Metairie, LA., August 12, 2011 (BUSINESS WIRE) – 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.
Contact:
Biloxi Marsh Lands Corporation
Colleen Starks: 504-837-4337