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.
