Houston, Nov. 6, 2014 (GLOBE NEWSWIRE) -- BPZ Energy, (NYSE: BPZ)(BVL: BPZ), an independent oil and gas exploration and productioncompany, today reported third quarter and nine-month 2014 financialresults as well as an operational update. 

President and CEO Manolo Zunigacommented , "We continue to focus onincreasing production and cash flow by drilling additional wellsand optimizing production at the Corvina and Albacora fields atBlock Z-1.  This has resulted in growth rates of over 80% inyear-over-year production and lower unit operating costs. Drilling and completion times are improving, with the new CX15-10Ddrilled and completed in 40 days.  This well produced 515 bopdgross, or 263 bopd net to BPZ, over the last 24 hours.

While we continue to convert PUDs to PDPs at both fields, atAlbacora we have also discovered deeper oil.  The AlbacoraA-27 development well is being drilled, targeting the new deepersands tested in other wells at the field, which could contributepositively to the year-end 2014 reserve evaluation.

We are also excited about the recently announced results of ourMancora gas discovery in Block XXIII and potential first gassales.  Our geologic models show that the Mancora gas playextends along a trend to the Piedra Redonda offshore field whichfurther supports developing the gas market in northwest Peru, aswell as providing potential exports to Ecuador.  In recentmonths both countries have been collaborating closely to lay thegroundwork for future gas projects in Peru and we have been a partof those discussions, along with our Block Z-1 partner.  Thisincludes our gas to power project, which we envision should be theanchor project for gas development in the region.  Given thedelay in completing the gas to power project, and the options weare now pursuing, we were required this quarter to record anon-cash impairment in the value of the assets, mainly forcapitalized interest.  This in no way impacts our intendedpurpose to develop the project.

Fourth quarter production at Block Z-1 is tracking ahead ofthird quarter levels with recent production of approximately 5,600bopd gross, or 2,856 bopd net to BPZ, and we now expect to exit theyear at a rate of 6,500 to 7,000 bopd gross, or 3,315 to 3,570 bopdnet to BPZ.  While Block Z-1 drilling and completion times areimproving, the production growth timeline has shifted due toproduction logging tool (PLT) tests on several wells, and thetiming of recommended work programs at both Corvina and Albacorafields based on those tests.  At the current pace,nevertheless, we expect to achieve the best quarterly average grossproduction since drilling resumed at Block Z-1 last year, and alsothe highest quarterly rate ever achieved at Block Z-1. 

Next year's offshore and onshore capitalprograms are being reviewed in light of recent oil marketvolatility, but generally we anticipate further oil developmentdrilling at the Corvina and Albacora fields, new drilling at Delfinto develop its oil potential and, if conditions permit, drilling atPiedra Redonda targeting deeper oil beneath the Mancoraformation.  In this respect, construction has begun on twodrilling platforms for Delfin and Piedra Redonda scheduled to beinstalled by mid-2015.  We believe we should be able to meetour capital spending plans and upcoming debt maturity with cash onhand, cash from operations, possible asset sales and additionalfinancings, or a combination thereof.  

All of these initiatives are in line with ourcommitment to expand our oil and gas production and reserve base inmultiple fields, which should allow us to increase cash flow toenhance shareholder value."

Summary Results:

Results for the third quarterended September 30, 2014, compared with the third quarter endedSeptember, 2013 were as follows: 
  • Operating loss of $40.1 million, compared with an operatingloss of $10.8 million.  Excluding the non-cash impairmentcharge for the gas to power project of $41 million, third quarter2014 operating income was $0.9 million.
  • Net loss of $45.3 million, or $0.39 per share, compared with anet loss of $15.3 million, or $0.13 per share.  Excluding thethird quarter 2014 non-cash impairment charge, the net loss forthird quarter 2014 was $4.3 million, or $0.04 per share.
  • The company's 51% share of production from Block Z-1 was 2,436bopd compared with 1,330 bopd, or an increase of 83% year-overyear.
  • Earnings before interest, income taxes, depletion,depreciation, amortization, and exploration expense (EBITDAX) was apositive $5.7 million compared with a negative $67,000. (EBITDAX is a non-GAAP measure.  Please also see thereconciliation to net loss included at end of the pressrelease.)

