Biloxi Marsh Lands - An Intriguing Landowner

Biloxi Marsh Lands Company (BLMC.PK) is an intriguing company. I wrote a few posts on it last year, and it fell off my radar screen. It is currently selling at $20, which is a four year low. The company trades in the Pink Sheets but is a very transparent and open company, with regular SEC filings, a web site, and it makes efforts to reach out to the investment community.

BLMC.PK owns approximately 90,000 acres of wetlands in St. Bernard Parish, Louisiana. The land has no development potential but portions have been leased for mineral exploration since the 1930's. The company is transitioning from that of a royalty company to one with a more active role in exploration.

The company recently put detailed information on its website on two potential prospects on its land, at the NAPE EXPO in February 2008. Here is a link to the press release.

A summary of the two prospects, entitled "Alpha" and "Beta."

Prospect Area “Alpha”

1) 170 BCF of Natural Gas Reserve Potential
2)3D seismic Amplitude Anomalies including a classic “Gator-Mouth” Anomaly conforming to Structure
3) Multiple Fault Blocks covering +/- 1,500 acres
4) Average net sand thickness 150’
5) +/- 2,000 acres controlled
6) Multiple well development potential

Prospect Area “Beta”

1) 300 BCF of Natural Gas Reserve Potential
2) +/- 5,000 acre structure shown on 3D seismic
3) Documentation of sand and hydrocarbons present in original well
4) Original well failed upon flow test due to improper completion
5) Baker Hughes completion analysis indicates deeper perforations and gravel pack will aid in sand control
6) Average sand thickness 40’ net over +/- 5,000 acre structure
7) +/- 5,200 acres controlled
8) Multiple well development potential


BLMC.PK has no debt and $8.8 million in cash, $4.6 million in marketable debt and equity securities that are carried at cost, and $2.2 million in other investments. They paid a $1.00 dividend in 2007, the entire amount at year end.

I need to do some more research on this one before taking a position but it is interesting that the price has been cut in half while natural gas prices have been moving up.

Comments

[dfloydr]

TMR did a lot of seismic in these marshlands and they drilled a few wells. I have not followed TMR for at least a year. Their stock is way down and their management seems lost. TMR's wells got hammered by that pair of hurricanes that did in NO. TMR recovered rather well but then there was a lot of talk about all the damage done to the marshlands by the drilling. Canals cut through the marshes. Removing oil and gas has tended to lower the ground level making NO more and more vulnerable.

I do not know the present status in the marsh lands, but do look hard at what is now going on there.

[krkno]

I went to the annual meeting a couple of weeks ago. The company that ran the seismic has had severe management problems, and they released most of the acreage back to BLMC. The real advantage here is that BLMC acquired the rights to the seismic. There is now a staff of explorationists developing prospects. There has been early success with relatively shallow gas wells, but the emphasis now is on deeper play with more potential. I think patience will pay off.

[Eric Fox]

I found this company a couple of years ago while researching CKX Land, another Louisiana land company. It was selling in the $50 range. Lots of cash and no debt. Do you either of you know anything about the Lake Eugenie Land Company, BLMC calls them their "sister" company but it is hard to get any info on it.