BPZ Energy Provides Second Quarter And Six Month Period Ended June 30, 2012 Financial Results And Operational Update

HOUSTON, Aug. 8, 2012 (GLOBE NEWSWIRE) -- BPZ Energy (NYSE: BPZ; BVL: BPZ), an independent oil and gas exploration and production company, today provided a financial and operational update for the three and six months ended June 30, 2012.

For the second quarter of 2012, the Company reported an operating loss of $6.7 million and a net loss of $8.5 million, or $0.07 per share, compared to operating income of $8.9 million and net income of $0.3 million, or breakeven on a per share basis, for the same period last year.

The operating loss in the second quarter of 2012 was due to higher operating costs along with lower sales volumes and realized pricing compared to the same period last year. The net loss includes second quarter debt extinguishment costs of $7.3 million related to the prepayment of a portion of the $75 million secured debt facility.

For the six months ended June 30, 2012, the Company reported an operating loss of $25.6 and a net loss of $35.8 million, or $0.31 per share, compared to operating income of $9.2 million and a net loss of $7.8 million, or $0.07 per share for the same period last year.

The operating loss for the six months ended June 30, 2012, compared to the same period last year, was mainly due to increased geological, geophysical and engineering (GG&E) expenses of $19.0 million related to the offshore 3D seismic acquisition activity underway at Block Z-1 and higher lease operating costs of $5.8 million. For the first half of 2012, lower oil sales volumes were partly offset by higher sales prices compared to the same period last year.

Earnings before interest, income taxes, depletion, depreciation and amortization, exploration expense and non-recurring charges (EBITDAX) was $7.9 million and $24.7 million for the three and six months ended June 2012, respectively, compared to $19.6 million and $36.6 million for the same periods last year, respectively. A reconciliation table to net loss, the most directly comparable GAAP measure to EBITDAX, and the rationale for this non-GAAP financial measure is included later in the release.

BPZ Resources, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
Net revenue:
Oil revenue, net	$ 32,679	$ 35,646	$ 69,154	$ 73,362
Other revenue	2	1,293	80	2,282
Total net revenue	32,681	36,939	69,234	75,644
Operating and administrative expenses:
Lease operating expense	12,694	7,521	24,062	18,273
General and administrative expense	10,425	9,276	17,556	18,307
Geological, geophysical and engineering expense	2,442	1,462	26,732	7,719
Depreciation, depletion and amortization expense	11,648	9,231	23,154	19,277
Standby costs	1,409	492	2,599	2,821
Other expense	756	--	756	--
Total operating and administrative expenses	39,374	27,982	94,859	66,397
Operating income (loss)	(6,693)	8,957	(25,625)	9,247
Other income (expense):
Loss from investment in Ecuador  property, net	(47)	(47)	(94)	(94)
Interest expense	(4,080)	(4,905)	(10,290)	(8,640)
Loss on extinguishment of debt	(7,318)	--	(7,318)	--
Gain (loss) on derivatives	8,407	(321)	2,039	(4,623)
Interest income	7	2	10	233
Other income (expense)	(198)	(14)	(245)	192
Total other expense, net	(3,229)	(5,285)	(15,898)	(12,932)
Income (loss) before income taxes	(9,922)	3,672	(41,523)	(3,685)
Income tax expense (benefit)	(1,422)	3,380	(5,732)	4,116
Net income (loss)	$ (8,500)	$ 292	$ (35,791)	$ (7,801)
Basic net income (loss) per share	$ (0.07)	$ 0.00	$ (0.31)	$ (0.07)
Diluted net income (loss) per share	$ (0.07)	$ 0.00	$ (0.31)	$ (0.07)
Basic weighted average common shares outstanding	115,573	115,322	115,543	115,260
Diluted weighted average common shares outstanding	115,573	115,776	115,543	115,260

Production and Revenue Summary

Production

Total offshore Block Z-1 oil production from the Corvina and Albacora fields for the second quarter ended June 30, 2012 was 323 thousand barrels (MBbls), or 3,550 barrels of oil per day (bopd), compared to 377 MBbls, or 4,142 bopd, for the same period in 2011. All production numbers noted in the release are on a 100% gross basis.

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