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BPZ Energy Reports Third Quarter 2013 Financial Results And Provides Update On Development Drilling

Stocks in this article: BPZ

The decrease in GG&E for the nine months ended September 30, 2013 compared to the same period in 2012 is due to the majority of the 3D seismic acquisition program for Block Z-1 having occurred during 2012.  Seismic expenses for the three and nine months ended September 30, 2013 were funded by Pacific Rubiales Energy Corp. under the carry agreement.

Depreciation, Depletion and Amortization Expense (DD&A)

For the three months ended September 30, 2013, DD&A expense decreased $4.0 million to $7.2 million from $11.2 million for the same period in 2012.  For the nine months ended September 30, 2013, DD&A expense decreased $12.3 million to $22.1 million from $34.4 million for the same period in 2012. 

The decreased DD&A expenses for both the third quarter and nine-month periods of 2013 is due to the lower net oil production in the Corvina and Albacora fields in 2013 as well as the sale of a 49% participating interest in the Block Z-1 license contract in December 2012.

Standby Costs

For the three months ended September 30, 2013, standby costs declined $0.8 million to $0.7 million from $1.5 million for the same period in 2012.  For the nine months ended September 30, 2013, standby costs were $4.1 million, approximately the same as the comparable period in 2012.

During the three months ended September 30, 2013 the Company had one rig on standby versus three during the three-month period in 2012. During the both nine months periods ended September 30, 2013 and September 30, 2012 the Company had three rigs that were on standby for varying amounts of time.

Other Operating Expense

For the three months ended September 30, 2013, the Company wrote off $2.7 million of costs related to historical pre-development drilling studies and associated capitalized interest compared to $1.5 million of abandonment charges related to a platform in the Piedra Redonda field in Block Z-1 during 2012.

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