Penny Roger$
13 years ago
Biloxi Marsh Lands Corporation Announces Unaudited Results for the Second Quarter and First Six Months of 2011 and Provides Update
| 7:30 AM |
METAIRIE, La.--(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
Related News: Similar Content http://feeds.businesswire.com/click.phdo?i=c16435a77f071d5e24dc1c97c09d841a#rssowlmlink
BLMC Security Details
Share StructureMarket Value1 $31,675,922 a/o Aug 11, 2011
Shares Outstanding 2,754,428 a/o Mar 18, 2005
Float Not Available
Authorized Shares Unlimited a/o
Par Value 0.001
http://www.biloximarshlandscorp.com/
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tuscadeep
18 years ago
Re: Archtop @ 5 TCF Upside Potential?
Pothole Dodger's post 5411 from TMR Investor Village message board is intriguing:
"Archtop Number's Game
A while back I stated to the effect that it would be foolish to try to put reserve numbers on Archtop. Since I'm foolish ...
TMR says the structure is 14,400 acres and there is 8000' of vertical prospective section. Now, where within that 8000 feet reservoir sands might occur (if at all), or how thick they might be, is anyone's guess ... there's no nearby well control to offer a clue. Suppose 1% of that 8000 ft has reservoir quality sand ... and that sand's loaded up. Also suppose you can recover 2000 mcf/ acre-foot of reservoir.
14,400 acres x 80 ft. x 2000 mcf/ac-ft = 2.304 TCF Hmmmm....
Now, suppose 2% of the section is productive and the recovery is 10% more optimistic:
14,400 acres x 160 ft. x 2200 mcf/ac-ft = 5.069 TCF.
Now, suppose ...”
Source: Pothole Dodger's post 5411 from TMR Investor Village message board
v-investor
18 years ago
To determine if BLMC is a value investment, there is only one operative and relevant question to answer: how much gas is on the remaining BLMC acreage? Every other question about this company is just noise. If the 3D seismic recently completed were to show significant gas reserves, then of course this could become a very significant "value play" assuming, as stated previously, that the stock price does not appreciate to reflect the value of the known reserves. With “proven” gas reserves, things like lease rates, pipelines, selling 3D seismic data become part of the value analysis, but they are of secondary consideration.
To the extent there is no gas or insufficient gas on the remaining acreage to justify leasing and drilling to any great extent, then the price at which acreage is leased becomes irrelevant. The value of a pipeline in marsh lands with little or no gas is of little value, probably not even as scrap given the cost of removal. The value of 3D seismic data on marsh lands with little or no gas probably has low resale value, if any.
Finally, the genesis of my handle name, how I learned about the stock, why I am intrigued by the stock, whether or not I own stock in BLMC or TMR, whether or not I am directly or indirectly involved in either company is hardly relevant to the fundamental question that needs answering if BLMC is to be considered a value investment vs. a speculative one.
This dialogue needs to focus specifically on trying to ascertain the results of the 3D seismic on BLMC’s remaining acreage.
tuscadeep
18 years ago
Continuing questions from my most recent post,
BMLTEN, how did you come up with your author name? Do you have a financial/ownership interest, either directly or indirectly, in the BML? Are you affiliated with anyone that does?
Assuming extensive hydrocarbons on BLMC land, what valuation do you place on BLMC’s possession of extensive 3-D seismics on BLMC land, seismic data from BLMC’s sister company, Lake Eugenie as well as 3-D seismic data, as well as seismic data extending one mile in every direction from that land?
What valuation do you place on the extensive pipeline infrastructure on BLMC land?
I hadn’t placed a valuation on these assets since, when I did my valuation analysis, I took the extremely conservative approach of assuming no hydrocarbons on BLMC land.
In your valuation analysis, how did you determine a base lease rate of $265/acre? Are you basing this on prior TMR bonus payments to BLMC?
How does your lease valuation rate change for land on which BLMC’s geologist and or geophysicist can identify specific prospects based upon BLMC’s reworked 3D seismics?
v-investor
18 years ago
I welcome this dialogue.
In the William Rudolf’s letter to shareholders in the 2005 annual report, he states “The primary term of the lease between the Company and Meridian expired on December 15, 2005.” In his letter to shareholders for the six month period ending June 30, 2006, he states, “Due to the expiration of the lease agreement between the Company and its major Lessee [TMR] no delayed rental payments were due during the first half of 2006.” TMR has told me they are not drilling any new wells on BLMC land.
Nowhere does Rudolf say why the primary term of the lease was not extended. If there was a negotiation between TMR and the Company, it would appear that they could not come to terms. This is very curious given that both parties had access to the same 3D seismic data and given the fact that TMR has invested so heavily in i) completing 140+squares miles of 3D seismic ii) drilled several successful wells and iii) put in ~ 7 miles of pipeline. Given TMR’s investment in BLMC property, it would seem they would be in the best position to assess the data and try to generate incremental return on their existing investment rather than go someplace else.
