BPZ Energy announces receipt of Corvina CX-15 environmental permit to begin drilling and provides third quarter and nine month 2012 financial results

Friday, Nov 09, 2012

BPZ Energy (NYSE:BPZ) (BVL:BPZ), an independent oil and gas exploration and production company, today announced receipt of the necessary permit to begin operations at the new CX-15 platform at the Corvina Field. In addition, the Company provided financial and operational results for the three and nine months ended September 30, 2012.

PRESIDENT AND CEO MANOLO ZÚÑIGA COMMENTED, "We are very excited to return to drilling at the Corvina field with the new CX-15 platform. Interest has been high in this project due to the state-of-the-art design and its importance to our Company. Our teams worked extremely hard to achieve this very important milestone which is helping redefine our next phase of growth. Enhancing shareholder value is a priority for our Company, and this new drilling program should help us attain improved production and cash flow, as well as profitability."

Financial Summary

For the three months ended September 30, 2012, the Company reported an operating loss of $13.2 million and a net loss of $17.1 million, or $0.15 per share, compared to operating income of $7.1 million and net income of $5.7 million, or $0.05 per share, for the same period last year.

The operating loss for the third quarter of 2012, compared to operating income in the same period last year, was due to higher operating expenses, mainly increased geological, geophysical and engineering expenses related to 3D seismic acquisition activity underway at Block Z-1. Operating results also included $1.5 million of charges related to the partial abandonment of the pre-existing Piedra Redonda offshore platform. Higher overall operating expenses were partly offset by $1.4 million of lower general and administrative expenses compared to the same period last year. In addition, the Company experienced lower sales volumes and prices compared to the same period last year, which also contributed to the higher operating loss.

For the nine months ended September 30, 2012, the Company reported an operating loss of $38.9 million and a net loss of $52.9 million or $0.46 per share, compared to operating income of $16.4 million and a net loss of $2.1 million, or $0.02 per share, for the same period last year.

The operating loss for the nine months ended September 30, 2012, compared to operating income in the same period last year, was due to increased geological, geophysical and engineering expenses of $24.8 million mainly related to the offshore 3D seismic acquisition activity underway at Block Z-1 and increased lease operating expense of $9.2 million. Operating results also included $2.3 million of charges related to the partial abandonment of the pre-existing Piedra Redonda offshore platform. Higher overall operating expenses were partly offset by $2.3 million of lower general and administrative expenses, compared to the same period last year. In addition, for the first nine months of 2012, lower sales volumes were partly offset by higher sales prices compared to the same period last year.

The net loss for the nine-month period ended September 30, 2012 included debt extinguishment costs of $7.3 million related to the prepayment of a portion of the $75 million secured debt facility.

Earnings before interest, income taxes, depreciation, depletion and amortization and exploration expense and certain charges ("EBITDAX") (non-GAAP measure) was $6.0 million and $30.7 million for the three and nine months ended September 30, 2012, respectively, compared to $16.9 million and $53.4 million for the same periods last year, respectively.

Included below in the release for reference are the Company's Consolidated Statements of Operations and a reconciliation of EBITDAX to U.S. GAAP for the three and nine months ended September 30, 2012 compared to the same periods last year.

Source: BPZ Energy

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