Results for the nine monthsended September 30, 2014, compared with the nine months endedSeptember, 2013 were as follows:
  • Operating loss of $33.6 million, compared with an operatingloss of $30.8 million.  Excluding the third quarter 2014non-cash impairment charge, nine-month 2014 operating income was$7.4 million.   
  • Net loss of $51.4 million, or $0.44 per share, compared with anet loss of $47.7 million or $0.41 per share.  Excluding thethird quarter 2014 non-cash impairment charge, the net loss for thenine-month 2014 period was $10.4 million, or $0.09 per share.
  • The company's 51% share of production from Block Z-1 was 2,540bopd compared with 1,414 bopd, or an increase of 80%year-over-year.
  • EBITDAX was a positive $26.4 million, compared with a negative$4.0 million.

Improved results for the three and nine-month2014 periods, excluding the impairment charge for the gas to powerproject, when compared with the same periods last year, weredue to higher revenues from increased production and lower overallexpenses.

Production

BPZ Energy maintains a 51% working interest inoffshore Block Z-1, and the Company's respective share ofproduction is referenced as net oil production.   

Net oil production from the Corvina and Albacorafields for the three months ended September 30, 2014 was 224thousand barrels, or 2,436 bopd, compared to net oil production of122 thousand barrels, or 1,330 bopd for the same period in2013.  For the nine months ended September 30, 2014, net oilproduction was 693 MBbls, or 2,540 bopd, compared to net oilproduction of 386 MBbls, or 1,414 bopd for the same period in2013. 

The increased net oil production in the firstnine months of the year is a result of the reinitiated drillingcampaign at 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. The increasedproduction in the Albacora field is from the A-18D, A-19D, A-21Dand A-26D wells and the increased production from the CX-15platform is from the CX15-1D, CX15-2D, CX15-3D, CX15-5D and CX15-7Dwells.

Revenue

For the three months ended September 30, 2014,oil revenue after royalty payments increased by $7.7 million to$20.2 million from $12.5 million for the same period in 2013. Total oil sales for the three months ended September 30, 2014 werehigher at 215,000 barrels compared with 123,000 barrels for thesame period in 2013.  Net oil revenue rose due to increasedoil volumes sold of 92,000 barrels, offset by a decrease of $7.43per barrel in the average net realized price received from $101.46to $94.03 perbarrel.        

For the nine months ended September 30, 2014,oil revenue after royalty payments increased by $26.7 million to$65.3 million from $38.6 million for the same period in 2013. Total sales for the nine months ended September 30, 2014 were667,000 barrels compared to 388,000 barrels for the same period in2013.   Net oil revenue rose due to increased oil salesvolumes of 279,000 barrels, offset by a decrease of $1.50 in theaverage per barrel sales price received from $99.42 to $97.92 perbarrel. 

The increase in amount of oil sold for the threeand nine months ended September 30, 2014 compared to the sameperiods in 2013 is due to increased net oil production in BlockZ-1. 

Expenses

Lease Operating Expense (LOE)

For the three months ended September 30, 2014,lease operating expenses increased by $4.1 million to $9.4 million($43.64 per Bbl) from $5.3 million ($43.24 per Bbl) for the sameperiod in 2013.  The increase is due to additional operatingexpenses with the offshore joint venture partner of $2.4 million,higher crude oil transportation expense of $2.3 million due tohigher crude oil sales, and higher maintenance and repairs onvessel support services of $0.5 million, partially offset by lowercosts of $0.6 million associated with the change in oil inventoryin the three months ended September 30, 2014, compared to thechange in oil inventory in the three months ended September 30,2013, workover expenses decreasing $0.3 million due to no majorworkovers performed in 2014 compared to one major workover in 2013and lower other lease operating expenses of $0.2 million.

For the nine months ended September 30, 2014,lease operating expenses increased by $1.3 million to $21.4 million($32.01 per Bbl) from $20.1 million ($51.79 per Bbl) for the sameperiod in 2013.  The increase is due to higher crude oiltransportation expense of $4.6 million due to higher crude oilsales, additional operating expenses with the offshore jointventure partner of $2.4 million and higher maintenance and repairson vessel support services of $1.2 million, partially offset byworkover expenses decreasing $5.0 million due to no major workoversperformed in 2014 compared to one major workover in 2013, lowercosts of $1.7 million associated with the change in oil inventoryin the nine months ended September 30, 2014, compared to the changein oil inventory in the nine months ended September 30, 2013, andlower other lease operating expenses of $0.2 million.

