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HOUSTON--(BUSINESS WIRE)--BPZ Resources, Inc. (AMEX:BZP) announced today it has signed a Mandate Letter and Facility Term Sheet with a large international bank to underwrite and structure, on an exclusive basis, a $200 million reserve based facility. This facility is in addition to the initial tranche of senior debt in the amount of $15 million with International Finance Corporation (IFC) which, as previously announced, was closed last week. Both the bank and IFC facilities will be governed by a Common Terms Agreement, ensuring cooperation among the lenders.
This second tranche of senior debt is expected to close in fourth quarter 2008. The Company will draw down on this facility only when necessary. The facility is for a term ending in December 2012 at a rate of LIBOR plus 2.75%, currently equivalent to 5.85% based on the current six month LIBOR rate of 3.1%, and is subject to a semi-annual borrowing base determination based on the value of oil reserves.
The offer under this Mandate Letter is subject to the lender obtaining credit committee approval for the facility and completion of due diligence as reasonably required.
Manolo Zuñiga, President and Chief Executive Officer, stated, “Step by step we are moving toward getting the full $215 million of senior debt in place to give the Company additional flexibility to pursue the various projects in our acreage in northwest Peru. This senior debt package gives a positive indication of the strength of our assets. Again, as we stated earlier this week, this reserve-based facility will only be used as needed, and it will not be disbursed all at once. We are committed to growing the asset base of the Company in the most efficient way possible, and access to this financing, as well as cash flow from Corvina oil sales, should keep the Company from having to access the capital markets to fund our drilling campaign.”
About BPZ Energy
Houston based BPZ Energy is an oil and gas exploration and production company which has exclusive license contracts for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru. It also owns a minority working interest in a producing property in southwest Ecuador. The Company is currently executing the development of the Corvina oil discovery, the redevelopment of the Albacora oil field, and the exploration of Block XIX, in parallel with the execution of an integrated gas-to-power strategy, which includes generation and sale of electric power in Peru and the development of a regional gas marketing strategy. The Company’s website at www.bpzenergy.com provides additional information about the Company’s plans, including photographs and other information with respect to its operations.
Forward Looking Statements
This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are based on our current expectations about our company, our properties, our estimates of required capital expenditures and our industry. You can identify these forward-looking statements when you see us using words such as “project”, "expect," “will,” “indicate,” "estimate," "believes," "plans" and other similar expressions. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements. Such uncertainties include the success of our project financing efforts, including final documentation and execution of debt financing documents, accuracy of well test results, and reserves reports, well refurbishment efforts, successful production of indicated reserves, and the successful management of our capital development project, and other normal business risks. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. We caution you not to place undue reliance on those statements.
BPZ Resources, Inc.
Greg Smith, 281-556-6200
Director of
Investor Relations and
Corporate Communications