The existing reserves of all operating wells on BLMC property are running down and this is being reflected in the revenue line as evidenced in the third quarter report 9/30/06: third quarter revenues of $2.7mm vs. $5.3mm for the third quarter 20005. Rudolf in his third quarter letter to shareholders states: “While we are keenly aware of the declining production rates of our older wells, we are encouraged by the execution of the two new Oil, Gas and Mineral Leases.”
I agree that two new leases are a positive thing. I also agree that Manti is a reputable company. But the latter two “positives” still do not turn BLMC into a value play. The
fact remains, that BLMC is not signing new leases at a rate to make up for the declining production despite the Company’s marketing efforts at NAPE.
As stated in my previous post, this does not become a value play until you can “prove” there is gas in the ground. Manti’s two new wells and further exploration efforts while positive steps is not evidence. At this point, putting a value on the future gas potential of the BLMC property beyond the current proven reserves is pure "speculation." If the results of the 3D seismic were to show significant gas reserves, then of course this could become a "value play" assuming the stock price did not appreciate to reflect the value of the known reserves.
What I am most interested in learning is the results of BLMC’s 3D seismic. I look forward to your continued comments.
tuscadeep
18 years ago
Thanks for your astute questions and “rough” valuation analysis.
The assumption, however, that “TMR has decided not to continue drilling on BLMC property” is misleading. Your conclusions based upon that fallacious assumption are thus inaccurate.
TMR wanted to lease BLMC property, but BLMC decided not to enter into leasing arrangements with TMR.
TMR still has BLMC acreage under production and under the secondary term of lease.
Per the 3rd quarter report, BLMC recently granted “two new Oil, Gas and Mineral Leases.”
Based on recent filings with the Louisiana Dept. of Natural Resources, Manti Exploration is planning new exploration on BLMC land: http://sonris-www.dnr.state.la.us/sundow...
This is significant since Manti is a highly reputable operation having extensive and impressive experience in oil and gas exploration. See: http://www.mantires.com/
Note that Manti has extensive experience on BLMC land (BML 1 and 3 Wells).
I plan to address your BLMC questions and valuation analysis in upcoming posts. However, I’m inclined to prepare a more in depth response to your queries after BLMC issues its annual report which is scheduled for release on 2/23/07.
I look forward to further dialogue with you.
v-investor
18 years ago
Questions Regarding BLMC Valuation:
1. The key to understanding the future value of BLMC is in understanding the results of the 3D seismic shot by TMR. While the results of BLMC's analysis are not public, we do know that TMR has decided not to continue drilling on BLMC property. There are a couple of conclusions one might draw from TMR's decision: i) there is not enough remaining gas on BLMC property to make a further drilling investment despite all the infrastructure and investment they have made or ii) TMR's survey which extended beyond BLMC's property showed greater drilling potential outside of BLMC's land than inside their property so TMR went to "greener" pastures.
2. Notwithstanding page 43 of the 1994 "US Fish and Wildlife Service 1994 Draft" in identifying the sale value for wetlands, on what basis is wetlands without any mineral rights worth $300-$400 per acre? Who would pay this price? Are all 90,000 acres of equal value? Have you spoken to any real estate brokers as to the market price of wetlands located both close to shore and far from shore to obatin a "sanity check" on this valuation estimate?
3. How does government money invested in the restoration of wetlands give those wetlands any commercial value to BLMC or someone wishing to buy those acres from BLMC?
4. Not knowing if i) TMR's 2.3TCF becomes a "discovery" ii) that this discovery goes onto BLMC land and iii) the results of the 3D seismic performed on BLMC's land collectively makes an investment in BLMC a speculative play not a value investment. I see the tangible value of BLMC as approxiamtely $28.00 per share determined as follows:
As of 9/30/06
~$18.0mm Cash and equivalents plus gains (aftertax)
~$16.8mm Aftertax PV of the Possessory Action Suit assuming (100% probability of success an aggressive assumption, 2 yrs. to resolve, 4% per year interest income on funds held in trust, $legal costs of $1mm, 10% discount rate and 33.7% tax rate)
~$32.8mm of value in remainig proven reserves (Tuscadeep's original assumption)
~$10.4mm Aftertax PV of leasing 100% of the remaining 81,800 acres of unleased land assuming acres are leased evenly over 10 years with lease rates growing at 4% per year from a starting average base lease rate of $265/acre, 33% tax rate and a 10% discount rate.
I have not put any value of on the future gas potential of the BLMC property beyond the current proven reserves as this would be "speculative." If the results of the 3D seismic were to show significant gas reserves, then of course this could become a "value play" assuming the stock price did not appreciate to reflect the value of the known reserves.
