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Sunday, 07/30/2006 10:48:23 PM

Sunday, July 30, 2006 10:48:23 PM

Post# of 35
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?”