Biloxi Marsh Lands Corporation (PINK SHEETS:BLMC) announces
results for the year ending December 31, 2013 and provides update.
The Company’s annual revenue breakdown is as follows: 2013 revenue
from oil and gas production for its fee lands was $636,189 compared
to revenue of $572,559 in 2012.
For the year 2013, total revenues included a $1,740,193 loss
emanating from the Company’s investment in B&L Exploration, LLC
(B&L). This compares to a loss of $714,604 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 $927,415
and $800,488 for 2013 and 2012, respectively.
Meanwhile, dividend and interest income for 2013 was $164,275,
compared to $199,024 for 2012. In 2013, the Company realized a
cumulative gain from the sale of investment securities of
$2,072,125 compared to a cumulative gain in the amount of $23,630
in 2012. During the fourth quarter of 2013, the Company recognized
a settlement gain in the amount of $3,189,681. Total revenues for
2013 were $4,375,680 compared to $198,297 during 2012. Expenses for
the year totaled $1,116,014 compared to $983,083 for the prior
year. For the year, the Company had net income of $2,450,729 or
$.90 per share compared to a net loss of $460,635 or $.17 per share
in 2012.
As of December 31, 2013, the combined gross daily production
rate from 4 wells operated by the Company's mineral lessees was
approximately 3.02 million cubic feet (mmcf) of natural gas with
net daily production accruing to the Company of approximately .359
mmcf. Meanwhile, as of December 31, 2013, B&L’s gross
production was approximately 4.716 mmcfg and 312 barrels of oil
from 5 wells with .804 mmcfg and 31 barrels of oil per day accruing
to B&L.
Freeport-McMoRan Oil and Gas (FM O&G), a wholly owned
subsidiary of Freeport-McMoRan Copper and Gold Inc. (NSYE:FCX), in
FCX’s January 22, 2014 news release stated that: “The Lomond North
exploratory well in the Highlander area,……,located in St. Martin
Parish, Louisiana, is currently drilling and has encountered gas
pay in several Wilcox and Cretaceous aged sands between 24,000 feet
and 29,000 feet. The wireline log and core data obtained from the
Wilcox and Cretaceous sand packages evaluated to date indicate
favorable reservoir characteristics with approximately 150 feet of
net pay. FM O&G will continue drilling the Lomond North well in
the Cretaceous to test deeper prospective targets. FM O&G plans
to commence completion operations in mid-2014 followed by a flow
test. FM O&G has identified multiple exploratory prospects in
the Highlander area where it controls rights to approximately
56,000 gross acres.”
Subsequently, during the 2014 Credit Suisse Energy Summit held
in February 2014, FM O&G presented the Lomond North Well log,
structure map and the proposed location of the second well to be
drilled in the Highlander area. FM O&G illustrated that the
“Lomond North Discovery” is the first discovery in the Highlander
area and is a discovery within the “Cretaceous Tuscaloosa” sand
interval. The presentation stated that the Highlander area has “3.0
TCF Gross Resource Potential.” While B&L’s management is
encouraged by FM O&G reports, B&L does not have access to
information beyond that which is made public by FM O&G and its
working interest partners. B&L is awaiting the scheduled flow
test of the Lomond North well with cautious optimism. In the event
that the flow test is successful and the well is placed on
production at rates estimated by FM O&G and/or its working
interest partners, the revenue derived from the overriding royalty
interest would be relatively significant to B&L.
As previously reported, B&L has been assigned and is
contractually entitled to a 1.5% of 8/8ths overriding royalty
interest (ORRI) in the Lomond North prospect discovery well and in
all mineral leases obtained by FM O&G in its Highlander project
area located in Iberia, St. Martin, Assumption and Iberville
Parishes, Louisiana.
