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Monday, 07/31/2006 11:31:19 PM

Monday, July 31, 2006 11:31:19 PM

Post# of 35
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