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March 17, 2008

To the Shareholders of Biloxi Marsh Lands Corporation:

We are pleased to report that 2007 was the twelfth consecutive profitable year for your Company. Total revenue for the year ending December 31, 2007 was $4,639,317 compared to total revenue of $9,578,519 in 2006. The annual revenue breakdown is as follows: 2007 revenue from oil and gas activity was $4,861,263 compared to revenue of $8,662,416 in 2006. For 2007 total revenue includes a $974,359 loss emanating from partnership income which represents the Company’s interest in B&L Exploration, LLC compared to income of $169,659 in the same category for the prior year. Dividend and interest income for 2007 was $521,942 compared to $790,481 for 2006. In 2007 we incurred a cumulative gain from the sale of investment securities in the amount of $208,600 as compared to a cumulative loss from the sale of investment securities $59,088 in 2006. Meanwhile, expenses for the year totaled $1,432,138 compared to $1,640,095 for the prior year. For the year net earnings were $2,340,175 or $.85 per share compared to $5,551,599 or $2.02 per share in 2006. Due to the Company’s earnings exceeding the revenue threshold tests under the income tax regulations, the Company was required to file its income tax returns using the accrual basis of tax accounting. In order to achieve consistency in reporting, effective January 1, 2007, the Company has changed its method of financial reporting from the cash receipts and disbursements method of reporting to the accrual method of reporting. For comparative purposes we have adjusted our Statement of Revenues and Expenses and Retained Earnings for 2006 to reflect the accrual method of reporting. The change in our reporting method has no material effect on our cash flows.

We reported at the end of 2005 that the Company had approximately 82,000 acres open and available for exploration and development. This clearly indicated the need for management to take steps to jumpstart drilling activity. In December of 2006 we announced the formation of B & L Exploration, LLC (BLX) of which the Company owns 75% with the remaining 25% being owned by Lake Eugenie Land & Development, Inc. (LKEU). BLX subsequently placed drilling packages with the Manti Group and a group led by Kaiser-Francis Gulf Coast, Ltd and Gulf Production Company. As the result of the placement of these drilling packages BLX participated in the drilling of five wells during 2007 with three wells being successfully completed and two wells being abandoned as dry-holes. During the fourth quarter of 2007 two of these wells were placed on production and as of December 31, 2007 were producing natural gas at a combined daily rate of approximately 8.5 mmcf with net daily production accruing to BLX of approximately 1.6 mmcf. The third well is awaiting the construction of a pipeline. We anticipate that the pipeline should be completed and this well placed on production by the end of the second quarter of 2008. All three of these wells are located off of Company property in state waters and represents the first time that the Company has had royalty revenues from sources outside the boundaries of our property. BLX is scheduled to participate with the group led by Kaiser-Francis and Gulf Production in the drilling of two additional wells during the first half of 2008 and is working independently on the development and placement of additional shallow and deep prospects.

On January 31, 2008 we announced our participation in the NAPE Expo in Houston, Texas. With the assistance of BLX’s technical consultants we presented acreage under control of BLX showing two Tuscaloosa prospects (Alpha and Beta) developed over the past 12 to 18 months using existing geological well control and 3D seismic data (see the Company’s website www.biloximarshlandscorp.com). While we are encouraged by the interest expressed in these prospects during the NAPE Expo and subsequent follow up, these deeper Tuscaloosa prospects are much more difficult to place than the shallower drilling packages previously placed by BLX.

As of December 31, 2007 the combined gross daily production rate from 9 wells operated by the Company’s mineral Lessees was approximately 14.6 million cubic feet (mmcf) with net daily production accruing to the Company of approximately 1.5 mmcf. Combining this daily natural gas production with the Company’s proportional share of the daily production from the two new BLX wells makes the total net daily production accruing to the Company as December 31, 2007 approximately 3.1 mmcf, an increase over the 2.4 mmcf cumulative daily production accruing to the Company at the end of 2006.