General and Administrative Expense(G&A)

For the three months ended September 30, 2014,G&A expenses decreased $1.4 million to $5.2 million from $6.6million for the same period in 2013.  Stock-based compensationexpense, a subset of G&A expenses, was $0.7 million for thethree months ended September 30, 2014 and $1.0 million for the sameperiod in 2013.  Other G&A expenses decreased $1.1 millionto $4.5 million from $5.6 million for the same period in2013.  The $1.1 million decrease is due to lower salary andrelated costs of $1.1 million due to fewer employees.

For the nine months ended September 30, 2014,G&A expenses decreased by $0.7 million to $17.8 million from$18.5 million for the same period in 2013.  Stock-basedcompensation expense, a subset of G&A expenses, was $2.3million for the nine months ended September 30, 2014 and $2.6million for the same period in 2013.  Other G&A expensesdecreased $0.4 million to $15.5 million from $15.9 million for thesame period in 2013.  The $0.4 million decrease is due tolower salary and related costs of $2.3 million due to feweremployees and lower other G&A expenses of $0.7 million,partially offset by a $1.5 million increase due to higher indirectadministrative charges from our Block Z-1 partner and a higher shipmanagement fee of $1.1 million.

Geological, Geophysical and Engineering(GG&E)

For the three months ended September 30, 2014,geological, geophysical and engineering expenses decreased $0.2million to $0.7 million compared to $0.9 million for the sameperiod in 2013.  This decrease is due to lower environmentalimpact assessment work costs to prepare for seismic programs.

For the nine months ended September 30, 2014,geological, geophysical and engineering expenses increased $0.8million to $2.8 million compared to $2.0 million for the sameperiod in 2013.  This increase is due to higher overallgeological, geophysical and engineering expenses, partially offsetby lower environmental impact assessment work costs to prepare forseismic programs.

Depreciation, Depletion and Amortization Expense(DD&A)

For the three months ended September 30, 2014,DD&A expense decreased $3.1 million to $4.1 million from $7.2million for the same period in 2013.  For the nine monthsended September 30, 2014, DD&A expense decreased $5.9 millionto $16.2 million from $22.1 million for the same period in2013.

For the three month and nine-month periods ended September 30,2014, compared with the same periods last year, the decrease inDD&A is due to reserves added to the depletion base in2014. 

Standby Costs

For the three and nine months ended September30, 2014, no standby costs were incurred. 

During the three months ended September 30,2013, the Company incurred standby costs of $0.7 million for thePetrex-21 rig which was on standby for approximately twomonths.

During the nine months ended September 30, 2013,the Petrex-10 rig was either partially or fully on standby forthree months and two rigs, the Petrex-28 rig and Petrex-21 rig,were partially or fully on standby for approximately fivemonths. 

Other Operating Expense

For the three and nine months ended September 30, 2014, theCompany incurred no other operating expense.

For the three and nine months ended September 30, 2013, theCompany reported $2.7 million of other operating expense. Expensed costs related to historical pre-development drillingstudies for drilling locations and platform technologies andassociated capitalized interest as these locations and technologiesmay change and the Company does not see a future value of thesestudies.

Asset Impairments

For the three and nine months ended September 30, 2014, theCompany incurred impairments of $41.0 million related to the gas topower project asset, due to recent developments that may change theextent or manner in which the asset may be used. 

For the three and nine months ended September 30, 2013, theCompany incurred no asset impairments. 

Other Income (Expense)

For the three months ended September 30, 2014,total other expense decreased $7.7 million to $2.6 million comparedto $10.2 million during the same period in 2013.  During thethird quarter of 2013, the Company recognized a $3.4 million losson extinguishment of debt from repayment of the $40.0 millionsecured debt facility and expenses of $2.5 million relating to theissuance of the 2017 Convertible Notes were also included in otherexpense. There were no similar expenses in the third quarter of2014.  An improved gain on derivatives, higher interest incomeand lower net interest expense also contributed to lower otherexpenses during the recent quarter.

