Biloxi Marsh Lands Corporation (PINK SHEETS:BLMC) announces
results for the year ending December 31, 2011 and provides update.
The Company’s annual revenue breakdown is as follows: 2011 revenue
from oil and gas production for its fee lands was $1,503,056
compared to revenue of $7,030,933 in 2010. During 2010, the Company
received $5,205,463 in nonrecurring oil and gas revenue which was
the result of the settlement of all cases involving disputed
ownership of water-bottoms between the Company and the State of
Louisiana.
During 2011, total revenues included a $3,423,042 loss emanating
from the Company’s investment in B&L Exploration, LLC
(B&L). This compares to a loss of $764,018 from B&L in the
prior year. As an operating oil and gas entity, B&L’s results
included deductions for depreciation, depletion and amortization
(DD&A) costs relating to its ongoing drilling and production
activities. BLMC’s share of these DD&A expenses was $1,801,797
and $733,934 for 2011 and 2010, respectively. While the Company had
the option to capitalize its portion of intangible drilling costs
(IDC) incurred by B&L in its 2010 and 2011 drilling programs,
the Company elected to expense one hundred percent (100%) of its
share of IDC for the years 2010 and 2011. By fully expensing its
portion of B&L’s IDC for calendar year 2011, the Company is
able to carry back the current year generated loss to prior years
and obtain significant refunds of income taxes paid in 2008 and
2009. During 2012, the Company will file carryback claims which
will likely result in income tax refunds totaling $742,136.
Meanwhile, dividend and interest income for 2011 was $254,128,
compared to $327,475 for 2010. In 2011 the Company realized a
cumulative gain from the sale of investment securities of
$1,600,569 compared to a cumulative gain in the amount of $218,149
in 2010. Meanwhile, expenses for the year totaled $1,439,114
compared to $1,649,451 for the prior year. For the year, the
Company incurred a net loss of $695,955 or $.25 per share compared
to a net profit of $3,934,262 or $1.44 per share in 2010. It should
be noted that the Company’s basis of accounting is the accrual
method of tax accounting used for federal income tax reporting
purposes.
As of December 31, 2011 the combined gross daily production rate
from 6 wells operated by the Company's mineral Lessees was
approximately 6.9 million cubic feet (mmcf) of natural gas with net
daily production accruing to the Company of approximately .894
mmcf. Meanwhile, B&L’s net daily production was approximately
4.0 million cubic feet of natural gas equivalents (mmcfge) (15:1
oil to gas ratio) as of December 31, 2011 compared to approximately
3.0 mmcfge per day as of December 31, 2010. As of December 31,
2011, B&L’s net production breakdown was approximately 2.4
mmcfg and 100 barrels of oil per day. 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, 2011
approximately 4.3 mmcfge per day compared to 4.02 mmcfge as of
December 31, 2010. This increased daily production was due solely
to the increase in B&L’s daily production. It should be noted
that B&L has a non-operated working interest in three wells
which have been drilled, completed and successfully flow tested,
but are yet to be placed on production. All three of these wells,
SL 19706 No. 1, CL&F No.1 and the Goodrich Land and Energy No.
1 are expected to be placed on production during the first half of
2012.
In February of 2012 the Goodrich Land and Energy No. 1 well
located in St. Martin Parish, Louisiana and operated by Linder Oil
Company was drilled, successfully completed and partially flow
tested. Electric logs indicated approximately 47 net feet of pay in
4 sand intervals. The lowest most interval, the “J” Sand, was
successfully flow tested at a maximum rate of 849 mcfg per day with
flowing tubing pressure of 3,135 psi on a 10/64th choke. Based on
production history in the field, the Operator anticipates that this
“J” sand zone should turn to oil after the natural gas cap is
produced. Linder Oil Company advises this well should be placed on
production by April 30, 2012. B&L has as 15% non-operated
working interest in this well.
Meanwhile, the SL 19706 No. 1 Well operated by Clayton William
Energy (CWE) and in which B&L has a 15% non-operated working
interest is scheduled to be placed on production by April 15, 2012.
This well was originally scheduled to be placed on production as of
January 1, 2012, but has been delayed due to weather and problems
in constructing the sales pipeline tie-in.
The CL&F No. 1 Well which was flow tested on September 27,
2011 and operated by Forza Operating Company is scheduled to be
placed on production by June 15, 2012. B&L has a 9.375%
non-operated working interest in this well.
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,
2011 BLMC’s “Developed Producing” (PDP) reserves were .600 billion
cubic feet (BCF) of natural gas and estimates that the “Developed
Non-Producing” (PDNP) reserves were .521 BCF, totaling 1.121 BCF of
estimated proved natural gas reserves. Additionally, this reserve
study estimates that approximately 21% of the proved reserves will
deplete by the end of 2012.
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, 2011
were approximately 2.4 billion cubic feet of natural gas (BCFG) and
81 thousand barrels of oil (MBBL) which compares to 2.3 billion
cubic feet (BCF) of natural gas and 25 thousand barrels of oil
(MBBL) at the end of 2010.
The proved reserve studies referenced above include explanatory
notes that are an integral part of each study. A copy of the 2012
President’s Report to Shareholders that includes these notes will
be available on the Company’s website after March 30, 2012. The
Company recommends that all interested parties refer to its 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.
