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Sunday, 07/30/2006 10:25:13 PM

Sunday, July 30, 2006 10:25:13 PM

Post# of 35
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.