For the nine months ended September 30, 2014,total other expense decreased $11.7 million to $11.1 millioncompared to $22.8 million during the same period in 2013 mainly dueto a lower loss on extinguishment of debt, lower other expense andlower net interest expense.

Income Taxes

For the three months ended September 30, 2014, the Companyrecognized an income tax expense of $2.6 million on a loss beforeincome taxes of $42.7 million.  For the comparable 2013period, the Company recognized an income tax benefit of $5.8million on a loss before income taxes of $21.1 million.  

For the nine months ended September 30, 2014, the Companyrecognized an income tax expense of $6.7 million on a loss beforeincome taxes of $44.4 million.  For the comparable 2013period, the Company recognized an income tax benefit of $5.8million on a loss before income taxes of $53.6 million.

The $6.7 million of income tax expense for the nine months endedSeptember 30, 2014 relates to the Company's exploration andproduction unit which had income before tax and a valuationadjustment recorded on the deferred tax balances of one of theCompany's subsidiaries engaged in the development of the gas topower project.  The difference on the income tax of $6.7million from the 22% statutory rate provided for under the BlockZ-1 License Contract is due to foreign withholding on USA taxentities, deferred tax adjustments related to oil inventory,deferred tax adjustments on certain marine transactions, deferredtax valuation allowance adjustments, additional valuationallowances on certain foreign business units, and tax return to taxaccrual adjustments.

Liquidity, Capital Expenditures and CapitalResources

Liquidity

At September 30, 2014, the Company had cash andcash equivalents of $79.0 million, restricted cash of $4.1 million,and a working capital deficit of $9.9 million. 

Capital and ExploratoryExpenditures 

For the three months ended September 30, 2014,the Company's non-Block Z-1 total capital and exploratoryexpenditures were $4.4 million, excluding capitalized interest of$3.4 million.  For the nine-month period ended September 30,2013, capital and exploratory expenditures were $19.9 million,excluding capitalized interest of $9.3 million.

For Block Z-1, Pacific Rubiales provided 100%funding for gross capital and exploratory expenditures of $112.7million for the nine months ended September 30, 2014.  Thesegross capital expenditures include approximately $46.5 millionrelated to the CX-15 development drilling program, approximately$45.5 million related to the development drilling program inAlbacora and expenditures incurred related to the Piedra Redondaplatform of approximately $4.9 million, the Delfin platform ofapproximately $4.6 million, the CX-15 platform of approximately$2.0 million, and $9.2 million of various other project costs.

The Company's remaining carry amount for BlockZ-1 capital and exploratory expenditures at September 30, 2014 was$23.8 million.

Revision to the 2014 Estimated Capital and ExploratoryExpenditures Budget

The Company's $21.0 million estimated plannedcapital and exploratory expenditures onshore include $16.0 millionfor shallow drilling activities at Block XXIII as well as $5.0million of other geological, geophysical and engineeringactivities.     

The Company's 51% share of the offshore BlockZ-1 capital investments, of which $81.3 million is to be fullycarried by Pacific Rubiales, is estimated at $103.0 million ($202.0million gross).  The planned activities at Block Z-1 include$37.0 million of CX-15 developmental drilling for 6 wells, $30.0million of Albacora developmental drilling for 4 wells plus asidetrack, $18.0 million for two platforms, one at Delfin and oneat Piedra Redonda and $18.0 million for projects and engineeringand other expenditures.  The total cost for the fabricationand installation of the two platforms is estimated to be $32.1million ($62.9 million gross), which will be paid in 2014 and2015.

The Company's total estimated onshore andoffshore capital expenditures for 2014, excluding capitalizedinterest, are approximately $42.7 million.  This includes$21.0 million for the Company's three onshore blocks in which theCompany holds a 100% working interest and $21.7 million for thecapital and exploratory expenditures for offshore Block Z-1, whichwould be the amount that could exceed the $81.3 million carryamount available to the Company from Pacific Rubiales, should theestimated investments all be incurred.

Capital Resources

At September 30, 2014, outstanding long-termdebt and short-term debt consisted of the 2015 and 2017 ConvertibleNotes with an aggregate principal amount outstanding of $228.6million.  At September 30, 2014, the current and long-termportions of aggregate principal amounts were approximately $59.9million and $168.7 million, respectively. 

