Houston, March 6, 2014 (GLOBE NEWSWIRE) -- BPZ Energy (NYSE:BPZ)(BVL:BPZ), an independent oil and gas exploration and productioncompany, today provided summary financial and operational resultsfor the fourth quarter and full year ended December 31, 2013 alongwith recent results on the Albacora A-19D well. Full year 2013 and year-to-date 2014highlights for BPZ Energy include: · Initiated the Block Z-1 development drillingcampaign at both the Corvina CX-15 and Albacora platforms. · Brought production online from a total of four newwells at the Corvina and Albacora fields. · Achieved the first million barrels of productionfrom five wells at Block Z-1. · Received permits for exploration drilling at Z-1shallow water prospects Delfin, Piedra Redonda and Raya. · Drilled and began testing the Caracol 1X well, thefirst of three scheduled onshore exploration wells at BlockXXIII. · Finished the year with $81.3 million of remainingcarry at Block Z-1. · Repaid bank debt of $82.2 million and ended theyear with a cash and cash equivalents balance of $57.4 million. · Issued new $143.8 million of Convertible Notes duein 2017, and retired $85.0 million of Convertible Notes due in2015. · Lowered general and administrative expenses by16%, compared to 2012. · Received special recognition in 2013 for thesecond year in a row as a Peruvian socially responsible company. BPZ Energy President and CEO ManoloZúñiga commented, "With a stronger foundation establishedby our team to grow the Company, we recommenced developmentdrilling at Block Z-1 in the fourth quarter of 2013 and since thattime four wells have been placed on production. The AlbacoraA-18D which was placed on production at year-end has produced anaverage of 1,960 bopd gross since that time, and approximately1,670 bopd gross over the last 24 hours. The most recentlycompleted well, the Albacora A-19D, has produced an average of1,498 bopd gross over the last five days, and approximately 2,106bopd gross over the last 24 hours. As a result of theincreased drilling activity, year to date 2014 average grossproduction is approximately 4,834 bopd. We recently spud the Albacora A-21D well, whichwill have a target measured depth of 12,100 feet. Drillingcontinues at the Corvina CX15-3D well, with results expected inApril 2014.
With exploration permits in hand for our threeshallow water prospects at Z-1, planning continues for the drillingof selected locations with expectations that we could drill Delfinlater this year. Onshore at Block XXIII, the Caracol 1Xexploration well has tested dry gas with formation water from twointervals, and we are now testing two upper intervals which had oilshows. After we complete this phase of testing, we will movethe rig to the second Block XXIII well location, the Cardo 1X, tobegin exploration drilling. Once permits are received,we also intend to drill at onshore Block XXII, where we arepursuing conventional and unconventional oil plays.I am very pleased with the progress of theoffshore development drilling program currently underway, whichalong with the potential upside we have from exploration drillingoffshore and onshore, are expected to help us increase production,cash flow and reserves." FINANCIAL SUMMARY For the fourth quarter ended December 31, 2013,the Company reported an operating loss of $5.7 million and a netloss of $10.0 million, or $0.09 loss per share, compared tooperating income of $10.2 million and net income of $13.8 million,or $0.12 per share for the same period last year. For the twelve months ended December 31, 2013,the Company reported an operating loss of $36.4 million and a netloss of $57.7 million, or $0.50 loss per share, compared to anoperating loss of $28.6 million and net loss of $39.1 million, or$0.34 loss per share, for the same period last year. The comparison of the fourth quarter and fullyear 2013 results with the same periods in 2012 are impacted by thesale of a 49% participating interest in the Block Z-1 LicenseContract to Pacific Rubiales Energy Corp, which closed in December2012 and positively impacted 2012 results with a before tax gain of$26.9 million.
