Houston, Aug. 7, 2014 (GLOBE NEWSWIRE) -- BPZ Energy, (NYSE: BPZ)(BVL: BPZ), an independent oil and gas exploration and productioncompany, today reported second quarter and first half 2014financial results. Highlights: Results for the second quarterended June 30, 2014, compared with the second quarter ended June30, 2013 were as follows:
- Operating income of $4.4 million, vs. an operating loss of$12.7 million.
- Net loss of $2.5 million, or $0.02 per share, vs. a net loss of$19.6 million, or $0.17 per share.
- The company's 51% share of production from Block Z-1 was 2,618bopd vs. 1,424 bopd.
- Earnings before interest, income taxes, depletion,depreciation, amortization, and exploration expense (EBITDAX) werea positive $11.1 million vs. a negative $3.9 million. (EBITDAX is a non-GAAP measure. Please also see thereconciliation to net loss included at end of the pressrelease.)
- Operating income of $6.5 million, vs. an operating loss of$19.9 million.
- Net loss of $6.1 million, or $0.05 per share, vs. a net loss of$32.4 million or $0.28 per share.
- The company's 51% share of production from Block Z-1 was 2,593bopd vs. 1,457 bopd.
- EBITDAX for the six months ended June 2014 was a positive $20.7million vs. a negative $3.9 million.
President and CEO Manolo Zuniga commented, "We are pleased with the improvedfinancial results for the first half due to the ongoing developmentdrilling program at Block Z-1 where so far we have completed fiveof the ten wells budgeted for this year. Given the high levelof activity planned in the second half of the year, our expectationis that we will continue to grow both production and cash flow. As we recently mentioned in our Operations Update, we arecurrently drilling the new Corvina CX15-7D well and sidetrackingthe Albacora A-18D well one thousand feet deeper than theoriginal wellbore due to the new deeper oil found in theA-26D. In addition, we are working on bringing back the twooil wells that were shut-in during July. The CX15-3D well isnow producing again in response to artificial gas lift, which wealso plan to initiate at the Albacora A-21D. Given thepositive results so far at the CX15-3D, we are evaluating expandingthe gas lift program to other naturally producing oil wells at bothfields to optimize their productivity."Production BPZ Energy maintains a 51% working interest inoffshore Block Z-1, and the Company's respective share ofproduction is referenced as net production.
The Company's net oil production from theCorvina and Albacora fields for the three months ended June 30,2014 was 238,000 barrels, or 2,618 barrels of oil per day (bopd),compared with 130,000 barrels, or 1,424 bopd for the same period in2013. For the six months ended June 30, 2014, net oilproduction was 469,000 barrels, or 2,593 bopd, compared with264,000 barrels or 1,457 bopd, for the same period in2013.The increased net oil production in the firsthalf of the year is a result of the reinitiated drilling campaignat Block Z-1 which began in the second half of 2013 and iscurrently ongoing, partly offset by declines from previous wellsdrilled at the Corvina CX-11 and Albacora platforms. Net Revenue For the three months ended June 30, 2014, oilrevenue after royalty payments increased by $11.4 million to $24.2million from $12.8 million for the same period in 2013. Theincrease in net oil revenue is due to an increase in the amount ofoil sold of 104,000 barrels and an increase of $6.69, or 7.1%, inthe average net realized price received from $93.94 to $100.63 perbarrel. Total oil sales for the three months ended June 30,2014 were 240,000 barrels compared with 136,000 barrels for thesame period in 2013. For the six months ended June 30, 2014, oilrevenue after royalty payments increased by $19.0 million to $45.1million from $26.1 million for the same period in 2013. Theincrease in net oil revenue is due to an increase in the amount ofoil sold of 187,000 barrels and an increase of $1.29, or 1.3%, inthe average net realized price received per barrel. Total oilsales for the six months ended June 30, 2014 were 452,000 barrelscompared with 265,000 barrels for the same period in2013.
