provides update. The Company’s direct oil
and gas revenues produced from its fee lands for the second quarter
of 2011 increased to $379,255 from $333,036 during the second
quarter of 2010. For the first six months direct oil and gas
revenue increased to $868,789 from $645,936 for the same period of
2010. Meanwhile, during the second quarter revenues from Dividends
and Interest, Gain on Sale of Securities and Miscellaneous Income
increased to $567,014 from $51,811 for the second quarter of 2010.
The main component of this increase was a $498,007 gain realized
from the sale of investment securities. For the first six months of
2011 Dividends and Interest, Gain on Sale of Securities and
Miscellaneous Income increased to $698,090 from $187,214 for the
first six months of 2010. The Company’s total direct revenues
increased for the second quarter of 2011 to $946,269 from $384,847
for the second quarter of 2010, while for the first six months of
2011 direct revenues increased to $1,566,879 from $833,150 for the
same period of 2010.
Meanwhile the Company incurred a loss of ($1,825,816) emanating
from partnership income which represents the Company’s investment
in B&L Exploration, LLC (B&L). This compares to a net gain
of $29,182 in the same category during the second quarter of 2010.
The loss emanating from the Company’s investment in B&L is
directly related to B&L drilling four wells during second and
third quarters, related prepayment of Q3 drilling costs, completing
the LL&E No. 1 well, and performing work-over operations on the
Gautreaux No. 1 well. For the first six months of 2011 partnership
income was ($1,775,060) including $374,913 in Depreciation,
Depletion and Amortization compared to income of $26,565 in the
same category for the first six months of 2010. This reduction in
partnership income for the first six months of 2011 was mainly due
to the reasons set forth above and expenses related to completing
and building infrastructure for the wells successfully drilled
during Q3 and Q4 of 2010. It should be noted that despite the
Gautreaux No. 1 Well experiencing apparent mechanical difficulties
and being off production, B&L’s revenues increased 15% during
the first half of 2011 compared to the first half of 2010. Due to
prudent management of B&L’s treasury and its cash flows,
management has been able to undertake all of the foregoing activity
without utilizing any of B&L’s revolving credit facility.
The Company’s operating expenses for the second quarter of 2011
were $271,884 compared to operating expenses of $268,201 for the
same period of 2010. Due to the carry through of B&L’s
operational expenses, the Company showed a net loss of ($570,890)
or ($.21) per share for the first half of 2011 compared to a profit
of $236,576 or $.09 per share for the same period of 2010.
As of June 30, 2011 the combined gross daily production rate
from 4 wells operated by the Company's mineral Lessees was
approximately 8.1 million mmcf of natural gas with net daily
production accruing to the Company of approximately 1.1 mmcf.
Combining this daily production with the Company's proportional
share of the daily production from the B&L Exploration, LLC
(B&L) wells makes the total net daily production accruing to
the Company as of June 30, 2011 approximately 3.5 mmcfe (million
cubic feet of natural gas equivalents) per day.
B&L Exploration, LLC (B&L), a partially owned subsidiary
of the Company, placed its LL&E #1 on production in June of
2011. B&L was very active in 2011, participating in the
drilling of 4 additional wells during the second and third
quarters. B&L also acquired additional interest in a buyout of
the Operator of the Lake Eugenie Land & Development #1 well. As
a result of this buyout B&L assumed Operations of this well. As
of the time of the press release, B&L is the Operator of 6
wells in coastal Louisiana. This represents a significant change in
B&L business model. Being the designated Operator gives B&L
control over operations and finances of each well which give it an
added advantage.
We are pleased to announce that three of these four wells
mentioned in the foregoing paragraph are being completed as
commercial oil and gas wells with one being plugged and abandoned
as a dry-hole. The following lists the results of B&L’s recent
drilling program in the chronological order by which the wells were
logged.
SL 20413 No. 1 well, operated by Manti Operating Company, was
logged on May 9, 2011. This well encountered sand in the expected
intervals. Unfortunately, hydrocarbons were not trapped in the sand
intervals and the well was plugged and abandoned as a dry-hole.
B&L had a 25% non-operated working interest in this well.
The next well logged was the SL 19076 No. 1. This well is
operated by Clayton Williams Energy, Inc. (CWE) and electric logs
were run on June 13, 2011. Electric logs indicate approximately 220
net feet of pay in 7 different sand intervals. No sidewall cores
were obtained, but the electric log indicates significant natural
gas and oil pay sands. B&L has a 15% non-operated working
interest in this well. CWE advises that this well should be placed
on production during Q4 of 2011 or Q1 of 2012.
On June 22, 2011 the Harry Bourg No. 1 well was logged. This
well is operated by B&L. Electric logs indicate approximately
34 net feet of apparent natural gas pay in one sand interval with
another 8 net feet of probable natural gas pay. B&L has a 28%
working interest in this well. B&L hopes to have this well on
production by mid-September of 2011.