Earnings before interest, income taxes,depreciation, depletion and amortization, exploration expense andcertain non-cash charges ("EBITDAX") was a positive $1.4 millionand a negative $2.6 million for the three and twelve months endedDecember 31, 2013, respectively, compared to a positive $2.9million and $36.5 million for the same periods last year,respectively. EBITDAX is a non-GAAP measure. Pleasealso see the reconciliation to net loss included at end of thepress release.RESERVE SUMMARY As previously announced, the 2013 year-end nettotal proved crude oil reserve estimate is 16.1 million barrelscovering the Company's Corvina and Albacora fields located inoffshore Block Z-1 in Peru. The reserves estimates wereprepared by the Company's independent reserve auditors Netherland,Sewell & Associates, Inc. (NSAI). A commodity price of $105.32 per barrel, used incalculating the economic quantities of reserves, was based on the12-month unweighted arithmetic average of thefirst-day-of-the-month price for the period January 2013 throughDecember 2013. Please also see the Company's SEC filing onForm 10-K for the year ended December 31, 2013, expected to befiled March 12, 2014, for additional information.
|(In MBbls)||(In thousands)|
|Proved Developed Producing||3,209||$ 4,027|
|Proved Developed Not Producing||-||-|
|Standardized Measure of Discounted FutureNet Cash Flows, Discounted @ 10% (in thousands)||$ 678,050|
Net oil production for the three months endedDecember 31, 2013, from the Corvina and Albacora fields in BlockZ-1 was approximately 128 thousand barrels (MBbls), or 1,389barrels of oil per day (bopd), compared to pro forma net production139 MBbls, or 1,516 bopd for the same period in 2012.For the full year ended December 31, 2013, netoil production from Corvina and Albacora was approximately 514MBbls, or 1,408 bopd, compared to pro forma net production 618Mmbls, or 1,693 bopd for the same period in 2012. The decrease in net oil production in theyear-over-year comparisons is due to natural declines in oilproduction at both the Corvina and Albacora fields. REVENUE For the three months ended December 31, 2013,oil revenues after royalty payments decreased by $13.0 million to$12.0 million from $25.0 million for the same period in 2012. During the recent quarter, net oil sales volumes and realizedpricing per barrel were 119 Mmbls and $100.99, compared to 245Mmbls and $101.93 respectively, for the same quarter lastyear. For the year ended December 31, 2013, net oilrevenue decreased by $72.1 million to $50.6 million from $122.7million for the same period in 2012. The decrease in net oilrevenue is due to a decrease in the amount of oil sold of 681MBbls, and a decrease of $3.52, or 3.4%, in the average per barrelsales price received. Total sales for the year ended December 31, 2013were 507 MBbls compared to 1,188 MBbls for the same period in2012. The decrease in amount of oil sold in 2013 is due tothe December 2012 sale of a 49% participating interest in Block Z-1to Pacific Rubiales (approximately 582 MBbls for the year endedDecember 31, 2013) and lower oil production in the Corvina andAlbacora fields.
Net oil revenues are expected to increase in2014 from higher production in 2014 compared to 2013 due to ourdevelopment drilling program in Block Z-1 that began in the secondhalf of 2013.EXPENSE SUMMARY Lease Operating Expense For the three months ended December 31, 2013,lease operating expense (LOE) decreased to $4.8 million ($40.30 perbarrel) compared to $14.1 million ($57.30 per barrel), for the sameperiod in 2012. The main reasons for the decrease were due tothe sale of a 49% participating interest in Block Z-1 in December2012 and lower workover expenses of $1.6 million. For the year ended December 31, 2013, leaseoperating expenses decreased by $27.5 million to $25.0 million($49.11 per Bbl) from $52.5 million ($44.16 per Bbl). Thedecrease is due to a reduction in lease operating expenses ofapproximately $25.7 million due to the sale of a 49% participatinginterest in Block Z-1 in December 2012. Additionally, repairs and maintenance expensefor 2013 decreased by $1.7 million due to fewer maintenance andrepairs on vessel support services, fuel costs decreased by $1.1million, contract pumping services decreased by $0.9 million due toreduced rent of hydraulic jet pumps used to assist oil productionand other lease operating expenses decreased by $0.3 million. These decreases were offset by higher workover expenses of $2.2million associated with the one major workover performed in 2013,compared to the one major less costly workover in 2012. General and Administrative For the three months ended December 31, 2013,total general and administrative (G&A) expenses decreased by$1.3 million to $5.6 million compared with $6.9 million for thesame period in 2012. Stock-based compensation expense, asubset of G&A expenses was $0.2 million for the recent quartercompared to $0.8 million for the same period in 2012.
