Biloxi Marsh Lands Corporation (PINK SHEETS: BLMC) today
announces its unaudited results for the third quarter and first
nine months of 2012 and provides update. Revenue for the three
months ending September 30, 2012 from oil and gas production from
its fee lands was $153,715 compared to revenue of $307,632 for the
third quarter of 2011. For the first nine months of 2012, revenue
generated from the Company’s fee lands decreased to $368,651 from
$1,176,421 for the same period of 2011. During the third quarter of
2012, total revenue includes a net loss of $121,089 generated from
the Company’s investment in B&L Exploration, LLC (“B&L”)
compared to a loss of $687,747 for the third quarter of 2011.
Correspondingly, total revenue for the nine months ended September
30, 2012 includes a net loss of $916,949 generated from B&L.
This loss compares to a net loss of $2,462,807 from B&L for the
first nine months of 2011. During the third quarter of 2012, the
Company realized a cumulative gain from the sale of investment
securities in the amount of $136,481 compared to a cumulative gain
from the sale of investment securities of $58,623 for the same
period in 2011. For the first nine months of 2012, the gain from
the sale of investment securities was $215,316 compared to $612,045
for the first nine months of 2011. The Company’s operating expenses
for the third quarter of 2012 were $194,825 compared to operating
expenses of $195,300 for the same period of 2011. Operating
expenses for the first nine months of 2012 and 2011 were $635,418
and $769,160, respectively, representing a reduction in expenses of
21% year over year. The Company had net income of $22,710 or $.01
per share for the third quarter of 2012 compared to a loss of
$175,299 or $.06 per share during the third quarter of 2011.
Meanwhile, for the first nine months of 2012, the net loss was
$452,209 or $.17 per share compared to a net loss of $746,189 or
$.27 per share for the same period of 2011.
As of September 30, 2012 the combined gross daily production
rate from 2 wells operated by the Company's mineral lessees was
approximately 0.53 million cubic feet (mmcf) of natural gas with
net daily production accruing to the Company of approximately 0.05
mmcf. The Ducros/SL 17958 Well operated by Alta Mesa, one of the
Company’s mineral Lessees, remains off production due to mechanical
problems which require rig intervention to repair. This well was
producing at a rate of approximately 3,500 mmcfg per day prior to
going off production in March of 2012. Reworking operations to
bring this well back on production are underway, and Alta Mesa
advises that they hope to return this well to production prior to
the end of 2012. The Company has approximately 50% of the CRIS I RC
SUA Unit from which this well is being produced. Following the
passage of Hurricane Isaac, Alta Mesa returned its remaining wells
to production on October 2, 2012.
Combining the 2 wells operated by the Company's mineral lessees
with BLMC’s interest in the B&L wells, the total combined daily
production accruing to BLMC (from B&L and Lessee wells) as of
September 30, 2012 was approximately 1.7 mmcfe (natural gas
equivalents 15:1 oil to gas ratio) per day. It should be noted that
3 of the 10 wells in which B&L has a working interest were
temporarily shut-in, thus not producing on September 30, 2012.
Hurricane Isaac impacted production when the storm came through
the region in late August. All wells were shut-in in advance of the
storm. The Goodrich Land and Energy No. 1 well, CL&F No. 1
well, Harry Bourg No.1 well, and Fleming Plantation No. 1 well were
placed back on production shortly after the storm and sustained
minimal damage, if any. The SL 19061 #1 well, Lake Eugenie Land
& Development #1 well, and Delacroix #41 ST well sustained
damage during the storm, and after repairs, these wells were
returned to production. As of September 30, 2012, B&L has
working interests in 10 wells capable of production and to which
proved reserves are assigned.
The SL 19076 No. 1 well located in Coquille Bay in Plaquemines
Parish, Louisiana, and operated by Clayton Williams Energy, Inc.
(“CWE”) experienced minor mechanical problems immediately prior to
Hurricane Isaac. Remedial work was completed prior to Hurricane
Isaac’s passage, but the storm required shutting in the well and
facilities prior to determining if the remedial work was
successful. Due to damage to the facilities caused by the storm
that necessitated repairs, the well has yet to be returned to
production. CWE advises that the well should be returned to
production during December of 2012.
McMoRan Exploration Co. (NYSE:MMR) in its Third-Quarter/Nine-Month 2012 Results updated its
“Ultra-Deep Exploration Activities” including “that drilling
commenced on September 19, 2012 in the Highlander area on the
Lomond North ultra-deep prospect. Lomond North, which is
located in St. Martin Parish, LA, is currently drilling below 6,700
feet. This exploratory well has a proposed total depth of 30,000
feet and is targeting Eocene, Paleocene and Cretaceous objectives
below the salt weld. McMoRan has identified multiple exploratory
prospects in the Highlander area where it controls the rights to
approximately 80,000 gross acres in Iberia, St. Martin, Assumption
and Iberville Parishes, Louisiana.” As previously reported B&L
is contractually entitled to a 1.5% of 8/8ths overriding royalty
interest in the Lomond North prospect exploratory well and in all
mineral leases obtained by MMR in this approximately 80,000 gross
acre Highlander area located in Iberia, St. Martin, Assumption and
Iberville Parishes, Louisiana.
During the June 20, 2012 Central Gulf of Mexico Lease Sale
216/222 held by the Bureau of Ocean Energy Management (BOEM) in New
Orleans, Louisiana, B&L, through its working interest partner
Destin Resources, LLC, was the high bidder on Eugene Island Block
74. BOEM has since awarded this lease which has added approximately
5,000 gross acres to B&L’s leasehold inventory. B&L holds a
60% working interest in Eugene Island Block 74 and is currently
working with its partner to further delineate potential drilling
targets.