I would welcome everyone's feedback on this rough analysis.
tuscadeep
18 years ago
BLMC Land Valuation Revisited
My conservative valuation of BLMC land is derived from an article entitled “No Time To Lose, Facing the Future of Louisiana and the Crisis of Coastal Land Loss.” http://64.233.167.104/search?q=cache:rEa...
df+%22No+Time+to+Lose%22%2B%22Future+of+Louisiana%22&h l=en&gl=us&ct=clnk&cd=1
On page 43 of that study, the author cites the “U.S. Fish and Wildlife Service 1994 Draft” in identifying Sale Value for Wetlands. Sale Value in 1994 was “$200-300 per acre”.
The article also indicates a “public value” of $4,300 per acre.
I don’t believe these valuations include mineral rights. In 1994, BLMC land was not being explored and developed.
Note, in Louisiana, "landowners may convey, reserve, or lease their right to explore and develop their land for production of minerals. This right to explore and develop reverts back to the landowner if no exploration or production occurs within ten years ….”
Oil and Gas at Your Door? A Landowner’s Guide to Oil and Gas Development,
http://64.233.167.104/search?q=cache:3gk...
LOguideCh2.pdf+%22mineral+rights%22%2B%22Louisiana%22% 2B%2210+years%22%2B%22reve
rts+back%22&hl=en&gl=us&ct=clnk&cd=2.
Restoration costs of marsh land are delineated in The Biloxi Marsh Stabilization and Restoration Plan. Overall, restoration costs will run between $2,560 and $5,535 per acre. See
http://www.biloximarshlandscorp.com/rest...
Projecting what BLMC's land valuation would be once the restoration plan is implemented would be purely speculative. Perhaps one could utilize standard appraisal practices which would consider costs of restoration as one variable in determining value.
Overall, however, BLMC land would become more valuable. The risks of another Katrina would be drastically reduced. The rebuilding of New Orleans would be accelerated.
Erosion of marsh land would be eliminated and actually reversed. The stage would be set for even greater mineral rights opportunities for future generations.
The key underlying value of BLMC, however, will be the extent of hydrocarbons beneath BLMC’s extensive acreage.
tuscadeep
18 years ago
VALUATION UPDATE ON BILOXI MARSH LANDS CORP: BLMC:PK
With natural gas prices surging 14% on 7/31/06 to $8.21, I’ve prepared a Valuation Update on Biloxi Marshlands Corp.: BLMC.pk
Biloxi Marsh Lands Corp.(BLMC) VALUATION
Equity as of 6/30/06 $17.4 Mil.
Unrealized Gains in
Marketable Securities $1.6 Mil.
Possessory Action Suit $27 Mil. to $35 Mil.
Proved Reserves as of
12/31/05 Disc. Future Rev
Based on $8.21/MMBtu
(Assumes lst & 2nd
Q 06 reserves are replaced) $37.5 Mil.
Land Value* $27 Mil. to $84 Mil.
Valuation Total $110.5 Mil. to $175.5 Mil.
BLMC’s Market Cap is 93.0 Million, less than my conservative valuation estimates. The conservative BLMC valuation assumes no further natural gas leases or exploration on BLMC land outside of proven reserves as of 12/31/05.
*In addition, the land valuations may be extremely conservative, especially if BLMC’s restoration plan is even partially funded. Based on the Restoration Plan, Projected Restoration Costs for BLMC land would range from $230 Million to $498 Million! Per the most recent press release: “After several meetings with the Louisiana Department of Natural Resources (LADNR), including one with the Secretary, it appears that LADNR is going to adopt key components of The Plan as part of its plan for restoring the southeastern Louisiana coast.” See: http://www.biloximarshlandscorp.com/restorationplan.htm
VALUATION PROJECTIONS IF 2.3 TCF BECOMES “DISCOVERY”
The projected valuation of Biloxi Marsh Lands Corp., BLMC, will be most dramatically affected if the 2.3 TCF potential prospect identified by TMR becomes a “discovery”. This potential prospect is in the process of being presented to the majors. (For further details see my post entitled: “2.3 TCF: #1 NG Play in the USA?”)
BLMC would receive 25% royalty interest for its portion of the 2.3 TCF underneath BLMC land. BLMC owns 90,000 acres (42.8%) of the Biloxi Marshlands Project acreage.
Should the 2.3 TCF potential prospect become a “discovery”, BLMC’s reserves will increase exponentially. Note: 1 Trillion TCF at $8.21/MMBtu (7/31/06 NG price) approximates $8.21 Billion. 2.3 TCF is therefore $18.88 Billion. If one assumes, hypothetically, that 42.8% of revenues derived from the 2.3 TCF prospect are on BLMC land (BLMC’s prorata acreage in the BML Project), with royalties of 25%, (then discounted 10% to NPV,) the potential increase in BLMC reserves to $1.82 Billion or over 48 times BLMC’s current reserves! Underlying valuation of BLMC would increase 20 fold!!
In addition, regardless of BLMC's pro-rata share of the 2.3 TCF potential prospect, one could then expect the majors to aggressively pursue other deep drilling prospects on BLMC land.
Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site:
http://www.biloximarshlandscorp.com/bmlhome.htm
tuscadeep
18 years ago
VALUATION UPDATE ON BILOXI MARSH LANDS CORP: BLMC:PK
With natural gas prices surging 14% on 7/31/06 to $8.21, I’ve prepared a Valuation Update on Biloxi Marshlands Corp.: BLMC.pk
Biloxi Marsh Lands Corp.(BLMC) VALUATION
Equity as of 6/30/06 $17.4 Mil.
Unrealized Gains in
Marketable Securities $1.6 Mil.
Possessory Action Suit $27 Mil. to $35 Mil.
Proved Reserves as of
12/31/05 Disc. Future Rev
Based on $8.21/MMBtu
(Assumes lst & 2nd
Q 06 reserves are replaced) $37.5 Mil.
Land Value* $27 Mil. to $84 Mil.
Valuation Total $110.5 Mil. to $175.5 Mil.
BLMC’s Market Cap is 93.0 Million, less than my conservative valuation estimates. The conservative BLMC valuation assumes no further natural gas leases or exploration on BLMC land outside of proven reserves as of 12/31/05.
*In addition, the land valuations may be extremely conservative, especially if BLMC’s restoration plan is even partially funded. Based on the Restoration Plan, Projected Restoration Costs for BLMC land would range from $230 Million to $498 Million! Per the most recent press release: “After several meetings with the Louisiana Department of Natural Resources (LADNR), including one with the Secretary, it appears that LADNR is going to adopt key components of The Plan as part of its plan for restoring the southeastern Louisiana coast.” See: http://www.biloximarshlandscorp.com/restorationplan.htm
VALUATION PROJECTIONS IF 2.3 TCF BECOMES “DISCOVERY”
The projected valuation of Biloxi Marsh Lands Corp., BLMC, will be most dramatically affected if the 2.3 TCF potential prospect identified by TMR becomes a “discovery”. This potential prospect is in the process of being presented to the majors. (For further details see my post entitled: “2.3 TCF: #1 NG Play in the USA?”)
BLMC would receive 25% royalty interest for its portion of the 2.3 TCF underneath BLMC land. BLMC owns 90,000 acres (42.8%) of the Biloxi Marshlands Project acreage.
Should the 2.3 TCF potential prospect become a “discovery”, BLMC’s reserves will increase exponentially. Note: 1 Trillion TCF at $8.21/MMBtu (7/31/06 NG price) approximates $8.21 Billion. 2.3 TCF is therefore $18.88 Billion. If one assumes, hypothetically, that 42.8% of revenues derived from the 2.3 TCF prospect are on BLMC land (BLMC’s prorata acreage in the BML Project), with royalties of 25%, (then discounted 10% to NPV,) the potential increase in BLMC reserves to $1.82 Billion or over 48 times BLMC’s current reserves! Underlying valuation of BLMC would increase 20 fold!!
In addition, regardless of BLMC's pro-rata share of the 2.3 TCF potential prospect, one could then expect the majors to aggressively pursue other deep drilling prospects on BLMC land.
Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site:
http://www.biloximarshlandscorp.com/bmlhome.htm
tuscadeep
18 years ago
“2.3 TCF: #1 NG Play in the USA?”
The projected valuation of Biloxi Marsh Lands Corp., BLMC, will be most dramatically affected by the results of a 2.3 TCF potential prospect identified by Meridian Resources (TMR). This potential prospect is in the process of being presented to the majors. Drilling would be at the Lower Cretaceous Interval, 25,000 feet in depth.
TMR anticipates a major will want a minimum 50% working interest (expense and revenues), TMR a 25% working interest, and a smaller player(s) the remainder. Wells drilled will approximate $25 Million per well, the first being the most expensive.
BLMC, as a landowner stands to benefit in royalties at 25% of that portion of the 2.3 TCF on its land. BLMC owns 90,000 acres of the Biloxi Marshlands Project's 210,000 acres (42.8%). At this stage, we don’t know what portion of the 2.3 TCF will be derived from BLMC land but a portion of it will be.
In addition, should the 2.3 TCF potential prospect be successful, this will open up opportunity for other deep drilling prospects on BLMC land.
Projections are difficult, but 1 Trillion TCF at $7.18/MMBTU approximates $7.18 Billion. 2.3 TCF is therefore $16.5 Billion. If one assume, hypothetically, that 42.8% of revenues derived from natural gas are on BLMC land, with royalties of 25% and then discount 10% to arrive at Net Present Value, that translates into a potential increase in the value of BLMC potential reserves of $1.59 Billion. Note that BLMC’s current market capitalization only approximates $96 Million.
What makes this more interesting, however, is “Arco drilled 3 deep wells into the Tuscaloosa formation under BML in the late 1970's-early 1980's based on 2D seismic. One of their wells hit over 30' of Tusc. pay but the casing collapsed as they tried to test it. They attempted to twin a new well to get back down to this same formation but after spending around $150mm ended up walking away….The casing collapsed under huge pressures...15000-17000# bottom hole…during completion flow tests. A replacement well could never get back down….”