G&A expenses, excluding stock basedcompensation, decreased $0.7 million to $5.4 million from $6.1million for the three-month period in 2012. The decrease isdue to lower personnel, travel, and non-income tax costs.For the year ended December 31, 2013, G&Aexpenses decreased by $4.6 million to $24.1 million from $28.7million for the same period in 2012. Stock-based compensationexpense, a subset of general and administrative expenses, was $2.8million for the year ended December 31, 2013 and $2.8 million forthe same period in 2012. G&A expenses, excluding stock basedcompensation, decreased $4.6 million to $21.3 million from $25.9million for the same period in 2012. The $4.6 milliondecrease is due to lower salary and related costs of $1.9 million,lower non-income taxes of $1.3 million, lower consulting costs of$0.5 million and lower other general and administrative expenses of$0.9 million. Geological, Geophysical and Engineering For the three months ended December 31, 2013,geological, geophysical and engineering expenses (GG&E) were$0.2 million compared to $8.0 million for the same period in2012. For the year ended December 31, 2013, GG&E expensesdecreased by $41.6 million to $2.2 million compared to $43.8million for the same period in 2012. The decrease is due to the seismic acquisition activityassociated with the seismic data acquisition plan for Block Z-1that occurred in 2012 compared to the lower activity and funding ofseismic expenses in Block Z-1 by Pacific Rubiales in 2013. Depreciation, Depletion andAmortization For the three months ended December 31, 2013,depreciation, depletion and amortization (DD&A) expensedecreased to $5.1 million from $11.5 million for the same period in2012. For the twelve months ended December 31, 2013,DD&A expense decreased to $27.2 million from $45.9 million forthe same period in 2012. For the year ended December 31,2013, depletion expense decreased $13.5 million to $18.0 millionfrom $31.5 million during the same period in 2012. Thedecrease for the year ended December 31, 2013 compared to the sameperiod in 2012 is due to lower production in the Corvina andAlbacora fields in 2013 and due to the sale of a 49% participatinginterest in the Block Z-1 license contract in December 2012.
Standby CostsFor the three months ended December, 31 2013,standby costs declined $1.1 million to $0.2 million from $1.3million for the same period in 2012. For the twelve monthsended December 31, 2013, standby costs were $4.3 million comparedto $5.3 million for the comparable period in 2012. During both 2012 and 2013 the Company had threerigs that were on standby for varying amounts of time. Other Operating Expense For the three months ended December 31, 2013,the Company wrote off $1.7 million of costs related to historicalpre-development drilling and engineering studies. There were nosimilar charges for the same period in 2012. For the year December 31, 2013, the Companyreported $4.4 million of charges related to historicalpre-development drilling studies for drilling locations,engineering studies and platform technologies and associatedcapitalized interest given these locations and technologies maychange and the Company does not see a future value for thesestudies. For the year ended December 31, 2012, theCompany reported $2.3 million of abandonment charges forabandonment costs related to a pre-existing platform in the PiedraRedonda field in Block Z-1. Gain on Divestiture Fourth quarter and full year 2012 resultsinclude a gain on divestiture of $26.9 million. On April 27,2012, BPZ Energy and Pacific Rubiales executed a Share PurchaseAgreement which called for BPZ to sell 49% participating interestin Block Z-1 to Pacific Rubiales for $150.0 million in cash. In December 2012, both parties closed the transaction and alsoreceived a Peruvian Government Supreme Decree for the execution ofthe amendment to the Block Z-1 License Contract. There were no similar gains in 2013. Other Income (Expense) For the three months ended December 31, 2013,total other expense was $4.3 million, compared to $3.7 million forthe same period in 2012. During the fourth quarter of 2013, theCompany recognized approximately $4.0 million of net interestexpense, which includes $2.6 million of capitalized interestexpense. For the same period in 2012, $3.5 million in netinterest expense was recognized which included $3.6 million ofcapitalized interest.