As previously reported, B&L is actively assembling
additional prospective acreage on which to explore, exploit and
develop the acreage’s mineral interest. The goal is to place a
portion of the working interests with third party industry partners
in an effort to mitigate risk. In addition to the Lomond North
discovery well in which B&L has an ORRI, B&L participated
in the drilling of the Williams C-4 ST1 well during the third
quarter of 2013. On September 26, 2013 electric logs were run in
the Williams C-4 ST1 well. Electric logs indicated approximately
22’ of net oil pay sand in the “J” sand interval. In the subsequent
flow test, the well flowed at a maximum rate of 665.9 barrels of
oil per day (BOPD) and 0.0 barrels of water per day (BWPD), with
flowing tubing pressure (FTP) of 1318 psi on a 13/64” choke.
B&L has a 16.59% working interest in this well. On March 14,
2014 Linder Oil and Gas, the Operator, began the process of placing
this well on production. The planned production rate is
approximately 400 barrels of oil per day and associated natural
gas.
B&L’s acquisition of approximately 50 square miles or
approximately 30,000 acres of mineral and surface rights in Calhoun
and Victoria County, Texas is identified as B&L’s Lago Verde 3D
Seismic Project. As previously reported, B&L successfully
placed a significant working interest in its Lago Verde project
with the Bass Group with main offices in Fort Worth, Texas. The
current evaluation of the processed 3D seismic data indicates
multiple prospect and additional prospect leads. BOPCO, the
operating company for the Bass Group, will operate any wells that
may be drilled within this Lago Verde project area. B&L
retained a 33.5% ground floor working interest in the Lago Verde
project. As of this time, it is anticipated that drilling
operations on the Lago Verde multi-well drilling program should
commence during the latter part of the second quarter or the early
part of the third quarter of 2014. In the initial round of
drilling, B&L and the other working interest owners plan to
drill four to five prospects. In the ordinary course of any
exploration program, the success or failure of the initial round of
drilling could lead to the drilling of additional or fewer
prospects.
As previously reported, B&L has obtained the mineral rights
to Eugene Island Block 74. B&L currently holds a 60% working
interest in Eugene Island Block 74. We reported that B&L hoped
to commence drilling operations during 2014. Due to other
exploratory priorities, B&L’s management has decided to delay
drilling operations in the Eugenie Island Block 74 prospect area
until 2015.
During 2013, the Company received a settlement payment for its
wetlands real property claim under the BP Deepwater Horizon
Economic and Property Damages Settlement Program. The Company has
been advised by our legal counsel that an additional limited
recovery under the settlement is expected, but as of this time it
is difficult to determine the timing and amount of the additional
settlement, if any.
Beginning on October 1, 2008 the Company announced its initial
stock repurchase plan to purchase up to 27,500 shares of our common
stock. Since that time we have authorized the purchase of
additional shares, thus bringing the total authorized amount of
shares under the plan to 67,500. As of December 31, 2013 we have
been successful in purchasing a total of 39,400 shares of common
stock as authorized by our Board of Directors. We plan to continue
to repurchase our common stock during 2014.
The Company and B&L have commissioned proved reserve studies
as of December 31, 2013. Summaries and notes from these proved
reserve studies will be included in the 2014 President’s Report to
Shareholders and will be available on the Company’s website after
March 28, 2014. The Company recommends that all interested parties
refer to its website to view the reserve summaries 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. In December
2012, the members approved the consolidation of all the membership
classes into a single class of membership, consistent with the
Class A membership. All appropriate actions were taken according to
the terms of the operating agreement with respect to the
consolidation. Effective January 1, 2013, BLMC and LKEU have
membership percentages of 75% and 25%, respectively.
During its meeting held on December 13, 2013, the Board of
Directors declared a dividend of $.55 per outstanding share of
common stock payable on Friday, December 27, 2013 to shareholders
of record at the close of business on Tuesday, December 24, 2013.
This represents a total cash dividend payment of $1,493,265 or $.55
per share in 2013. Since 2002, the Company has paid approximately
$53,900,000 in total dividends. With the Company’s fee land based
production depleting and no new wells being drilled 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 its
possession, the Company is constantly working on developing the
minerals located below its 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 are
awaiting the flow test on FM O&G’s Lomond North well with
cautious optimism. In the event that this well flows natural gas
and condensate at commercial rates from the Tuscaloosa sand
interval, it could mean an increase in drilling activity throughout
coastal Louisiana, including on the Company’s fee lands. We are
watching closely the significant draw down in natural gas storage
and the current increase in natural gas pricing. In the event that
natural gas pricing remains at higher levels and the Lomond North
well produces at commercial rates, we intend to concentrate our
efforts on marketing the deep gas prospects beneath the Company’s
fee lands, including Alpha and Beta prospects.”