Major sources of funding for the Company to date have been oilsales, equity and debt financing activities and asset sales. With the current cash balance, current and prospective Corvina andAlbacora oil development cash flow and the carry amount fundingrelated to our 51% participating interest in Block Z-1, andadditional financing the Company believes it will have sufficientcapital resources to execute its planned development projects aswell as service its current obligations.

O perations Update

Offshore Block Z-1 (51% working interest)

Block Z-1 Production

For the fourth quarter 2014 period throughNovember 5, Block Z-1 production from the Albacora and Corvinafields has averaged approximately 5,350 bopd gross, or 2,729 bopdnet to BPZ.  For the last 24 hours production has averaged5,560 bopd gross, or 2,836 net to BPZ.

CX-15 Platform DrillingCampaign

The CX15-10D well was drilled to a totalmeasured depth of 8,035 feet and completed in late October 2014. For the past 24 hours, the well has averaged production ofapproximately 515 bopd gross, or 263 bopd net to BPZ.  Averageproduction for the last ten days has been approximately 375 bopdgross, or 191 bopd net to BPZ. 

The CX15-14D is currently being drilled and isat a depth of approximately 2,700 feet.  Estimated total depthof the well is 7,725 feet, with results expected in December.

Albacora A-27D Well inProgress

The A-27D well is currently being drilled insidethe Lower Zorritos and is approximately 1,000 feet from estimatedtotal depth of 14,500 feet.  Results are expected inDecember.

Well Optimization

A work plan has been developed for threeAlbacora wells (A-21D, A-26D and A-19D) and three Corvina wells(CX11-19D, CX15-5D and CX15-2D) based on the analysis of PLTsurveys and individual well production.  An additionalwireline line unit is being sought to expedite the work. It isanticipated that all the work can be completed by first quarter2015.  The A18D-ST well continues to be evaluated to furtheroptimize oil production.  Additional work is planned on theCX15-1D to retrieve a section of wireline cable lost in the holewhile cleaning out sand, and then proceed with a plan to restoreproduction and perforate a deeper oil sand.

A gas lift program for the Albacora, CX-11 andCX-15 platforms is also expected to be fully implemented by thefirst quarter of 2015.  Gas lift is intended to help lift thefluid column from the respective wells.

Prospect Appraisal

T-Rex Engineering and Construction has beenawarded the contract for two drilling platforms for Delfin andPiedra Redonda prospects located offshore Peru in Block Z-1, inwater depths of 200 ft. and 250 ft. respectively. Construction of decks is underway at T-Rex facilities in Texas withjacket and pile construction is underway in Louisiana. Installation of the Delfin and Piedra Redonda platforms isscheduled for mid-year 2015.

At Delfin the Company is targeting oil in theZorritos formation, which produced in the adjacent Corvina field aswell as the Albacora field.  A prior operator previouslytested oil in the Zorritos formation.  The first well will bedrilled down to the Heath formation targeting additional oilreserves.  At Piedra Redonda the Company is appraising gas inthe Mancora formation, which was discovered by a previous operatorand is believed to anchor the multi-Tcf potential of the Mancoraformation which runs onshore into Block XXIII where the Companyrecently tested gas.  The Piedra Redonda platform will alsoexplore for oil in the deeper Eocene age formations, which has beenmapped with the Block Z-1 acquired 3D seismic.

Conference Call Information

The Company has scheduled a conference call andwebcast to discuss third quarter 2014 financial and operationalresults on Friday, November 7, 2014 at 10:00 a.m. CST (11:00 a.m.EST).  The live conference call may be accessed via theInvestor Relations section of the Company's website at www.bpzenergy.com or by accessingthe following dial-in numbers.  A replay will also beavailable on the Company's website. 