For full year 2013, total other expense was$27.1 million, compared to $26.1 million during the same period in2012. Net interest expense was $16.2 million, which includes $9.9million of capitalized interest expense. This compares to$16.1 million, which includes $15.6 million of capitalized interestexpense for the same period in 2012.For full year 2013 the Company recognized a $7.2million loss on the extinguishment of debt compared to $7.3 millionin for the full year 2012. This was a result of the prepaymentpremiums and fees related to the prepayments made in 2013 on the$75.0 million secured debt facility and the $40.0 million secureddebt facility as compared to the prepayment premium and feesrelated to the prepayments made on the $75.0 million facility in2012. As a result of the fair value measurementat December 31, 2013 and 2012, respectively, the gain associatedwith the embedded derivatives increased $2.9 million to a $0.3million gain for the year ended December 31, 2013 from a $2.6million loss for the same period in 2012. Income Taxes For the three months ended December 31, 2013,the Company recognized an income tax expense of $43,000 on a lossbefore income taxes of $9.9 million. For the comparable 2012period, the Company recognized an income tax benefit of $7.3million on income before income taxes of $6.6 million. For the year ended December 31, 2013, theCompany recognized income tax benefit of $5.8 million on lossbefore income taxes of $63.5 million. This compares to incometax benefit of $15.6 million on loss before income taxes of $54.7million for the same period last year. Impacting both the fourth quarter of 2012 andfull year 2012 tax expenses was a net benefit of $4.2 millionrelated to the sale of a 49% participating interest in Block Z-1.
LIQUIDITY, CAPITAL EXPENDITURES ANDCAPITAL RESOURCESLiquidity At December 31, 2013, the Company had cash andcash equivalents of $57.4 million and a working capital surplus of$71.7 million, including $1.3 million of restricted cash in currentassets. In addition, the Company held $4.1 million ofrestricted cash in non-current accounts. Capital Expenditures For the three months ended December 31, 2013,the Company's non-Block Z-1 total capital and exploratoryexpenditures were $2.7 million, excluding capitalized interest of$2.7 million. For the year ended December 31, 2013, capitaland exploratory expenditures were $5.8 million, excludingcapitalized interest of $9.9 million. The transfer of a 49% participating interest inBlock Z-1 to Pacific Rubiales was effective on December 14,2012. Pursuant to the carry agreement, Pacific Rubialesprovided funding for 100% of capital expenditures for Block Z-1 of$80.6 million for the year ended December 31, 2013. Thesegross capital expenditures included approximately $38.6 millionrelated to the CX-15 development drilling program, $17.9 millionrelated to the development drilling program at Albacora, the costsincurred in the design, fabrication, installation and pipelineconnections related to the CX-15 platform of approximately $14.1million and $4.2 million associated with the Corvina offshore LeaseAutomatic Custody Transfer unit. Capital Resources At December 31, 2013, the current and long-termportions of debt were $0.0 million and $207.0 million, whichreflects the principal amount of the 2015 Convertible Notes and2017 Convertible Notes minus the remaining unamortizeddiscount. The outstanding principal amount of the 2015Convertible Notes is $85.9 million and outstanding principal amountof the 2017 Convertible Notes is $143.8 million, totaling $229.7million of outstanding principal, before discount. At December 31, 2013, based on the Company'sshare of 2013 Block Z-1 capital and exploratory expenditurescredited against the carry amount, and the sale adjustments, thecarry balance available for future capital and exploratoryexpenditures in Block Z-1 was $81.3 million.