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
and minimal revenues from surface rentals. The Company also derives
revenues and expenses from its ownership interest in B&L
Exploration, LLC (B&L).
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,” “could,” “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—Income Tax Basis and Statements of Revenues
and Expenses—Income Tax Basis 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—Income Tax Basis, Years Ended December 31,
2013 and 2012 along with the 2014 President’s Report to
Shareholders and the Company’s Proxy Statement will be available
after March 28, 2014 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, 2013 and 2012
Assets
2013 2012 Current assets: Cash and cash
equivalents $ 3,378,827 1,802,767 Accounts receivable 64,157
112,763 Accrued interest receivable 20,838 19,275 Prepaid expenses
38,967 36,113 Deferred tax asset 21,265 426,345 State income taxes
receivable — 177,850 Marketable debt securities - at cost 300,262
295,525 Other assets 3,830 3,830 Total current assets
3,828,146 2,874,468 Investment in partnership 4,131,060
2,571,253 Marketable debt and equity securities - at cost 8,202,631
9,173,122 Land 234,939 234,939 Levees and office furniture and
equipment 314,943 307,323 Accumulated depreciation (312,538 )
(303,454 ) Total assets $ 16,399,181 14,857,651
Liabilities and Stockholders' Equity Current liabilities:
Income taxes payable $ 599,250 14,386 Accrued expenses 35,893
20,526 Other current liabilities 4,608 4,608 Total
current liabilities 639,751 39,520 Stockholders'
equity:
Common stock, $0.001 par value.
Authorized, 20,000,000 shares; issued 2,851,196 shares;
outstanding, 2,715,028 and 2,716,028 shares in 2013 and 2012,
respectively
47,520 47,520 Retained earnings 16,169,535 15,212,071
Treasury stock, 136,168 and 135,168 shares
in 2013 and 2012, respectively, at cost
(457,625 ) (441,460 ) Total stockholders' equity 15,759,430
14,818,131 Total liabilities and stockholders' equity $
16,399,181 14,857,651
BILOXI MARSH LANDS CORPORATION Statements of
Revenues and Expenses - Income Tax Basis Years ended December 31,
2013 and 2012
3 Months
Ended 12 Months Ended December 31 December
31 2013 2012 2013 2012
Revenues: Oil and gas royalties $ 137,820 162,588 614,690
553,326 Severance taxes (4,947 ) (8,680 ) (28,501 ) (30,767 ) Oil
and gas royalties, net 132,873 153,908 586,189 522,559
Surface rentals 50,000 50,000 50,000 50,000
Total oil and gas revenues 182,873 203,908
636,189 572,559
Other income
(loss): Income (loss) from investment in partnership (1,002,380
) 202,345 (1,740,193 ) (714,604 ) Dividends and interest income
37,549 67,400 164,275 199,024 Gain on settlement 3,189,681 -
3,189,681 - Gain (loss) on sale of securities 214,126 (191,686 )
2,072,125 23,630 Surface rentals 17,328 19,597 29,003 31,772 Other
6,150 6,060 24,600 85,916 Total
other income (loss) 2,462,454 103,716 3,739,491
(374,262 ) Total revenues and income 2,645,327
307,624 4,375,680 198,297
Expenses: Total expenses 460,015 347,665
1,116,014 983,083 Net income (loss) before
income taxes 2,185,312 (40,041 ) 3,259,666 (784,786 )
Income taxes: Income tax expense (benefit) 667,516
(31,615 ) 808,937 (324,151 ) Net income (loss)
$ 1,517,796 (8,426 ) 2,450,729 (460,635 ) Net
income (loss) per share $ 0.56 - 0.90 (0.17 )
Biloxi Marsh Lands CorporationColleen Starks, 504-837-4337
Biloxi Marsh Lands (CE) (USOTC:BLMC)
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