USA and CanadaDial-In:               877-293-5457

InternationalDial-In:                     707-287-9344    

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 Albacora fieldswith joint venture partner Pacific Rubiales Energy Corp. Onshore, the Company holds 100% working interests in Blocks XIX,XXII and XXIII which total 1.6 million acres. In southwest Ecuador,the Company owns a non-operating net profits interest in aproducing property.  BPZ Energy trades as BPZ Resources, Inc.on both the New York Stock Exchange and the Bolsa de Valores inLima 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.  Theseforward looking statements are based on BPZ Energy's (our) currentexpectations about our company, our properties, our estimates ofrequired capital expenditures and our industry.  You canidentify these forward-looking statements when you see us usingwords such as "will," "expected," "estimated," and "prospective,"and other similar expressions.  These forward-lookingstatements involve risks 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 Certain InformationReleases

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 prospective resources included in this press release.  We may use certain terms in this press release such as"potential" and "prospective" resources which imply the existenceof quantities of resources which the SEC guidelines strictlyprohibit U.S. publicly registered companies from including inreported reserves in their filings with the SEC.  With respectto "probable" and "possible" reserves, we are required to disclosethe relative uncertainty of such classifications of reserves whenthey are included in our SEC filings. The definition of prospectiveresources has been excerpted from the Petroleum ResourcesManagement System approved by the Society of Petroleum Engineers(SPE) Board of Directors, March 2007.  Prospective resourcesare those quantities of petroleum estimated, as of a given date, tobe potentially recoverable from undiscovered accumulations byapplication of future development projects.  Prospectiveresources have both an associated chance of discovery and a chanceof development.  Prospective resources are further subdividedin accordance with the level of certainty associated withrecoverable estimates assuming their discovery and development andmay be sub-classified based on project maturity.  Further, thereserves estimates contained in this press release are not designedto be, nor are they intended to represent, an estimate of the fairmarket 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 as well as other governmental agencies orinstrumentalities.  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.  While PRE is subject to various confidentialityrequirements regarding us, information concerning the Company, suchas information concerning energy reserves, may be released by PREoutside of our control and may be released 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)
    ThreeMonths   NineMonths
    3Q 2014   2Q 2014   3Q 2013   2014YTD   2013YTD
Net revenue:                    
Oil revenue, net    $         20,174    $         24,190    $         12,500    $         65,268    $         38,557
Other revenue                  176                    65                    29                  313                    99
                     
Total net revenue            20,350            24,255            12,529            65,581            38,656
                     
Operating and administrative expenses:                    
Lease operating expense               9,383               6,744               5,319              21,350              20,094
General and administrative expense               5,259               6,375               6,572              17,831              18,498
Geological, geophysical and engineeringexpense                  705               1,270                  857               2,796               1,961
Depreciation, depletion and amortizationexpense               4,087               5,503               7,246              16,202              22,105
Standby costs                    -                      -                    705                    -                 4,073
Other operating expense                    -                      -                 2,683                    -                 2,683
Asset impairments              41,000                    -                      -                  41,000                    -  
                     
Total operating and administrativeexpenses               60,434              19,892              23,382              99,179              69,414
                     
Operating income (loss)           (40,084)              4,363           (10,853)           (33,598)           (30,758)
                     
Other income (expense):                    
Income (loss) from investment inEcuador    property, net                  242                    (9)                    (8)                  225                  161
Interest expense, net               (3,296)              (3,513)              (3,559)            (10,646)            (12,137)
Loss on extinguishment of debt                    -                (1,245)              (3,436)              (1,245)              (7,222)
Gain (loss) on derivatives                  241                (269)                (457)                     2                  272
Interest income                   428                  345                  128                  778                  175
Other expense                (195)                  (96)              (2,907)                (224)              (4,054)
                     
Total other expense, net               (2,580)              (4,787)            (10,239)            (11,110)            (22,805)
                     
Loss before income taxes             (42,664)                (424)            (21,092)            (44,708)            (53,563)
                     
Income tax expense (benefit)               2,628               2,125              (5,771)               6,703              (5,818)
                     
Net loss     $     (45,292)    $       (2,549)    $     (15,321)    $     (51,411)    $     (47,745)
                     
Basic net loss per share    $          (0.39)    $          (0.02)    $          (0.13)    $          (0.44)    $          (0.41)
Diluted net loss per share     $          (0.39)    $          (0.02)    $          (0.13)    $          (0.44)    $          (0.41)
                     
Basic weighted average common sharesoutstanding   116,399   116,342   116,009   116,262   115,911
Diluted weighted average common sharesoutstanding   116,399   116,342   116,009   116,262   115,911
                     

BPZ Resources, Inc. andSubsidiaries

Consolidated Balance Sheets

(In thousands)
    September 30,   December 31,
    2014   2013
     (Unaudited)       
ASSETS        
         