During its meeting held on December 6, 2011 the Board of
Directors declared a dividend of $.55 per outstanding share of
common stock payable on Wednesday, December 28, 2011 to
shareholders of record at the close of business on Wednesday,
December 14, 2011. This represents a total cash dividend payment of
$1,505,420 or $.55 per share in 2011. Since 2002, the Company has
paid approximately $51,500,000 in total dividends. With the
Company’s fee land based production depleting and no new wells
being drilling on its fee lands, 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 the Company’s fee lands.
Meanwhile, the Company is focusing on developing reserves outside
of its fee acreage and diversifying into oil production through its
investment in B&L. In its current stage of growth and continued
reinvestment in its successful drilling program, B&L should not
be viewed as a dividend producing entity.
William B. Rudolf, President and CEO, commented: “We continue to
be pleased with the results of B&L’s drilling program. B&L
exceeded the five million dollar revenue threshold for first time
since its inception and placed two new wells on production during
2011 with three additional wells awaiting the day of first
production sales. As of December 31, 2011, B&L had working
interests in ten wells to which proved reserves were assigned.
B&L plans to continue its drilling program and currently has
two additional wells scheduled to be drilled during 2012 and is
evaluating additional prospects. Due to the large variance in price
between oil and natural gas, B&L is focusing on oil prospects
and natural gas prospects with potentially high natural gas liquid
yields. While we continue to work on developing both shallow and
deep prospects on the Company’s property, particularly our deep
Tuscaloosa Project, the current depressed price of natural gas is
making the marketing of these prospects difficult.”
The Company maintains a website, www.biloximarshlandscorp.com,
and strongly recommends 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.
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 and expenses 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 the Company’s 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, 2011 and 2010 along with the 2011 President’s Report
to Shareholders and the Company’s Proxy Statement will be available
after March 30, 2012 on the Company’s 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, 2011 and 2010
Assets 2011
2010 Current assets: Cash and cash equivalents $
3,220,432 4,470,636 Accounts receivable 146,516 207,286 Settlement
funds receivable — 1,730,389 Accrued interest receivable 22,250
38,893 Prepaid expenses 39,987 39,144 Due from related party 27,647
Deferred tax asset 813,807 Federal income taxes receivable 16,136 —
State income taxes receivable 14,160 — Marketable debt securities -
at cost 301,525 Other assets 3,830 3,830 Total
current assets 4,578,643 6,517,825 Investment
in partnership 1,335,857 4,758,899 Marketable debt and equity
securities - at cost 10,028,136 8,043,450 Land 234,939 234,939
Levees and office furniture and equipment 298,429 277,679
Accumulated depreciation (298,429 ) (277,679 ) 11,598,932
13,037,288 Total assets $ 16,177,575 19,555,113
Liabilities and Stockholders' Equity Current
liabilities: Income taxes payable — 1,088,754 Accrued expenses $
19,345 44,856 Other current liabilities 4,410 3,960
Total current liabilities 23,755 1,137,570 Stockholders' equity:
Common stock, $0.001 par value. Authorized
20,000,000 shares; issued 2,851,196 shares; outstanding 2,735,328
and 2,741,428 shares in 2011 and 2010, respectively
47,520 47,520 Retained earnings 16,351,713 18,553,088
Treasury Stock, 115,868 and 109,768 shares
in 2011 and 2010, respectively, at cost
(245,413 ) (183,065 ) Total liabilities and stockholders' equity $
16,177,575 19,555,113
BILOXI MARSH LANDS CORPORATION
Statements of Revenues and Expenses - Income Tax Basis Years ended
December 31, 2011 and 2010
3 Months Ended 12 Months Ended December
31 December 31 2011 2010
2011 2010 Revenues: Oil and gas
royalties 289,282 724,124 1,519,192 1,833,661 Oil and gas royalties
settlement - 5,205,463 - 5,205,463 Severance taxes (12,647 )
(34,043 ) (66,136 ) (88,191 ) Oil and gas
royalties, net 276,635 5,895,544 1,453,056 6,950,933 Surface
rentals 50,000 50,000 50,000
80,000 Total oil and gas revenues
326,635 5,945,544 1,503,056
7,030,933
Other Income: Loss
from investment in partnership (960,235 ) (843,640 ) (3,423,042 )
(764,019 ) Dividends and interest income 62,641 80,177 254,128
327,475 Gain on sale of securities 988,524 132,225 1,600,569
218,149 Surface rentals 22,145 (18,768 ) 22,145 18,714 Other
13,886 238,657 43,642
238,657 Total other income 126,961
(411,349 ) (1,502,558 ) 38,976
Total revenue 453,596 5,534,195
498 7,069,909
Expenses:
Total expenses 669,954 902,007
1,439,114 1,649,451 Net (loss) income
before income taxes (216,358 ) 4,632,188
(1,438,616 ) 5,420,458
Income
taxes Provision for income taxes (266,592 )
1,249,716 (742,661 ) 1,486,196
Net (loss) income 50,234 3,382,472 (695,955 ) 3,934,262
Net (loss) income per share $ 0.02
$ 1.23 $ (0.25 ) $ 1.44
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