Please understand this is a wildcat well; TMR has not indicated the probability of success, only that the potential far outweighs the expense.
“This is high risk, high pressure, difficult drilling but you just don't find these kind of domestic onshore opportunities with pay anymore.”
ARCO was unaware of the extent of their find. The majors will be, or are in the process of, evaluating this potential prospect.
Approval may be time consuming since the majors don’t see prospects of this magnitude in the U.S., only internationally. Thus, the expenditure involved has not been budgeted by the majors.
Should this potential prospect become a “discovery”, it will be the largest revenue producing natural gas discovery in the history of the U.S.
Also see my recent post entitled: “Biloxi Marsh Lands (BLMC) Valuation”.
tuscadeep
18 years ago
Biloxi Marsh Lands Corp.(BLMC) VALUATION
Equity as of 6/30/06 $17.4 Mil.
Unrealized Gains in
Marketable Securities $1.6 Mil.
Possessory Action Suit $27 Mil. to $35 Mil.
Proved Reserves as of
12/31/05 Disc. Future Rev
Based on $7.18/MMBtu
(Assumes lst & 2nd
Q 06 reserves are replaced) $32.8 Mil.
Land Value $27 Mil. to $84 Mil.
Valuation Total $105.8 Mil. to $170.8 Mil.
BLMC’s Market Cap is 90.9 Million, less than my conservative valuation. The BLMC valuation assumes no further natural gas leases or exploration on BLMC land outside of proven reserves as of 12/31/05.
In addition, land valuations may be overly conservative, especially if BLMC’s restoration plan is even partially funded. See: http://www.biloximarshlandscorp.com/restorationplan.htm
VALUATION PROJECTIONS IF 2.3 TCF BECOMES “DISCOVERY”
The projected valuation of Biloxi Marsh Lands Corp., BLMC, will be most dramatically affected if the 2.3 TCF potential prospect identified by TMR becomes a “discovery”. This potential prospect is in the process of being presented to the majors. (For further details see my post entitled: “2.3 TCF: #1 NG Play in the USA?”)
BLMC would receive 25% royalty interest for its portion of the 2.3 TCF underneath BLMC land. BLMC owns 90,000 acres (42.8%) of the Biloxi Marshlands Project acreage.
Should the 2.3 TCF potential prospect become a “discovery”, BLMC’s reserves will increase exponentially. Note: 1 Trillion TCF at $7.18/MMBtu (7/21/06 NG price) approximates $7.18 Billion. 2.3 TCF is therefore $16.5 Billion. If one assumes, hypothetically, that 42.8% of revenues derived from the 2.3 TCF prospect are on BLMC land (BLMC’s prorata acreage in the BML Project), with royalties of 25%, (then discounted 10% to NPV,) the potential increase in BLMC reserves to $1.59 Billion or over 48 times BLMC’s current reserves!
In addition, regardless of BLMC's pro-rata share of the 2.3 TCF potential prospect, one could then expect the majors to aggressively pursue other deep drilling prospects on BLMC land.
See my upcoming post entitled: “2.3 TCF: #1 NG Play in the USA?”
tuscadeep
18 years ago
BLMC’s 2nd Quarter, 2006 report was just released. BLMC’s earnings for the second quarter were 48 cents per share. http://biz.yahoo.com/bw/060728/20060728005366.html?.v=1
This decrease in earnings relates to Meridian Resources (TMR) strategic decision to diversify into non-conventional oil and natural gas plays. Meridian is BLMC’s primary lessee. In addition, Meridian is now focusing on the deep drilling potential in the Biloxi Marsh Lands Project.
Keep in mind, however, 80,000 acres of BLMC’s land is currently not under mineral lease. BLMC, through its retention of a geologist and geophysicist, is actively reviewing 3-D Seismic data to identify potential prospects. Expenditures focusing on taking advantage of the 3-D Seismic data have been extensive. Note, however, potential lessees on identified prospects may pay
as high as 37½% to 50% in royalties (rather than the typical 25%) to BLMC for such prospective leases.
I’ve ascertained, through extensive research
and interface, that there are potential prospects, including deep drilling prospects, within the Biloxi Marsh Lands Project. These potentially prolific areas involve the Lower Cretaceous and Tuscaloosa intervals.
Meridian is actively pursuing the 2.3 TCF potential prospect they’ve identified. This potential prospect, due to its magnitude, requires a major’s
participation. Should Meridian’s efforts be
successful, this could be the biggest natural gas revenue discovery ever in the U.S.A. (See my upcoming post: BLMC: No.1 Natural Gas Play in the U.S.A.?)
There are some aspects here that may not be apparent but will add value for the longer term. The Biloxi Marsh Stabilization and Restoration Plan could end up being extremely positive and would dramatically increase land valuation and potential should portions of the plan be
implemented through governmental funding. The plan may be reviewed on BLMC’s web site.