The increase in the amount of oil sold for thesix months ended June 30, 2014 compared with the same period in2013 is due to increased production in the Albacora field from thenew A-18D, A-19D and A-21D wells and increased production from theCorvina CX-15 platform from the new CX15-1D, CX15-2D and CX15-3Dwells, more than offsetting declines from the previously drilledwells at the Corvina CX-11 and Albacora platforms.Expenses Lease Operating Expense (LOE) For the three months ended June 30, 2014, LOEdecreased by $1.3 million to $6.8 million ($28.06 per Bbl) from$8.1 million ($59.57 per Bbl) compared with the same period lastyear. The reasons for the lower LOE are decreased workoverexpenses of $2.8 million due to no major workovers performed in2014 compared to one major workover in 2013, and a $0.3 milliondecrease in LOE, partially offset by higher crude oil handling andtransportation expense of $1.8 million due to higher crude oilsales. For the six months ended June 30, 2014, LOEdecreased by $2.8 million to $12.0 million ($26.48 per Bbl) from$14.8 million ($55.83 per Bbl) for the same period in 2013. The reasons for the lower LOE are decreased workover expenses of$4.7 million due to no major workovers performed in 2014 comparedto one major workover in 2013, and lower other LOE of $0.3 million,partially offset by higher crude oil handling and transportationexpense of $2.2 million due to higher crude oil sales. General and Administrative Expense(G&A) For both three month periods ended June 30, 2014and June 30, 2013, G&A expense was $6.4 million. Stock-based compensation expense, a subset of G&Aexpense, was $0.8 million for the three months ended June 30, 2014and $0.9 million for the same period in 2013. Other G&Aexpenses increased $0.1 million to $5.6 million from $5.5 millionfor the same period in 2013. The $0.1 million increase is dueto a higher marine support vessel management fee of $0.5 millionand higher indirect charges from our Block Z-1 partner of $0.3million, partially offset by lower salary and related costs of $0.5million due to fewer employees and lower other G&A expenses of$0.2 million.
For the six months ended June 30, 2014, G&Aexpense increased by $0.7 million to $12.6 million from $11.9million for the same period in 2013. Stock-based compensationexpense, a subset of G&A expense, was $1.6 million for the sixmonths ended June 30, 2014 and $1.6 million for the same period in2013. Other G&A expenses increased $0.7 million to $11.0million from $10.3 million for the same period in 2013. The$0.7 million increase is due to higher indirect charges from theCompany's Block Z-1 joint venture partner of $1.1 million and ahigher marine support vessel management fee of $0.8 million,partially offset by lower salary and related costs of $1.2 milliondue to fewer employees.Geological, Geophysical and EngineeringExpense (GG&E) For the three months ended June 30, 2014,GG&E expense increased $0.6 million to $1.3 million comparedwith $0.7 million for the same period in 2013. For the sixmonths ended June 30, 2014, GG&E expense increased $1.0 millionto $2.1 million compared with $1.1 million for the same period in2013. The increase in the first half 2014 GG&E expense isdue to higher environmental impact assessment work to prepare forseismic programs. Depreciation, Depletion and Amortization Expense(DD&A) For the three months ended June 30, 2014,DD&A expense decreased $2.5 million to $5.5 million from $8.0million for the same period in 2013. For the six months endedJune 30, 2014, DD&A expense decreased $2.8 million to $12.1million from $14.9 million for the same period in 2013. For the three month and six-month periods endedJune 30, 2014, compared with the same periods last year, depletion decreased due to reserves added to thedepletion base in 2014. Standby Costs For the three months ended June 30, 2014, nostandby costs were incurred. During the three months endedJune 30, 2013, the Petrex-28 rig was on standby and $2.3 million instandby costs were incurred.
For the six months ended June 30, 2014, therewere no standby costs incurred. During the six months endedJune 30, 2013, the Company incurred $3.4 million in standby costsas the Petrex-10 rig was either partially or fully on standby fortwo months and the Petrex-28 rig was either partially or fully onstandby for approximately five months.Other Expense For the three months ended June 30, 2014, totalother expense decreased $2.6 million to $4.8 million compared with$7.4 million for the same period in 2013. During the threemonths ended June 30, 2014, other expense includes approximately$3.6 million of net interest expense, while for the same period in2013, net interest expense was $4.3 million. The decrease of$0.7 million in net interest expense is due to higher interestcapitalized of $0.6 million from a higher average construction inprogress and lower interest expense of $0.1 million. For the six months ended June 30, 2014, totalother expense decreased $4.1 million to $8.5 million compared with$12.6 million for the same period in 2013. For the six monthsended June 30, 2014, net interest expense was $7.4 million whilefor the same period in 2013, net interest expense was $8.6million. The decrease of $1.2 million in net interest expenseis due to higher interest capitalized of $0.9 million from a higheraverage construction in progress, and lower interest expense of$0.3 million resulting from a lower average interest cost of debtoutstanding between the periods. In April 2014, $26.0 million of the aggregateprincipal amount of the 2015 Convertible Notes were exchanged foran additional $25.0 million aggregate principal amount of 2017Convertible Notes in a private transaction. As a result ofthe exchange during the second quarter of 2014, a $1.2 million losson extinguishment of debt was recorded in the financial results forthe three and six-month periods ended June 30, 2014.