CONFERENCE CALLThe Company will hold a conference call andwebcast to discuss fourth quarter and year-end 2013 financial andoperational results on Friday, March 7, 2014, at 10:00 a.m. CST(11:00 a.m. EST). The live conference call may be accessedvia the Investor Relations, Events & Presentations section ofthe Company's website at www.bpzenergy.com or by accessingthe following dial-in numbers: US and Canada Dial-In: (877)293-5457 International Dial-In: (707) 287-9344 A replay of the call will also be available atthe Investor Relations section of the Company's website later inthe day. ABOUT BPZ ENERGY BPZ Energy is an independent oil and gasexploration and production company with license contracts covering1.9 million net acres in four blocks located in northwestPeru. Current operations in these blocks range fromearly-stage exploration to production. The Company holds a51% working interest in offshore Block Z-1, where developmentdrilling is currently underway at the Corvina and Albacorafields. Onshore the Company holds three 100%-owned blockswith exploration drilling currently underway at Block XXIII. In southwest Ecuador, the Company owns a non-operating net profitsinterest in a producing property. BPZ Energy trades as BPZResources, Inc. on both the New York Stock Exchange and the Bolsade Valores in Lima under ticker symbol "BPZ". Please visit www.bpzenergy.com for moreinformation. FORWARD LOOKING STATEMENT This Press Release contains forward-lookingstatements within the meaning of the Private Securities LitigationReform Act of 1995, Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. These forwardlooking statements are based on our current expectations about ourcompany, our properties, our estimates of required capitalexpenditures and our industry. You can identify theseforward-looking statements when you see us using words such as"will," "expected," "estimated," and "prospective," and othersimilar expressions. These forward-looking statements involverisks and uncertainties.
Our actual results could differ materially fromthose anticipated in these forward looking statements. Suchuncertainties include successful operation of our new platform inCorvina, the success of our project financing efforts, accuracy ofwell test results, results of seismic testing, well refurbishmentefforts, successful production of indicated reserves, satisfactionof well test period requirements, successful installation ofrequired permanent processing facilities, receipt of all requiredpermits, the successful management of our capital expenditures, andother normal business risks. We undertake no obligation topublicly update any forward-looking statements for any reason, evenif new information becomes available or other events occur in thefuture.CAUTIONARY STATEMENT REGARDING CERTAININFORMATION RELEASES The U.S. Securities and Exchange Commission(SEC) permits oil and gas companies, in their filings with the SEC,to disclose only "reserves" that a company anticipates to beeconomically producible by application of development projects toknown accumulations, and there exists or is a reasonableexpectation there will exist, the legal right to produce, or arevenue interest in the production, installed means of deliveringoil and gas or related substances to market, and all permits andfinancing required to implement the project. We are prohibited fromdisclosing estimates of oil and gas resources that do notconstitute "reserves" in our SEC filings, including any estimatesof contingent and prospective resources included in this pressrelease. With respect to "probable" and "possible" reserves, we arerequired to disclose the relative uncertainty of suchclassifications of reserves when they are included in our SECfilings. Further, the reserves estimates contained in this pressrelease are not designed to be, nor are they intended to represent,an estimate of the fair market value of the reserves. The Company is aware that certain informationconcerning its operations and production is available from time totime from Perupetro, an instrumentality of the Peruvian government,and the Ministry of Energy and Mines ("MEM"), a ministry of thegovernment of Peru. This information is available from thewebsites of Perupetro and MEM and may be available from otherofficial sources of which the Company is unaware. Thisinformation is published by Perupetro and MEM outside the controlof the Company and may be published in a format different from theformat used by the Company to disclose such information, incompliance with SEC and other U.S. regulatory requirements.