The Company again commissioned T. J. Smith & Company, Inc., independent reservoir engineers, to complete a proved reserve study. This reserve study estimates that as of December 31, 2007 the Company’s “Developed Producing” (PDP) reserves are .914 billion cubic feet (bcf) of natural gas and estimates that the “Developed Non-Producing” (PDNP) reserves are .622 bcf, with the “Proved Un-Developed” (PUD) reserves being 1.012 bcf, totaling 2.549 bcf of estimated proved reserves (see “Appendix A” for definitions of reserve classifications). While for the years ending 2006 and 2007 the total amount of proved natural gas reserves remained constant at approximately 2.5 bcf the “Proved Developed Producing” (PDP) reserves actually decreased year over year from approximately 1.5 bcf to .91 bcf, a decrease of .59 bcf in PDP reserves (see note 5 below). Additionally, this reserve study estimates that slightly more than 26% of the PDP and PDNP reserves directly attributable to the Company will deplete by the end of 2008.

Please find the following table showing the Company’s proved reserves as of December 31, 2007:

Proved Reserves as of December 31, 2007 (3), (5) ___________ _____

Developed Developed Proved
Producing (PDP) Non-Producing (PDNP) Un-Developed (PUD) Total
(Dollars in thousands)
Net Proved Reserves (1):

Natural Gas (BCF): .9144 .6223 1.0121 2.5488

Estimated Future Net Revenues (before income taxes) (2):…………………. $ 16,861 (4)

Estimated Discounted Future Net Revenues (before income taxes) (2):……. $ 12,553 (4)
______________
(1) In general, our engineers based their estimates of economically recoverable oil and natural gas reserves and of the future net revenues therefrom on a number of variable factors and assumptions, such as historical production from the subject properties, the assumed effects of regulation by governmental agencies and assumptions concerning future oil and natural gas prices, all of which may vary considerably from actual results. All such estimates are to some degree speculative, and classifications of reserves, that are based on the mechanical status of the completion, may also define the degree of speculation involved. For these reasons, estimates of the economically recoverable oil and natural gas reserves attributable to any particular group of wells, classifications of such reserves based on risk of recovery and estimates of the future net revenues expected therefrom, prepared by different engineers or by the same engineers at different times, may vary substantially. Therefore, the actual production, revenues, and severance taxes with respect to reserves likely will vary from such estimates, and such variances could be material.

Estimates with respect to proved reserves that may be developed and produced in the future are often based on volumetric calculations and by analogy to similar types of reserves rather than actual production history. Estimates based on these methods are generally less reliable than those based on actual production history, and subsequent evaluation of the same reserves, based on production history, will result in variations, which may be substantial, in the estimated reserves.

In accordance with applicable requirements of the Commission, the estimated discounted future net revenues from estimated proved reserves are based on prices as of the date of the estimate. Actual future prices may be materially higher or lower. Actual future net revenues also will be affected by factors such as actual production, supply and demand for oil and natural gas, curtailments or increases in consumption by natural gas purchasers, changes in governmental regulations or taxation and the impact of inflation on costs.

(2) The Estimated Discounted Future Net Revenues represents the Estimated Future Net Revenues before income taxes discounted at 10%. For calculating The Estimated Future Net Revenues and the Estimated Discounted Future Net Revenues, we used the price as of December 31, 2007 which was $6.788 per mmcf of natural gas.

(3) The Meridian Resource and Exploration, LLC and Manti Jamba, Ltd. separately operate the various producing wells. The Company has no control over operations and maintains only a landowner’s mineral royalty interest. Please see footnote (i) following the final paragraph of this letter for a warning concerning forward-looking information.

(4) The value of the proved reserves “Undiscounted, M$” and “Discounted at 10%, M$” includes a minimal amount of Oil and Condensate as well as Natural Gas Liquids.

(5) The majority of “Proved Reserves as of December 31, 2007” and the related “Estimated Revenues” are “Proved Undeveloped” (PUD). The increase in this category over last year’s PUD reserves was based on an increase of the Company’s ownership interest in this category of reserves, not new discoveries. As is typical to PUD reserves there is currently no production related to this category and additional development drilling is necessary for production to commence. As of the date of this letter, there is no additional development drilling scheduled.