In May 2013, the remaining $30.5 million of the$75.0 million secured debt facility was retired and in September2013 the remaining $36.0 million of the $40.0 million secured debtfacility was retired. As a result of the $30.5 millionprepayment during the second quarter of 2013, $2.4 million of feesand a prepayment premium were incurred as well as $1.4 million ofunamortized debt issue costs. These items were reported as a$3.8 million loss on extinguishment of debt in the financialresults for the three and six-month periods ended June 30,2013.Income Taxes For the three months ended June 30, 2014, the Company recognizedan income tax expense of $2.1 million on a loss before income taxesof $0.4 million. For the comparable 2013 period, the Companyrecognized an income tax benefit of $0.4 million on a loss beforeincome taxes of $20.0 million. For the six months ended June 30, 2014, the Company recognizedan income tax expense of $4.1 million on a loss before income taxesof $2.0 million. For the comparable 2013 period, the Companyrecognized an income tax benefit of $47,000 on a loss before incometaxes of $32.5 million. The $4.1 million of income tax expense for the six months endedJune 30, 2014 relates to the Company's foreign operations which hadincome before tax of $7.9 million. The difference on theincome tax of $4.1 million from the 22% statutory rate provided forunder the Block Z-1 License Contract is due to foreign withholdingon USA tax entities, deferred tax adjustments related to oilinventory, deferred tax adjustments on certain marine transactionsand tax return to tax accrual adjustments. Liquidity, Capital Resources and CapitalExpenditures Liquidity At June 30, 2014, the Company had cash and cashequivalents of $67.2 million, restricted cash of $5.1 million, anda working capital deficit of $6.7 million.
Capital ResourcesAt June 30, 2014, outstanding long-term debt andshort-term debt consisted of the 2015 and 2017 Convertible Noteswith an aggregate principal amount outstanding of $228.6million. At June 30, 2014, the current and long-term portionsof aggregate principal amounts were approximately $59.9 million and$168.7 million, respectively. Capital and ExploratoryExpenditures The Company's non-Block Z-1 total capital andexploratory expenditures for the second quarter ended June 30, 2014were $8.4 million, excluding capitalized interest of $3.0 million. For the six-month period, capital and exploratoryexpenditures were $15.5 million, excluding capitalized interest of$5.9 million. The majority of these capital and exploratoryexpenditures related to the three-well exploratory drilling programongoing at Block XXIII. For Block Z-1, Pacific Rubiales provided 100% ofthe funding for the Company's capital and exploratory expendituresof $69.9 million for the six months ended June 30, 2014. These capital expenditures include approximately $32.1million related to the CX-15 development drilling program, $31.0million related to the development drilling program in Albacora andother expenditures of $0.9 million. At June 30, 2014, theCompany's remaining carry amount from Pacific Rubiales was $45.6million. Conference Call for Second quarter 2014Results The Company will host a conference call and livewebcast to discuss results for the second quarter ended June 30,2014 on Friday, August 8, 2014, at 10:00 a.m. CDT (11:00 a.m.EDT). The event may be accessed via the Investor Relations,Events & Presentations section of the Company's website at www.bpzenergy.com, or byaccessing the 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 at the InvestorRelations section of the Company's website. 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 are required 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. andSubsidiaries Consolidated Statements of Operations(Unaudited) (In thousands, except per sharedata)