Additionally, the Company's joint venturepartner in Block Z-1, Pacific Rubiales Energy Corp. ("PRE"), is aCanadian public company that is not listed on a U.S. stockexchange, but is listed on the Toronto (TSX), Bolsa de Valores deColombia (BVC) and BOVESPA stock exchanges. As such PRE maybe subject to different information disclosure requirements thanthe Company. Information concerning the Company, such asinformation concerning energy reserves, may be published by PREoutside of our control and may be published in a format differentfrom the format the Company uses to disclose such information,incompliance with SEC and other U.S. regulatory requirements.The Company provides such information in theformat required, and at the times required, by the SEC and asdetermined to be both material and relevant by management of theCompany. The Company urges interested investors and thirdparties to consider closely the disclosure in our SEC filings,available from us at 580 Westlake Park Blvd., Suite 525, Houston,Texas 77079; Telephone: (281) 556-6200. These filings canalso be obtained from the SEC via the internet at www.sec.gov. ### BPZ Resources, Inc. andSubsidiariesConsolidated Statements of Operations (Unaudited) (In thousands, except per sharedata)
|Oil revenue, net||$ 12,028||$ 12,500||$ 25,017||$ 50,585||$ 122,708|
|Operating and administrativeexpenses:|
|Lease operating expense||4,799||5,319||14,064||24,893||52,458|
|General and administrativeexpense||5,613||6,572||6,853||24,111||28,705|
|Geological, geophysical andengineering expense||223||857||7,986||2,184||43,787|
|Depreciation, depletion andamortization expense||5,109||7,246||11,515||27,214||45,873|
|Other operating expense||1,747||2,683||-||4,430||2,266|
|Gain on divestiture||-||-||(26,864)||-||(26,864)|
|Total operating and administrativeexpenses||17,729||23,382||14,805||87,143||151,565|
|Other income (expense):|
|Income (loss) from investment inEcuador property, net||(9)||(8)||(47)||152||62|
|Loss on extinguishment ofdebt||-||(3,436)||-||(7,222)||(7,318)|
|Gain (loss) onderivatives||(30)||(457)||(319)||242||(2,610)|
|Other income (expense)||(214)||(2,907)||195||(4,268)||(159)|
|Total other expense,net||(4,267)||(10,239)||(3,672)||(27,072)||(26,096)|
|Income (loss) before incometaxes||(9,923)||(21,092)||6,575||(63,486)||(54,703)|
|Income tax expense(benefit)||43||(5,771)||(7,268)||(5,775)||(15,614)|
|Net income(loss)||$ (9,966)||$ (15,321)||$ 13,843||$ (57,711)||$ (39,089)|
|Basic net income (loss) pershare||$ (0.09)||$ (0.13)||$ 0.12||$ (0.50)||$ (0.34)|
|Diluted net income (loss) pershare||$ (0.09)||$ (0.13)||$ 0.12||$ (0.50)||$ (0.34)|
|Basic weighted average common sharesoutstanding||116,035||116,009||115,742||115,943||115,631|
|Diluted weighted average commonshares outstanding||116,035||116,009||115,928||115,943||115,631|
|Cash and cashequivalents||$ 57,395||$ 83,540|
|Income taxes receivable||2,134||-|
|Prepaid and other currentassets||5,419||5,734|
|Property, equipment and constructionin progress, net||217,753||238,557|
|Investment in Ecuador property,net||534||632|
|Deferred tax asset||63,602||55,242|
|Total assets||$ 406,749||$ 527,430|
|LIABILITIES AND STOCKHOLDERS'EQUITY|
|Accounts payable||$ 3,127||$ 21,978|
|Current income taxespayable||-||10,460|
|Current maturity of long-termdebt||-||24,046|
|Long-term debt, net||206,939||197,160|
|Preferred stock, no par value, 25,000authorized; none issued and outstanding||-||-|
|Common stock, no par value, 250,000authorized; 117,526 and 116,932 shares issued and outstanding at December 31, 2013 andDecember 31, 2012, respectively||569,061||560,175|
|Total liabilities andstockholders' equity||$ 406,749||$ 527,430|
|ThreeMonthsEnded December 31,||TwelveMonthsEnded December 31,|
|Net income (loss)||$ (9,966)||$ 13,843||$ (57,711)||$ (39,089)|
|Loss on extinguishment of debt||-||-||7,222||7,318|
|Income tax expense (benefit)||43||(7,268)||(5,775)||(15,614)|
|Depreciation, depletion and amortizationexpense||5,109||11,515||27,214||45,873|
|Geological, geophysical and engineeringexpense||223||7,986||2,184||43,787|
|Other operating expense||1,747||-||4,430||2,266|
|Other (income) expense||216||(170)||3,934||53|
|(Gain) loss on derivatives||30||319||(242)||2,610|
|Gain on divestiture||-||(26,864)||-||(26,864)|
|EBITDAX (a)||$ 1,423||$ 2,884||$ (2,586)||$ 36,455|
CONTACT: A. Pierre Dubois Investor Relations & Corporate Communications BPZ Energy 1-281-752-1240 email@example.com