In addition to the foregoing estimated proved reserves, based on another proved reserve study completed by T. J. Smith & Company, Inc., as of December 31, 2007 the BLX’s estimated proved reserves were 1.0263 billion cubic feet (bcf) of natural gas which, using the December 31, 2007 SEC price $6.788 per mmcf, equates to “Estimated Future Net Revenues” of $5.26mm with an “Estimated Discounted Future Net Revenues” of $4.66mm (see note 2 above). Based upon the Company’s seventy-five percent ownership of BLX the estimated reserves allocated to the Company are .77 bcf of natural gas which equates to “Estimated Future Net Revenues” of $3.95mm with an “Estimated Discounted Future Net Revenues” of $3.5mm (see note 2 above). Combining the proved reserves in the foregoing table on page 2 with the Company’s portion of BLX’s estimated reserves makes the total estimated proved reserves accruing the Company 3.3 bcf of natural gas which equates to “Estimated Future Net Revenues” of $20.81mm with an “Estimated Discounted Future Net Revenues” of $16.05mm (see notes 2 & 5 above).

As previously reported, there is currently pending a possessory action suit which was filed by the Company on or about November 2, 2001 as the result of disturbances in the Company’s possession of Sections 1, 2 & 3, T13S, R16E due to protective oil, gas & mineral leases granted to Manti Resources, Inc. (Manti) by particular Manuel Molero family members and also to Louis and Gustave Carmedelle family entities. Further disturbance in possession is the result of seismic permit/lease options and protective leases granted by the same parties to The Meridian Resource & Exploration LLC (Meridian) for disputed and productive acreage outside of the Manti lease. The Manuel Molero family members filed a declaratory judgment action with regard to the same acreage, which action was consolidated with the Company’s possessory action. Additionally, Manti filed a concursus proceeding, and deposited funds into the registry of the court representing royalties attributable to the conflict acreage in the producing unit. Meanwhile, Meridian has also filed concursus proceedings with respect to additional producing units formed which contain conflict acreage. Consolidation of the concursus proceedings with the possessory action and declaratory judgment action above mentioned has been granted by the court. Management intends to vigorously pursue the Company’s possessory action and vigorously defend against the Molero family members’ declaratory judgment action. During 2007, discovery was conducted by the Company’s attorneys as preparations for trial of the aforesaid litigation continues.

The Carmadelle entities continued their strategy of attempting to have the trial court determine an issue related to title. In 2007, for the fifth time, the Louis and Gustave Carmadelle family entities, yet again, tried to have the issue of their title litigated prior to the determination of the Company’s possessory action by filing new litigation in the United States District Court in New Orleans against the Company, Manuel Molero family members, the Assessor of St. Bernard Parish, the Sheriff of St. Bernard Parish and the Clerk of Court of St. Bernard Parish. The Company immediately moved to have this new suit dismissed or, in the alternative, have the federal court abstain from hearing the new lawsuit because of the pending state court litigation. The case was initially assigned to Judge Ginger Berrigan and later re-assigned to Judge Thomas Porteous. The Louis and Gustave Carmadelle family entities then filed a motion to recuse Judge Porteous which the Company and the Manuel Molero family members opposed. In February of 2008, such motion to recuse was denied. After several continuances, the Company’s motion to dismiss or to abstain is currently set for hearing in March of 2008. The Company intends to vigorously defend this litigation while exploring all avenues of bringing this matter to resolution.

In addition to the above described competing claims to the subject acreage, there are also competing claims between the Company and the State of Louisiana regarding certain tracts within each producing unit (“Concursus Proceedings”). The object of the Concursus Proceedings is to determine whether the State or the Company is entitled to the royalty on production attributable to the disputed acreage. The judgments ultimately rendered in these proceedings will order the distribution of royalty proceeds currently being deposited into the Registry of the Court. There is no potential in any of the litigation, including the Concursus Proceedings for rendition of an adverse judgment requiring the payment of Company funds. As of December 31, 2007, the Company’s potential share of the funds deposited in the various concursus’ accounts (if the Company is successful in winning all of the issues raised in all of the aforesaid litigation proceedings) is approximately 48 million dollars.