Current assets:        
Cash and cash equivalents     $          79,496    $         57,395
Accounts receivable                 6,597               21,630
Income taxes receivable                 2,007                 2,134
Value-added tax receivable                 2,273               10,490
Inventory                13,171               17,368
Restricted cash                       -                   1,250
Prepaid and other current assets                 5,082                 5,419
         
Total current assets               108,626             115,686
         
Property, equipment and construction inprogress, net               186,785             217,753
Restricted cash                  4,109                 4,109
Other non-current assets                 6,080                 5,065
Investment in Ecuador property,net                     509                   534
Deferred tax asset                58,203               63,602
         
Total assets     $        364,312    $        406,749
         
LIABILITIES AND STOCKHOLDERS'EQUITY        
         
Current liabilities:        
Accounts payable     $            6,688    $           3,127
Accrued liabilities                 11,837               11,246
Other liabilities                 40,849               24,494
Accrued interest payable                    324                 5,119
Derivative financial instruments                      -                       30
Current maturity of long-term debt                58,849                     -  
         
Total current liabilities               118,547               44,016
         
Asset retirement obligation                 2,920                 1,564
Other non-current liabilities                      -                 16,755
Long-term debt, net              153,780             206,939
         
Total long-term liabilities              156,700             225,258
         
Commitments and contingencies        
         
Stockholders' equity:        
Preferred stock, no par value, 25,000authorized; none issued and outstanding                       -                       -  
Common stock, no par value, 250,000authorized; 118,652 and 117,526 shares    issued and outstanding at September 30, 2014 andDecember 31, 2013,    respectively               572,062             569,061
Accumulated deficit            (482,997)            (431,586)
         
Total stockholders' equity                 89,065             137,475
         
   Total liabilities andstockholders' equity     $        364,312    $        406,749
         
         

Reconciliation of non-GAAPmeasure

The table below represents a reconciliation ofEBITDAX to the Company's net income (loss), which is the mostdirectly comparable financial measure calculated in accordance withgenerally accepted accounting principles in the United States ofAmerica.
    ThreeMonthsEnded September 30,   Nine MonthsEnded September 30,
    2014   2013   2014   2013
    (in thousands)
Net loss    $   (45,292)    $    (15,321)    $    (51,411)    $    (47,745)
Interest expense            3,296             3,559          10,646          12,137
Loss on extinguishment of debt               -               3,436             1,245             7,222
Income tax expense (benefit)            2,628          (5,771)             6,703            (5,818)
Depreciation, depletion and amortizationexpense            4,087             7,246          16,202          22,105
Geological, geophysical and engineeringexpense             705              857             2,796             1,961
Other operating expense               -               2,683                 -               2,683
Asset impairments         41,000                -            41,000                 -  
Other (income) expense             (475)             2,787             (779)             3,718
(Gain) loss on derivatives             (241)              457                 (2)             (272)
EBITDAX (a)    $   5,708    $        (67)    $   26,400    $   (4,009)
                 

(a) Earnings before interest, income taxes,depletion, depreciation and amortization, exploration expense andcertain non-cash charges ("EBITDAX") is a non-GAAP financialmeasure, as it excludes amounts or is subject to adjustments thateffectively exclude amounts, included in the most directlycomparable measure calculated and presented in accordance with GAAPin financial statements.  "GAAP" refers to generally acceptedaccounting principles in the United States of America. Non-GAAP financial measures disclosed by management are provided asadditional information to investors in order to provide them withan alternative method for assessing the Company's financialcondition and operating results.  These measures are not inaccordance with, or a substitute for, GAAP, and may be differentfrom or inconsistent with non-GAAP financial measures used by othercompanies. Pursuant to the requirements of Regulation G, wheneverthe Company refers to a non-GAAP financial measure, it alsopresents the most directly comparable financial measure presentedin accordance with GAAP, along with a reconciliation of thedifferences between the non-GAAP financial measure and suchcomparable GAAP financial measure.  Management believes thatEBITDAX may provide additional helpful information with respect tothe Company's performance or ability to meet its debt service andworking capital requirements.
CONTACT: A. Pierre Dubois         Director of Investor Relations & Corporate Communications         BPZ Energy         281-752-1240         pierre_dubois@bpzenergy.com