Meanwhile, 2D seismic operations commenced during the third
quarter of 2012 on B&L’s Phoenix Prospect in Union Parish,
Louisiana, and the project now is in the interpretation and mapping
phase. B&L and its operating partner, Greystone Oil & Gas,
LLP, control approximately 7,000 gross acres in Union Parish. The
objective in this prospect is the upper Smackover intervals as well
as Lower Smackover Brown Dense formation.
As previously reported, in addition to the foregoing
projects/prospects, B&L is actively assembling additional
prospective acreage on which to explore and possibly place working
interests with third party partners. During the current period of
higher drilling costs, B&L is actively engaged in this strategy
of assembling prospective acreage in an effort to improve drilling
and completion economics and manage risk on a going forward
basis.
A reflection of the success of B&L’s strategy is its recent
acquisition of approximately 50 square miles or 30,000 acres of
mineral and surface rights in Calhoun and Victoria County, Texas.
This project is identified as B&L’s Lago Verde 3D Seismic
Project. On September 18, 2012 B&L commenced field operations
for the collection of proprietary 3D seismic data over this 50
square mile area. This focus area is situated in the prolific oil
rich leg of the Frio trend with adjacent fields having produced in
excess of 200 million barrels of oil (MMBO) and 1.8 trillion cubic
feet (TCF) of natural gas. The potential targets are Miocene and
Oligocene which are relatively shallow ranging from 3,000 feet to
11,000 feet and are drilled with land rigs. Additionally, there is
extensive pipeline infrastructure in the area. B&L has an 87.5%
working interest in this Lago Verde 3D Seismic Project.
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.
William B. Rudolf, President and CEO, commented: “While the
price of natural gas has recovered somewhat from its lows earlier
this year, it still has not reached the level needed to foster
interest in drilling for natural gas on our fee lands. Meanwhile,
B&L has successfully acquired key mineral assets including the
approximately 5,000 acre Eugene Island Block 74 and the
approximately 30,000 acre Lago Verde 3D Seismic Project. We are
pleased that McMoRan commenced drilling its Lomond North ultra-deep
prospect in September which is located within MMR’s Highlander
area. It is encouraging that MMR has apparently expanded its
Highlander area acreage position from some 68,000 acres to
approximately 80,000 gross acres. MMR’s public announcement that it
has identified multiple exploratory prospects in the Highlander
area is also encouraging. All of these events could, in time,
represent tremendous value for B&L. B&L’s success in
acquiring these mineral positions in prospective areas should
favorably position B&L for the future and lead to a robust
drilling program during 2013.”
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, and other relevant information.
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 “Statements of Revenues and Expenses”
have been derived from interim un-audited financial statements
which do 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 September 30, 2012 and 2011
Assets 2012 2011
Current assets: Cash and cash equivalents $ 1,801,553
3,327,573 Accounts receivable 17,921 124,833 Prepaid expenses
55,380 59,519 Accrued interest receivable 28,681 34,556 Deferred
tax asset 535,910 476,069 Federal income taxes receivable 16,136
87,282 State income taxes receivable 18,151 27,861 Other assets
3,830 3,830 Total current assets
2,477,562 4,141,523 Other assets: Investment in
partnership 2,368,910 2,296,094 Marketable debt and equity
securities - at cost 10,466,966 11,006,055 Land 234,939 234,939
Levees and office furniture and equipment 299,574 295,166
Accumulated depreciation (299,574 ) (295,166 ) Total other
assets 13,070,815 13,537,088 Total
assets $ 15,548,377 17,678,611
Liabilities
and Stockholders' Equity Current liabilities: Accrued expenses
$ 5,556 21,944 Other current liabilities 4,608 35,313
Total current liabilities 10,164 57,257 Stockholders'
equity:
Common stock, $.001 par value. Authorized,
20,000,000 shares; issued, 2,851,196 shares; outstanding, 2,719,178
and 2,738,428 shares in 2012 and 2011, respectively
47,520 47,520 Retained earnings 15,899,504 17,806,899
Treasury stock - 132,018 and 112,768
shares in 2012 and 2011, respectively, at cost
(408,811 ) (233,065 ) Total liabilities and stockholders'
equity $ 15,548,377 17,678,611
BILOXI MARSH LANDS CORPORATION
Statements of Revenues and Expenses September 30, 2012 and 2011
3 Months Ended 9 Months
Ended September 30 September 30 2012
2011 2012 2011 Revenues: Oil and gas
royalties $ 157,696 $ 322,388 $ 390,738 $ 1,229,910 Severance taxes
(3,981 ) $ (14,756 ) (22,087 ) (53,489 ) Oil
and gas royalties, net 153,715 307,632
368,651 1,176,421 Other (loss)
income: Income (loss) from investment in partnership (121,089 )
(687,747 ) (916,949 ) (2,462,807 ) Dividends and interest income
45,454 57,069 131,624 191,487 Gain on sale of securities 136,481
58,623 215,316 612,045 Surface rentals 12,175 11,225 12,175 11,225
Other 5,490 8,281 79,856
18,531 Total other (loss) income 78,511
(552,549 ) (477,978 ) (1,629,519 ) Total
revenues and income 232,226 (244,917 )
(109,327 ) (453,098 ) Expenses: Total expenses
194,825 195,300 635,418
769,160 Net (loss) income before income taxes 37,401
(440,217 ) (744,745 ) (1,222,258 ) Income tax (benefit) expense
14,691 (264,918 ) (292,536 )
(476,069 ) Net (loss) income $ 22,710 (175,299 ) $
(452,209 ) (746,189 ) Net (loss) income per share $
0.01 $ (0.06 ) $ (0.17 ) $ (0.27 )
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