Natural Gas

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XTEX

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CNIG

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CPNO

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MCF

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CMS

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CHK

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LNG

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CGC

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SNG

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AOG

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IVAN

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IFNY

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IXOG

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HOGC

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HNR

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HBNRF

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BP

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BRG

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BRY

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BYCX

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AVLN

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ASPN

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ABP

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ATG

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AOOR

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APC

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AEZ

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EQT

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ENSI

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EGYF

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EENT

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EGN

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END

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EEP

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EP

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DUK

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DVN

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CWLXF

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What ares will Natural Gas affect >

Residential & Commercial
Industrial
Electric Generation
The transportation Sector

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Natural gas is believed by many to be the most important energy source for the future. The abundance of natural gas, worldwide as well as domestically, coupled with its environmental soundness and multiple applications across all sectors, means that natural gas will continue to play an increasingly important role in meeting demand for energy in the United States.

[tuscadeep]

BLMC has “developed and placed” five drilling prospects.
http://biz.yahoo.com/bw/061215/20061215005085.html?.v=1

One would anticipate a higher level of BLMC participation than its typical 25% royalty interest.

We should learn more detail on the arrangement with Manti Exploration when BLMC's annual report is released on 2/23/07 if not sooner. Keep in mind that MANTI Exploration is a highly reputable firm. http://www.mantires.com/

Note Manti recently submitted permit applications for three sites in Saint Bernard Parish:

Manti Permit Applications can be retrieved by going to The Louisiana Dept. of Natural Resources Costal Management Division Tracking System:

http://sonris-www.dnr.state.la.us/sonris/cmdPermit.jsp?sid=PROD

The applicable CUP Numbers are: P20061617, P20061746, and P20061747.

I view the Manti press release as a turning point for BLMC's future.

For more details on Biloxi Marshlands Corp. see their website: http://www.biloximarshlandscorp.com/

[02opida]

The price of Natural Gas moving up again :)

[tuscadeep]

Biloxi Marsh Lands: A Small Cap With a Large 10.8% Annual Yield

http://biz.yahoo.com/seekingalpha/061005/17954_id.html?.v=1

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KGLJ

[tuscadeep]

FORBES MAGAZINE ARTICLE RECOMMENDS BLMC

The current issue (10/2/06) of Forbes Magazine mentions Biloxi Marshlands Corporation (BLMC). The article is entitled “Picking on the Small Fry” (page 84) and can also be viewed at Forbes.com.

http://www.forbes.com/business/forbes/2006/1002/084.html

[Spellbound]

If the following is true, then just about any NG investment will work for you...

http://www.rockymountainnews.com/drmn/energy/article/0,2777,DRMN_23914_4884051,00.html

[tuscadeep]

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]

“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]

BLMC: A NATURAL GAS GEM

No Debt
Low P/E ratio
High Dividend Yield
Reasonable management compensation level
Hidden assets
Potential for new reserves


Biloxi Marsh Lands Corp: BLMC.pk. BLMC owns 90,000 acres of land in St. Bernard Parish, Louisiana. BLMC receives its primary royalties from lessee natural gas exploration of its extensive acreage.

Recently Clyde Milton (Cheap Stocks) submitted an interesting article to the Seeking Alpha Network regarding BLMC. http://smallcap.seekingalpha.com/article/11327.
On a comparative basis, BLMC is an incredible bargain.

BLMC’s CEO is aggressively focused on maximizing shareholder value. BLMC has minimal overhead and is basically a cash cow.

Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site: http://www.biloximarshlandscorp.com/


Price: $32.00/share
Dividends 2005: $3.25
Dividends 2006 to date: $2.00
Yield: 10%+
Earnings for 12 mos. ending 3/31/06: $5.35
P/E Ratio: 6
Market Cap: $88 Million

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. BLMC has no long-term debt.

2. Other Hidden Assets

A. BLMC recently received the complete data of the 3D seismic survey performed 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, a potentially huge reserve opportunity.
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,” ie. in excess of $10/share. 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” and are not currently being leased. 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 and perhaps royalties on identified prospects in the 37 ½% to 50% range. That could obviously have a significant impact on earnings and dividends.

3. INCOME STATEMENT

A. Expenses are less than 7% of revenues. BLMC’s focus is on receiving royalties derived from leases on its land, ie. this is a low risk situation.
B. Salaries and bonuses, like PYOL, 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 exceeds 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 6.

Natural gas prices could have an impact on stock performance. The key catalyst, however, will be the extent of hydrocarbons beneath BLMC’s extensive acreage.

Annual report data from 1998 to the present, quarterly reports, and press releases are available on BLMC’s web site:
http://www.biloximarshlandscorp.com/

[rossi]

ADMIRAL BAY ANNOUNCES THAT IT HAS DRILLED OVER 75 NEW CBM WELLS AT ITS PROJECTS IN THE CHEROKEE BASIN IN 2006

Company to increase focus on its Mound Valley project

Centennial, Colorado 19 June 2006

Admiral Bay Resources Inc. (TSX.V: ADB) is pleased to report it has completed the drilling of more than 75 new CBM wells at its projects in the Cherokee Basin since January 1, 2006. The Shiloh project remains the Company's main development focus with 58 wells having been drilled there this year. Development at the Mound Valley and Devon projects also continues, with the drilling of 13 wells at Mound Valley and 5 wells at Devon. These new wells continue to be connected to the pipeline and begin to generate gas sales (see news release of May 12, 2006).

Admiral Bay currently has four drilling rigs in operation at its projects. Based on this current drilling program, Management expects to complete the drilling of 110 new wells from the beginning of the year to its fiscal year-end (July 31st).

Development at the Mound Valley project
With the completion of the Company's new tap/compressor facility into Southern Star's main pipeline, Mound Valley will become a major focus for development for the remainder of the year. This new pipeline connection will significantly increase the Company's net back on gas sales, as previously Admiral Bay was selling its gas production to a third party who retained a significant percentage of the sales for accessing the pipeline.

As part of the infrastructure development at the project, the Company has installed a two and half mile 8 inch line and is now in the process of completing the gathering system to tie in several of the new wells recently drilled. Based on the current Development Program, Admiral Bay expects to have more than 25 wells in production at Mound Valley by the end of the summer, in time for when Management believes gas prices will trend upward toward the normal heating season pricing in the fall and winter. There are currently 60 new wells planned at Mound Valley in the 2006 Development Program.

Drilling Begins at the Santa Rita project
The Company is also pleased to announce that it has begun the drilling of two test wells, the Huntington 16-20 and the Huntington 12-22 at the Santa Rita Project in Greenwood County, Kansas. The wells will reach a total depth of approximately 2,800 feet (845 meters) in the Arbuckle carbonates. The drilling will include coring of the Pennsylvanian age coals and black shales. The Company holds 13,400 acres at the Santa Rita project which lies on the western side of the Cherokee Basin. The project will be an area of focus for the Company in 2007.

Acquisition of Acreage
The Company continues to expand its lease positions in both the Cherokee and Appalachian Basins. Admiral Bay's current acreage position is approximately 170,000 acres.

Admiral Bay Resources Inc. (www.admiralbay.com) is an emerging unconventional gas production company focused on the development of projects in the Cherokee Basin in southeast Kansas and the Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX Venture Exchange under the symbol ADB.