The timing of the resolution of the competing claims was impacted substantially by the effects of Hurricane Katrina on several of the witnesses involved and by damage to the St. Bernard Parish Courthouse and the records of the St. Bernard Parish Clerk of Court. As of the date of this letter the courtroom facilities have been adequately repaired and the Company does not anticipate any additional delays due to hurricane related issues.

For these reasons, as of the date of this report, there is no way to forecast a timetable for the conclusion of the Company’s possessory action, the Manuel Molero family members’ declaratory judgment action, the Louis and Gustave Carmadelle family entities’ federal court action and the Concursus Proceedings.

Prior to 2004 the Company paid one dividend each year. During 2007 the Company returned to this custom of paying one dividend per calendar year, paying $1.00 per share of outstanding common stock or $2,754,428 in December of 2007. It is anticipated that the custom of paying one dividend per calendar year will be followed in 2008. It should be noted that the Company paid a dividend equating to slightly more than its net earnings during 2007 and since 2002 the Company has paid close to $36,000,000 in total dividends.

We reported in last year’s President’s letter that prior to Hurricane Katrina we retained the services of T. Baker Smith, Inc. to develop The Biloxi Marsh Stabilization and Restoration Plan. After Hurricane Katrina we extended the scope of this project and retained additional technical experts to assist in formulating The Biloxi Marsh Stabilization and Restoration Plan. To enhance the surface of our property management is working closely with local, state and federal officials in an attempt to influence any restoration projects that may take place on or near the Company’s property. As we continue to participate in the coastal restoration process The Biloxi Marsh Stabilization and Restoration Plan is proving to be a valuable tool to foster our participation and guide spending on restoration projects. During 2007 the State of Louisiana awarded the design contract for a major fresh water diversion from the Mississippi River into the St. Bernard Parish marshes at Violet, Louisiana to a group lead by Arcadis, US and T. Baker Smith, Inc. Not only was the Violet diversion a major component of our restoration plan Arcadis, US and T. Baker Smith, Inc. led the team of experts that we assembled to develop The Biloxi Marsh Stabilization and Restoration Plan. The awarding of this contact signals the initial success of our coastal restoration strategy and positions the Company favorably in the efforts to restore the marshes of St. Bernard Parish. A complete copy of The Biloxi Marsh Stabilization and Restoration Plan is available on our website www.biloximarshlandscorp.com .

We regret to inform you that one of our Directors and our Treasurer, Philip I. Zollinger, died Saturday, March 8, 2008 of a heart attack at the age of 55. Phil was a friend whose dedication to his friends and to the Company will be greatly missed by all. We extend our sincere sympathies to his family.

We remind our shareholders that St. Bernard Parish, Louisiana, the Parish where our property is located, was indescribably devastated by Hurricane Katrina and is struggling to recover. To assist in the Parish’s rebuilding the Company has established and funded the Biloxi Marsh Disaster Relief Fund Company. Detailed information about the fund is available on its website www.selarelief.com. During 2006 the fund applied for and received IRS 501 (c) (3) tax exempt status making all contributions to the fund tax deductible. Those living outside the hurricane affected zone and all interested parties are asked to remember the people of St. Bernard Parish, Louisiana by donating to the Biloxi Marsh Disaster Relief Fund Company. You may send a check to the fund at the Company’s address or contribute using a credit card on the Fund’s website: www.selarelief.com

Please remember to visit our website, www.biloximarshlandscorp.com to obtain general information about the Company as well as recent historical annual reports and all historical press releases. We strongly recommend that all interested parties become familiar with the information available on the Company’s website: www.biloximarshlandscorp.com . 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.

We are pleased with the initial success of BLX and the corresponding increase in daily production rates and addition of proved reserves. We plan to continue to focus on our key asset which is Company’s property while using all the assets at our disposal to find opportunities that will increase shareholder value. We are hopeful that 2008 will be another successful year.

Sincerely,

William B. Rudolf
President and Chief Executive Officer
Metairie, Louisiana
Email: wrbiloxi@bellsouth.net

PLEASE SEE PDF “BUTTON” ABOVE FOR ENTIRE RELEASE INCLUDING FINANCIAL TABLES

This letter 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; additional drilling, 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 “hopeful”, “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.