Frankly, I’m enthusiastic about BLMC’s potential. On a comparative basis, I’m unaware of a more attractive situation.
tuscadeep
18 years ago
TUSCALOOSA TREND OPPORTUNITY
I have a strong interest and infatuation with the Tuscaloosa sand interval opportunity in the Biloxi Marshland project.
Meridian Resources (TMR) alluded to the major opportunity involving the Tuscaloosa Sand Interval during its May 9th teleconference. This opportunity is located on the Biloxi Marshlands Corp. property and could be HUGE.
This major opportunity is also referenced BLMC’s 2004 Annual Report of Biloxi Marshlands Corp.; see www.biloximarshlandscorp.com.
That report issued by Biloxi Marsh Lands Corp. (BLMC) reads, in part, ”we believe that the development of the deeper TUSCALOOSA interval could prove to represent significant value for the Company and its shareholders.”
I noticed in early 2004, Meridian had an engineer “dedicated full time to evaluation of Tusc opportuntiies.” Does anyone know to what extent Meridian (TMR) is focusing its energies on this opportunity? Based on the May 9th conference call, this project was a high priority. Have they secured a partner as yet? How extensive is a partnership interest on the project?
Based on the TMR conference call, TMR would get a 25% take.
The land owner(s), including Biloxi Marsh Land Corp., would get approximately 25% royalty interest for revenues retrieved.
From what I understand,TMR has possession of the old ARCO logs? I’d like to know more detail about the ARCO experience. My understanding is that extensive, expensive ($50 Million in 1980s dollars), exploration took place on BLMC land. That experience and the circumstances surrounding it may shed light on the probability of Meridian’s potential success possibilities as well as the benefits to be reaped by BLMC shareholders.
If Meridian is successful with the Tuscaloosa project, we’re talking in excess of a trillion cubic feet of natural gas. I know that right now, it’s pie in the sky. But hitting the Tuscaloosa is the ultimate find. The Tuscaloosa Trend has been cited as the most signficant natural gas discovery in the U.S.
Amoco has had major success; eg. see www.gasandoil.com/goc/discover/dix83035.htm - 5k. Several articles can be retrieved on the internet relating to the Tuscaloosa Trend. The Trend is in St. Bernard Parish on Biloxi Marsh Land Corp. property. (BLMC.pk) It also is on BLMC project property owned by the State of Louisiana.
Has anyone read "No. 1 Play in the U.S.A.-Summary of Activity In the Tuscaloosa Trend of South Central Louisiana" by Frank W. Harrison, Jr.? I'd like to get access to that study.
My understanding is that 3-D Seismics were done by Meridian on BLMC property encompassing the Tuscaloosa Sand Interval as part of Phase 4. Meridian currently has a lease on a portion of that property. Biloxi Marshland Corp. took delivery of the 3-D Seismics for Phase 4 at the end of April, 2006; BLMC has retained a geologist and 2 geophysicists to evaluate the 3-D Seismics and ascertain the extent of prospect opportunities.) Also see BLMC's web site: www.biloximarshlandscorp.com.
Any further observations or insights into the Tuscaloosa opportunity are appreciated.
tuscadeep
18 years ago
BLMC Observations & Lease Opportunities
10 bagger, thanks for your comments.
If possible, please provide a bit more detail regarding “the drilling company that carries BLXI free can get a loan against them to further develop the fields.” Are you referring to TMR?
Also, sounds like you’re not impressed with TMR’s credentials. I seem to have observed extensive shareholder dissatisfaction with TMR on the Yahoo site. I believe TMR may have lost some of their key staff over the years and that may have had an impact on the results BLMC has experienced as a landowner; this turnover would obviously have also impacted TMR's results.
I perceive that TMR may have some financial difficulties even though on their conference calls they indicate they're financially strong. They appear to have pledged all of their mineral rights to financial institutions and may be too easily vulnerable to their lenders.
However, their latest strategy may be impacted by higher costs in exploring the unconventional mineral route and assumes much higher natural gas prices to result in profitability for that new strategy.
My understanding is that BLMC is marketing the land not currently leased to TMR, 82,000 acres, representing approximately 90% of BLMC’s land to other potential lessees. Hopefully, those lessees will have the financial muscle to properly explore identified prospects. Maybe we need lessees that won’t rely heavily on debt to effectively proceed with optimizing their lease opportunities.
Interestingly enough, BLMC received Meridian’s 3-D Seismic studies of Phase 3 at the end of April. Phase 3 property, which had never previously had 3-D Seismics, is extensive (in excess of 60 miles) and includes the Tuscaloosa Sand Interval property.
With BLMC having hired a geologist and two geophysicists, BLMC’s identifying ofprospects could result in royalties on newly leased property at substantially higher rates than the typical 25% take.
BLMC’s risks as a land owner are minimal. The key is identifying qualified lessees who have the potential to conscientiously pursue the opportunities regarding BLMC land.