The Continental Land & Fur (CL&F) No. 1 Well was logged
on July 23, 2011. This well is operated by Forza Operating Company.
Electric Logs indicate approximately 8’ of pay with sidewall cores
indicating condensate. Due to the potential of high condensate
yields the Operator recommended completing this well. B&L has a
9.375% non-operated working interest in this well. As of this time,
we do not have an estimate concerning the commencement of
production.
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.
Meanwhile, Biloxi’s consulting staff continues to work on
development of additional prospects on our fee lands. We are
actively marketing our deep Tuscaloosa prospects and have
reprocessed a small area of 3D seismic data in the Company’s
possession. This reprocessing has yielded several relatively
shallow geophysical leads which we hope, after more work, will be
considered viable prospects to drill.
William B. Rudolf, President and CEO, commented: “We are pleased
with the results of the small area of 3D which we reprocessed. We
are hopeful that the geophysical leads developed will someday lead
to additional shallow wells drilled on our fee lands. Though we
have only just begun to market the Tuscaloosa project to industry,
we are pleased with the initial interest shown in our project. We
continue to refine the geological and geophysical aspects of the
Tuscaloosa project and intend to commence a strong marketing effort
during the latter part of 2011 and early 2012. Meanwhile, we
continue to be pleased with the results of B&L drilling program
and are particularly pleased with the SL 19076 No. 1 Well which
appears to be a fairly significant discovery.”
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. 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 the vast majority of its revenue from oil and
gas exploration and production activities that take place on or
near the Company’s land as well as its proportional share of
revenue generated by B&L Exploration, LLC. The Company also
derives 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 “indicates”,
“approximate”, “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 and
Retained Earnings” have been derived from an interim un-audited
financial statement which does not include the information and
footnotes that are an integral part of a complete financial
statement.
BILOXI MARSH LANDS CORPORATION Statements of Assets,
Liabilities, and Stockholders' Equity June 30, 2011 and 2010
Assets 2011 2010 Current
assets: Cash and cash equivalents $ 3,250,352 6,161,600 Accounts
receivable 413,758 119,329 Prepaid expenses 50,380 4,625 Accrued
interest receivable 25,187 63,158 Federal income taxes receivable
298,433 143,528 State income taxes receivable 41,562 79,163 Other
assets 3,830 3,830 Total current assets
4,083,502 6,575,233 Other assets: Investment in
partnership 2,983,839 2,849,483 Marketable debt and equity
securities - at cost 10,583,580 8,545,492 Land 234,939 234,939
Levees and office furniture and equipment 295,166 255,430
Accumulated depreciation (295,166 ) (255,430 ) Total other
assets 13,802,358 11,629,914 Total
assets $ 17,885,860 18,205,147
Liabilities and
Stockholders' Equity Current liabilities: Accrued expenses
35,120 54,545 Other current liabilities 4,087 3,960
Total current liabilities 39,207 58,505 Stockholders'
equity:
Common stock, $.001 par value. Authorized
20,000,000 shares; issued 2,851,196 shares; outstanding 2,741,428
shares in 2011 and 2010
47,520 47,520 Retained earnings 17,982,198 18,282,187 Treasury
stock - 109,768 shares in 2011 and 2010 (183,065 ) (183,065
) Total liabilities and stockholders' equity $ 17,885,860
18,205,147
BILOXI MARSH LANDS CORPORATION
Statements of Revenues and Expenses June 30, 2011 and 2010
3 Months Ended 6 Months Ended June
30 June 30 2011 2010 2011
2010 Revenues: Oil and Gas
Royalties $ 395,539 $ 323,302 $ 907,522 $ 656,631 Severance Taxes
(16,284 ) (20,266 ) (38,733 ) (40,695 )
Oil and gas royalties, net 379,255 303,036 868,789 615,936
Delay Rentals - 30,000 -
30,000 Total oil and gas revenues 379,255
333,036 868,789 645,936
Other: Income (loss) from investment in
partnership (1,825,816 ) 29,182 (1,775,060 ) 26,565 Dividends and
interest income 64,907 83,916 134,418 161,969 Gain on sale of
securities 498,007 (39,737 ) 553,422 17,613 Miscellaneous Income
4,100 7,632 10,250
7,632 Total other income (1,258,802 )
80,993 (1,076,970 ) 213,779
Total revenues and income (879,547 ) 414,029
(208,181 ) 859,715
Expenses
Total expenses 271,884 268,201
573,860 521,750 Net income
before provision for income taxes (1,151,431 )
145,828 (782,041 ) 337,965
Income taxes Provision for income taxes (310,886 )
43,748 (211,151 ) 101,389
Net income $ (840,545 ) $ 102,080 $ (570,890 ) $ 236,576
Net income per share $ (0.31 ) $ 0.04
$ (0.21 ) $ 0.09
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