The Meridian Resource and Exploration, LLC (Meridian) continued its 3D seismic program which is planned to be completed in five (V) Phases. In prior years Meridian completed Phase I & II of its 3D seismic survey covering approximately 85 square miles of our acreage. During 2004 Phase III of Meridian's 3D seismic survey was completed. Due to the physical layout of the 3D seismic program, Phase III covered only approximately 4 square miles of Company property. This brings the total amount of Company property surveyed during Phase I, II and III to approximately 89 square miles, leaving approximately 48 square miles to survey. Meridian commenced shooting Phase IV of its 3D seismic survey during the first quarter of 2005. Phase IV is currently planned to cover the approximately 48 square miles of Company property left to survey.
Meridian added significantly to the pipeline infrastructure running through Company acreage by completing its 8 mile - 12 inch diameter pipeline during the third quarter of 2004 and building a 1 mile spur onto this pipeline during the fourth quarter.
During the year Meridian successfully completed 11 wells in which the Company owns an interest with 1 additional well successfully logged awaiting a work over rig and 4 wells which were unsuccessful being plugged and abandoned as dry holes. The Meridian - BML 5-1, 6-3, 7-2, 7-3, 8-1, 19-1, 22-1, 24-1, 31-1, and State Lease (S/L) 17598-1(formerly Ducros et al No. 32-1) wells were placed on production during the year. The Company owns an interest in each of the producing units that have been or will be formed to produce each of these wells. On December 31, 2004 each of these wells were producing natural gas as were Meridian's BML 1-2 and 18-1 wells. Meanwhile the BML 6-1, and 6-2 wells were producing natural gas on compression. After several unsuccessful attempts to re-complete its BML 7-1 well, Meridian side tracked out of the bore hole to successfully complete its BML 6-3 well. It appears that the BML 6-3 is completed in the same reservoir as the BML 6-1 and 6-2 wells and was also being produced on compression as of December 31, 2004. According to Meridian the BML 7-4 well has been successfully logged and is awaiting a work over rig due to initial completion problems. In addition to the Meridian wells, on December 31, 2004 the Manti Jambi, Inc.-BML 1 and 3 wells continued to produce natural gas on compression. As of December 31, 2004 the combined gross daily production rate from all of these 16 wells was approximately 81 million cubic feet (mmcf) with net daily production accruing to the Company of approximately 9.9 mmcf.
A reserve study commission by the Company and completed by an independent reservoir engineer estimates that as of December 31, 2004 the Company's "Developed Producing" proved reserves are 4.772 billion cubic feet (bcf) of natural gas and estimates that the "Developed Non-Producing" proved reserves are 1.021 bcf, totaling 5.792 bcf of proved reserves. The same reserve study estimates the productive life of the wells range from 2 to 6 years, with slightly less then 50% of the proved reserves depleting by the end of 2005. It should be noted that the current production and the corresponding proved reserves are being produced from 10 producing units covering approximately 3,400 acres of Company property, with the Company owning an additional 84,500 +/- acres. The reserve study does not cover or attempt to estimate un-proven reserves under any of these 84,500 +/- acres. As of this time, we offer no guidance as to quantities of reserves, if any, under any of these 84,500 +/- acres.
While the Company historically has only declared one dividend each year, during 2004 the Board of Directors declared four dividends totaling $4.125 per share of outstanding common stock with the fourth dividend payment date being January 17, 2005. On January 17, 2005 a dividend in the amount of $1.50 per share of outstanding common stock was paid.
William B. Rudolf, President and CEO, commented: "We are very pleased with the level of revenue and earnings which represents the Company's best quarterly and annual financial performance since its founding in 1936. The fact that our proved reserves were replaced and are slightly greater the our reserves at the end of last year is also encouraging. Nonetheless, we understand, as should our shareholders, the relatively short life of our proved reserves. While there is no certainty, we are hopeful that over time additional discoveries will continue to replace our reserves. In the meantime, in an effort to increase shareholder value we hope to develop and execute strategies that will allow us to use a portion of our current strong cash flow to perpetuate cash flows over the long term."
Biloxi Marsh Lands Corporation owns approximately 88,000 acres of marsh lands located in St. Bernard Parish, Louisiana. As the landowner, it derives the vast majority of its revenue from oil and gas exploration and production activities that take place on or near the company's land. The company also derives minimal revenues from surface rentals.
Most Popular Articles
From the Career Center
Jobs that may interest you