By Houston Business Journal

Shares of BPZ Resources Inc. were sharply lower in early trading Friday after Jefferies & Co. Inc. analysts dropped their price target estimate for the stock.

Jefferies dropped the price target from $5.50 to $4 over concerns about disappointing average oil sales in the second quarter of 3,300 barrels a day, well below estimates of 5,200 barrels. According to the analystsâ¿¿ report, the company made only one 28,000-barrel shipment in June.

Houston-based BPZ (NYSE: BPZ) focuses on oil and gas exploration in northwest Peru and southwest Ecuador.

Jeffries also lowered its per-well reserve estimates for BPZ and raised estimates of future development costs.

⿿Facing a host of headwinds including the potential for additional involuntary shut-ins, an eventual temporary suspension of Corvina activity, and a declining cash position, the sales miss comes at an inopportune time. BPZ⿿s poor operational track-record, erratic production history,and failed JV attempts warrant caution,⿝ the report said.

After reaching a low of $3.75 earlier in the session, BPZ shares were trading around $3.81 at mid-day Friday, down 30 cents, or about 7 percent.

Copyright 2010 American City Business Journals
Copyright 2010