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BPZ Energy Provides Fourth Quarter And Year Ended December 31, 2010 Financials And Operations Update

For the year ended December 31, 2010, the Company recognized approximately $11.6 million of net interest expense which includes $21.2 million of interest expense reduced by $9.6 million of capitalized interest expense. For the same period in 2009, the Company did not recognize any interest expense as we capitalized all interest expense of $4.4 million to construction in progress. For the year ended December 31, 2010, the increase in interest expense is due to the $170.9 million of 2015 Convertible Notes issued in 2010.

Income Tax

For the three months ended December 31, 2010, the Company recognized an income tax benefit of approximately $4.6 million on a net loss before income tax of approximately $14.7 million.  For the same period in 2009, the Company recognized an income tax benefit of approximately $1.9 million on a net loss before income tax of approximately $11.9 million.  

For the full year ended December 31, 2010, the Company recognized an income tax benefit of approximately $11.6 million on a net loss before income tax of approximately $71.4 million. For the same period in 2009, the Company recognized an income tax benefit of approximately $6.6 million on a net loss before income tax of approximately $42.4 million. 

Liquidity, Capital Expenditures and Capital Resources

Liquidity

At December 31, 2010, the Company had cash and cash equivalents of $11.8 million and current accounts receivable related to its December oil sales of $11.2 million, all of which was collected in early January 2011. The Company had a working capital surplus at December 31, 2010 of $22.7 million.

Capital Expenditures

The Company reported total capital expenditures, including capitalized interest, of approximately $42.6 million for the fourth quarter ended December 31, 2010 and $159.9 million capital expenditures for the full year 2010. Highlights include:

  • $46.1 million and $33.2 million for the year related to drilling costs associated with the Corvina and Albacora fields, respectively, along with $1.9 million during the quarter and $2.2 million for the full year in site preparation for drilling in Block XIX.
  • $26.0 million during the quarter and $41.7 million for the year as a result of the GE turbine payments related to the Company's gas-to-power project.
  • $9.2 million during the quarter and $16.4 million for the full year for production facilities.
  • $7.3 million for the full year for machinery and equipment.
  • $5.5 million for the full year for upgrades and additions to our existing platforms. 
  • $7.2 million during the quarter and $7.5 million for full year for other capital needs.

Capital Resources

At December 31, 2010, our outstanding long-term debt and short-term debt consisted of a $12.5 million IFC Facility bearing interest at LIBOR plus 2.75% due December 31, 2012 and $170.9 million Convertible Notes due 2015, which are reduced by $30.1 million of the remaining unamortized discount, resulting in a debt amount of $140.8 million. At December 31, 2010, the current and long-term portions of our capital lease obligations, primarily related to the barges used in our marine operations were $4.2 million and $3.4 million, respectively.

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