|2Q 2014||1Q 2014||2Q 2013||2014YTD||2013YTD|
|Oil revenue, net||$ 24,190||$ 20,904||$ 12,776||$ 45,094||$ 26,057|
|Total net revenue||24,255||20,976||12,815||45,231||26,127|
|Operating and administrative expenses:|
|Lease operating expense||6,744||5,223||8,102||11,967||14,775|
|General and administrative expense||6,375||6,197||6,451||12,572||11,926|
|Geological, geophysical and engineeringexpense||1,270||821||746||2,091||1,104|
|Depreciation, depletion and amortizationexpense||5,503||6,612||7,955||12,115||14,859|
|Total operating and administrativeexpenses||19,892||18,853||25,479||38,745||46,032|
|Operating income (loss)||4,363||2,123||(12,664)||6,486||(19,905)|
|Other income (expense):|
|Income (loss) from investment inEcuador property, net||(9)||(8)||216||(17)||169|
|Interest expense, net||(3,513)||(3,837)||(4,280)||(7,350)||(8,578)|
|Loss on extinguishment of debt||(1,245)||-||(3,786)||(1,245)||(3,786)|
|Gain (loss) on derivatives||(269)||30||1,277||(239)||729|
|Other income (expense)||(96)||67||(818)||(29)||(1,147)|
|Total other expense, net||(4,787)||(3,743)||(7,353)||(8,530)||(12,566)|
|Loss before income taxes||(424)||(1,620)||(20,017)||(2,044)||(32,471)|
|Income tax expense (benefit)||2,125||1,950||(377)||4,075||(47)|
|Net loss||$ (2,549)||$ (3,570)||$ (19,640)||$ (6,119)||$ (32,424)|
|Basic net loss per share||$ (0.02)||$ (0.03)||$ (0.17)||$ (0.05)||$ (0.28)|
|Diluted net loss per share||$ (0.02)||$ (0.03)||$ (0.17)||$ (0.05)||$ (0.28)|
|Basic weighted average common sharesoutstanding||116,342||116,042||115,935||116,193||115,862|
|Diluted weighted average common sharesoutstanding||116,342||116,042||115,935||116,193||115,862|
|June 30,||December 31,|
|Cash and cash equivalents||$ 67,201||$ 57,395|
|Income taxes receivable||1,973||2,134|
|Value-added tax receivable||1,494||10,490|
|Prepaid and other current assets||6,365||5,419|
|Total current assets||112,684||115,686|
|Property, equipment and construction inprogress, net||224,806||217,753|
|Other non-current assets||4,634||5,065|
|Investment in Ecuador property,net||517||534|
|Deferred tax asset||60,593||63,602|
|Total assets||$ 407,343||$ 406,749|
|LIABILITIES AND STOCKHOLDERS'EQUITY|
|Accounts payable||$ 2,643||$ 3,127|
|Accrued interest payable||4,883||5,119|
|Derivative financial instruments||269||30|
|Current maturity of long-term debt||58,169||-|
|Total current liabilities||119,373||44,016|
|Asset retirement obligation||1,730||1,564|
|Other non-current liabilities||-||16,755|
|Long-term debt, net||152,787||206,939|
|Commitments and contingencies|
|Preferred stock, no par value, 25,000authorized; none issued and outstanding||-||-|
|Common stock, no par value, 250,000authorized; 118,553 and 117,526 shares issued and outstanding at June 30, 2014 andDecember 31, 2013, respectively||571,158||569,061|
|Total liabilitiesand stockholders' equity||$ 407,343||$ 406,749|
|ThreeMonthsEnded June 30,||Six MonthsEnded June 30,|
|Net loss||$ (2,549)||$ (19,640)||$ (6,119)||$ (32,424)|
|Loss on extinguishment of debt||1,245||3,786||1,245||3,786|
|Income tax expense (benefit)||2,125||(377)||4,075||(47)|
|Depreciation, depletion and amortizationexpense||5,503||7,955||12,115||14,859|
|Geological, geophysical and engineeringexpense||1,270||746||2,091||1,104|
|Other (income) expense||(240)||564||(304)||931|
|(Gain) loss on derivatives||269||(1,277)||239||(729)|
|EBITDAX (a)||$ 11,136||$ (3,963)||$ 20,692||$ (3,942)|
CONTACT: INVESTOR AND MEDIA CONTACT: A. Pierre Dubois Investor Relations & Corporate Communications BPZ Energy 1-281-752-1240 firstname.lastname@example.org