Metairie, LA., October 28, 2011 (BUSINESS WIRE) – Biloxi Marsh Lands Corporation (PINK SHEETS: BLMC) today announces its unaudited results for the third quarter and first nine months of 2011 and provides update. The Company’s direct net oil and gas revenues generated from its fee lands were $307,632 for the third quarter of 2011 compared to $439,453 for the third quarter of 2010. For the first nine months direct oil and gas revenues increased to $1,176,421 from $1,085,389 for the same period of 2010. During the third quarter, revenues from Dividends and Interest, Gain on Sale of Securities and Miscellaneous Income decreased to $135,198 from $183,490 for the third quarter of 2010. Meanwhile, for the first nine months of 2011 Dividends and Interest, Gain on Sale of Securities and Miscellaneous Income increased to $833,288 from $370,704 for the first nine months of 2010.
During the third quarter, the Company incurred a loss of $687,747 emanating from partnership income which represents the Company’s investment in B&L Exploration, LLC (B&L). This compares to a net gain of $53,056 in the same category for the third quarter of 2010. The loss emanating from the Company’s investment in B&L is directly related to B&L drilling four wells during the second and third quarters 2011 and completion cost related to three of these four wells. As previously reported, this means that three wells are being or have been completed as commercial oil and gas wells and one well was plugged and abandoned as a dry-hole. It is important to note that a major component of the $2,462,807 loss reported for the first nine months of 2011 includes $1,000,451 in Depreciation, Depletion and Amortization.
The Company’s operating expenses for the third quarter of 2011 were reduced to $195,300 compared to $225,694 for the same period of 2010. The Company had a net loss of $175,299 or $.06 per share for the third quarter of 2011 compared to a profit of $315,241 or $.11 per share for the same period of 2010. For the first nine months of 2011 the company’s net loss was $746,189 or $.27 per share compared to a net profit of $551,790 or $.20 per share for the first nine months of 2010.
As of September 30, 2011 the combined gross daily production rate from 4 wells operated by the Company’s mineral Lessees was approximately 7.04 mmcf of natural gas with net daily production accruing to the Company of approximately 947 mcf. 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 September 30, 2011 approximately 3.8 mmcfe (million cubic feet of natural gas equivalents) per day.
B&L was very active during the first nine months of 2011, as previously reported B&L participated in the drilling of four wells during the second and third quarters with three being completed as commercial oil and gas wells. As of the date of this report only the Harry Bourg No. 1 well has been placed on production, while the SL 19076 No. 1 Well and the Continental Land & Fur (CL&F) No. 1 Well have been successfully flow tested, and are awaiting facility construction and hook up.
B&L placed its Harry Bourg Corporation No. 1 Well on production on September 13, 2011. Initial production rates from this well were approximately 2.0 mmcfg/day on 10.5/64th choke with a flowing tubing pressure (FTP) of approximately 3,840psi. The condensate yield is approximately 120 bbls per 1.0 mmcfg. B&L is the Operator of the Harry Bourg No. 1 well and currently has a 28% working interest.
On September 24th and 25th Clayton William Energy (CWE), the Operator of the SL 19076 No. 1 Well, successfully flow tested the lower three sand intervals. During the flow tests all three intervals produced natural gas and natural gas liquids with very little draw pressure down indicating that all three zones are commercial. As previously reported, electric logs indicate approximately 220 net feet of pay in 7 different sand intervals. The upper 4 pay zones will be perforated and flow tested at a later date. CWI advises that the well should be placed on production from the lower zone during late December 2011 or early January 2012. B&L currently has a 15% non-operating working interest in this well.
The CL&F No. 1 Well was flow tested on September 27th. This well is operated by Forza Operating Company (Forza). Electric Logs indicated approximately 8’ of pay with sidewall cores indicating condensate. During the flow test, this well flowed at a sustained rate of 1.5 mmcfg/day, 140 bbls of natural gas liquids and no water production with a FTP of 7360psi on 7/64th choke. Forza estimates that this well will be placed on production during the first Quarter of 2011. B&L has a 9.375% non-operating working interest in this well.
As of October 16, 2011 the combined gross daily production rate from 6 wells in which B&L has a working interest was approximately 12.4 mmcf of natural gas and 338 barrels (bbls) of oil and natural gas liquids with net daily production accruing to B&L of approximately 2.7 mmcfg and 66 bbls of oil and natural gas liquids. 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 October 16, 2011 approximately 4.1 mmcfe (million cubic feet of natural gas equivalents) per day.
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 the development of additional prospects on our fee lands. Despite the relatively low natural gas pricing environment, we continue to actively market 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: “While we continue to work on refining our fee based land prospects through seismic reprocessing, geological and geophysical interpretation, we are pleased with the initial flow rates of B&L’s Harry Bourg No. 1 well. This well’s high condensate yield is notable. We are also pleased with the results of the flow tests on B&L’s SL 19076 No. 1 and the CL&F No. 1 wells. The SL 19076 No. 1 represents a fairly significant discovery for B&L and should, along with the other recent discoveries, be additive from both a proved reserve and revenue perspective. B&L’s diversification into different geographic areas within southern Louisiana with oil/condensate production should help us during this period of relatively low natural gas prices compared to oil prices. For an entity in its infancy, B&L has performed well allowing the Company to transform from a self-liquidating mode into a growth mode. The tax efficiencies created by our investment in B&L combined with its diversified production are additional benefits and create an opportunity to continue B&L’s drilling program during 2012.”
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.
Biloxi Marsh Lands Corporation
Colleen Starks: 504-837-4337