Obviously, BLMC is limited by the boundries and resources of its properties. I look forward to future disclosure regarding the extent of hydrocarbons on BLMC property.
Once again, 10 Bagger, I appreciate your comments and insights.
tuscadeep
18 years ago
BLMC BARGAIN: COMPARISON WITH CKX & TPL
Previously, I was a major shareholder in CKX Lands. I liked the concept of a company receiving royalties from mineral rights, being a cash cow, and not having the exposure of significant expenses.
In my research, however, I found a gem that also receives its primary royalties from natural gas: Biloxi Marsh Lands Corp: BLMC.pk.
Both BLMC & CKX are similar to another company I was a shareholder in: Texas Pacific Land Trust (TPL). That stock has had a significant run over the past couple of years while both CKX & BLMC have languished. Yet, the concepts of these companies are nearly identical.
Unlike CKX and TPL, however, whose managements are passive, BLMC’s CEO is aggressively focused on maximizing shareholder value. In addition, on a comparative basis, BLMC’s P/E ratio, dividend yield, and underlying value, are dramatically more attractive as delineated in the comparison below.
Symbol Price Earn P/E Div YIELD CAP
BLMC $30.50 $5.35 5.7 $5.00 16.40% $84M
CKX $12.30 $0.83 14.8 $0.28 2.30% $24M
TPL $143.00 $4.21 33.9 $0.65 0.40% $308M
The dividend and yield on BLMC are based on the most recent 12 month period.
For 2005, the dividend was $3.25 and for 2006 to date, the dividend was $2.00.
tuscadeep
18 years ago
BLMC: The Ultimate Bargain
Biloxi Marsh Lands Corporation (BLMC.pk) is a deeply undervalued pink sheet micro-cap. Recently Clyde Milton (Cheap Stocks) submitted an interesting article to the Seeking Alpha Network regarding BLMC. http://smallcap.seekingalpha.com/article/11327.
Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site: http://www.biloximarshlandscorp.com/
BLMC was founded in 1936 and owns 90,000 acres of land in St. Bernard Parish, Louisiana. BLMC generates revenues by receiving royalties from lessee natural gas exploration of its acreage. BLMC has minimal overhead and is basically a cash cow.
BLMC’s structure is similar to CKX Lands (CKX) and Texas Pacific Land Trust (TPL).
Unlike CKX and TPL, however, whose managements are passive, BLMC’s CEO is aggressively focused on maximizing shareholder value. In addition, on a comparative basis, BLMC’s P/E ratio, dividend yield, and underlying value, are dramatically more attractive.
Price: $30/share
Dividends 2005: $3.25
Dividends 2006 to date: $2.00
Yield: 11%
Earnings for 12 mos. ending 3/31/06: $5.35
P/E Ratio: 5.6
Consider:
1. BLMC’s BALANCE SHEET
A. Land at Cost: $2.61 per acre. BLMC owns approximately 90,000 acres of marshland in Louisiana. Its key value is the potential mineral rights.
B. Marketable securities are carried at cost. Unrealized gains for 2005 total $1.6 Million.
C. Proved reserves are not included on the balance sheet. Proved reserve information is delineated on page 2 of BLMC’s 2005 annual report. The reserve study is only based on production covering 3,900 acres (4%) of BLMC’s 90,000 acres of land.
D. BLMC has no long-term debt.
2. Other Hidden Assets
A. BLMC recently received the complete data of the 3D seismic survey completed by Meridian Resources (TMR), BLMC’s primary current lessee. This data covers 314 square miles including BLMC’s 90,000 acres.
B. Phase IV, which covers approximately 48 sq. miles of BLMC property, did not previously have a 3D seismic survey done. Phase 4 includes BLMC property encompassing the Tuscaloosa sand interval.
C. “Development of the deeper Tuscaloosa and Cretaceous intervals could prove to represent significant value” to BLMC. Meridian currently has a portion of this BLMC property under lease. The Tuscaloosa opportunity could increase BLMC’s revenues and earnings exponentially!
D. The pipeline infrastructure running throughout BLMC acreage “and the right to use excess capacity and take over the pipeline after abandonment may prove to be valuable for future development of” BLMC mineral interests.”
E. BLMC’s possessory action (referenced on Page 3 of the annual report) has the potential of yielding “in excess of 28 million dollars.” The Louisiana Supreme Court recently ruled in favor of BLMC on the issue of title relating to such action. Note, however, that the State of Louisiana may have some claim to a portion of such proceeds based on water bottom rights.
F. 82,000 acres of BLMC land are “open and available for exploration and development”. BLMC has “retained the services of a consulting geologist and two geophysicists to review and reprocess the 3D data….”BLMC’s possession of the 3D Seismic studies and ability to identify additional prospects on BLMC property may enable them to receive royalties from future lessees in excess of the standard 25% due to this valuable data.
3. INCOME STATEMENT
A. Expenses are less than 7% of revenues. BLMC’s focus is on receiving royalties derived from leases on its land.
B. Salaries and bonuses are at reasonable levels.
C. During 2005, dividends distributed to shareholders were $3.25/share. “During 2006 (BLMC) intends to “equal or exceed the amount of dividends paid during 2005.” At current share levels, BLMC’s dividend yield approximates 10%.
D. Revenues for 2005 were negatively impacted by Hurricanes Katrina and Rita. Nevertheless, earnings for the twelve months ending 3/31/06 were $5.35/share. Thus, the P/E ratio is 5.6.
Natural gas prices, which recently spiked, could have an impact on stock performance. The key catalyst, however, will be the extent of hydrocarbons beneath BLMC’s extensive acreage.
RonnieD
18 years ago
2.7 mil shs . The chart looks good, 5 year that is.
I see they paid 5.5 mil in divs last quarter ? 2 bucks a share for one quarter ? Can u elaborate on the divs, Ron ? My top div stock is NAT. But that doesn't mean I can't take another hi-div stock in my portfolio. Comments welcome with div history and breakdown here.
Off topic, STLS has 410k total o/s. Do you know of any more that have under a million total o/s ? I used to follow OAR years ago, it had around 800k. It was on the AMEX and now it's on the pinks. still has only 800k. http://finance.yahoo.com/q/ks?s=OART.PK
How low can we go ? Is STLS the bottom at 410l or can we find something lower. I've yet to find a screener that will search by total outstanding. Perhaps we can start a new message board just for stocks with under a million total o/s. If your interested I will participate, I'll even start it if you don't feel like it. tia, rodan812@yahoo.com
tuscadeep
18 years ago
Biloxi Marsh Lands Corporation is a huge investment opportunity for value investors. BLMC.PK has a web site: www.biloximarshlandscorp.com. Consider:
1. BLMC’s BALANCE SHEET
A. Land at Cost: $2.61 per acre. BLMC owns approximately 90,000 acres of land in Louisiana.
B. Marketable securities are carried at cost. Unrealized gains for 2005 total $1.6 Million.
C. Proved reserves are not included in these financial statements. See p. 2 of the Annual Report.
D. BLMC has no long-term debt.
2. Other Hidden Assets
A. BLMC has now received the complete data of the 3D seismic survey completed by Meridian Resources. This data covers 314 square miles including BLMC’s 90,000 acres.
B. Phase IV, which covers approximately 48 sq. miles of BLMC property, did not previously have a 3D seismic survey done. Phase 4 includes BLMC property encompassing the Tuscaloosa sand interval.
C. “Development of the deeper Tuscaloosa and Cretaceous intervals could prove to represent significant value” to BLMC. Meridian currently has a portion of this BLMC property under lease. Please listen to the question and answer portion Meridian Resource’s (TMR) quarterly conference call of May 9th. This conference call can be accessed by dialing 888-286-8010 and referencing conference ID #88586178 or can be accessed on TMR’s website at www.tmrc.com. I specifically inquired about the Tuscaloosa opportunity during that conference call. TMR management’s comments were enlightening. If successful, the Tuscaloosa opportunity could increase BLMC’s revenues exponentially!
D. The pipeline infrastructure running throughout BLMC acreage “and the right to use excess capacity and take over the pipeline after abandonment may prove to be valuable for future development of” BLMC mineral interests.”
E. BLMC’s possessory action (referenced on Page 3 of the annual report) has the potential of yielding “in excess of 28 million dollars.” The Louisiana Supreme Court recently ruled in favor of BLMC on the issue of title relating to such action. Note, however, that the State of Louisiana may have some claim to a portion of such proceeds based on water bottom rights. The annual report on the BLMC’s website does not include these details, but the annual report sent to the shareholders, which is more comprehensive and has this detailed information.
F. 82,000 acres of BLMC land are “open and available for exploration and development”. BLMC has “retained the services of a consulting geologist and two geophysicists to review and reprocess the 3D data ….”BLMC’s possession of the 3D Seismic studies and ability to identify additional prospects on BLMC property may enable them to receive royalties from future lessees in excess of the standard 25% due to this valuable data.
3. INCOME STATEMENT
A. Expenses are less than 7% of revenues. BLMC’s focus is on receiving royalties derived from leases on its land.
B. Salaries and bonuses are at reasonable levels.
C. During 2005, dividends distributed to shareholders were $3.25/share. “During 2006 (BLMC) intends to “equal or exceed the amount of dividends paid during 2005.” At current share levels, BLMC’s dividend yield approximates 10%.
D. Revenues for 2005 were negatively impacted by Hurricanes Katrina and Rita. Nevertheless, earnings for the twelve month period ending 3/31/06 were $5.35/share. Thus, the P/E ratio is 6.3.
Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site: www.biloximarshlandscorp.com
This is the best value play I’ve ever come across. Any comments or observations.
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
TB
3 years ago
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