(Source: PrimeNewswire)
HOUSTON, Nov. 9, 2009 (GLOBE NEWSWIRE) -- BPZ Resources, Inc. (NYSE:BPZ) announces financial and operating results for the three and nine months ended September 30, 2009. For the third quarter the Company reported operating loss of $11.2 million and net loss of $9.0 million or $0.08 per share and operating loss of $29.5 million and net loss of $25.8 million or $0.26 per share for the nine months ended September 30, 2009. In addition, the Company had negative earnings before interest, income tax, depreciation and amortization (EBITDA; see the reconciliation and rationale for this non-GAAP measure below) of $4.9 million and $11.2 million for the three and nine months ended September 30, 2009, respectively. The table below illustrates the Company's Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008.
BPZ Resources, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
------------------ --------------------
2009 2008 2009 2008
-------- ------- --------- --------
Revenue $ 13,088 $ 33,440 $ 37,362 $ 44,843
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Operating and
administrative expenses:
Lease operating expense 9,591 3,582 21,445 6,942
General and
administrative expense 8,474 10,407 24,956 28,644
Geological, geophysical
and engineering expense 297 211 1,195 507
Depreciation, depletion
and amortization expense 5,881 5,673 19,267 7,947
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Total operating
expenses 24,243 19,873 66,863 44,040
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Operating income (loss) (11,155) 13,567 (29,501) 803
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Other income (expense):
Income (expense) from
investment in Ecuador
property, net of
amortization 172 153 79 659
Interest income 159 10 187 206
Other income (expense) 70 (68) (1,243) 157
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Total other income
(expense) 401 95 (977) 1,022
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Income (loss) before
income taxes (10,754) 13,662 (30,478) 1,825
Income tax expense
(benefit) (1,792) 5,051 (4,654) 5,292
-------- ------- --------- --------
Net income (loss) $ (8,962) $ 8,611 $ (25,824) $ (3,467)
======== ======= ========= ========
Basic net income (loss)
per share $ (0.08) $ 0.11 $ (0.26) $ (0.05)
Weighted average common
shares outstanding 113,929 78,585 99,391 76,933
Diluted net income (loss)
per share $ (0.08) $ 0.11 $ (0.26) $ (0.05)
Diluted weighted average
common shares outstanding 113,929 80,323 99,391 76,933
Production and Revenue
For the three months ended September 30, 2009 the Company's oil production and sales were approximately 213,943 barrels and 207,418 barrels, respectively, resulting in $13.1 million in Revenue. During the same period in 2008, the Company produced and sold approximately 329,089 barrels and 322,171 barrels, respectively, resulting in $33.4 million in Revenue. Total oil production and sales for the nine months ended September 30, 2009 were approximately 778,509 and 744,101 barrels, respectively, bringing total Revenue to $37.4 million for the year. During the same period in 2008, the Company produced and sold approximately 455,840 barrels and 437,243 barrels, respectively, resulting in $44.8 million in Revenue. For the quarter, average oil sales price, net of royalties, was $63.10 per barrel and $50.21 per barrel for the nine months ended September 30, 2009. In comparison, the average oil sales price, net of royalties, was $103.80 and $102.56 per barrel for the three and nine months ended September 30, 2008. The decrease in net revenue is primarily due to the $40.70 (or 39%) decrease in the average per barrel sales price received as well as decreased oil sales volumes from the CX-11 platform. Oil prices reached record levels during the third quarter of 2008 before sharply falling towards the end of the year. During the same period in 2009, oil prices have steadily risen from the lows seen at the beginning of the year but are considerably less than the oil prices received during the third quarter of the previous year. Third quarter oil production was negatively impacted by the CX11-21XD and the CX11-15D wells at various times and intervals being partially or fully suspended due to workovers and maintenance of the wells. The CX11-15D produced for approximately two of the three months in the period and the CX11-21XD produced for approximately one of the three months in the period.
Lease Operating
For the three and nine months ended September 30, 2009, lease operating expenses (LOE) were $9.6 million ($46.24 per Bbl) and $21.4 million ($28.82 per Bbl), respectively. This represents a $6.0 million increase from the third quarter 2008. This increase is due to the work-over expenses related to the CX11-20XD, CX11-21XD, and CX11-15XD wells to address the mechanical issues encountered, primarily gas channeling and water influx issues. Costs associated with the workover are allocated to LOE and are not considered capital expenditures. The decrease in the quarterly production also contributed to the increase in the per barrel amounts. LOE per barrel for the quarter and nine months ended, excluding the workovers and flex hoses would have been $18.92 and $15.72 per barrel, respectively.
General and Administrative
For the three and nine months ended September 30, 2009, general and administrative (G&A) expenses were $8.5 million and $25.0 million, respectively. Included in G&A for the three and nine months ended September 30, 2009 is stock-based compensation expense of $2.9 million and $9.9 million, respectively.
General and administrative expense of $5.6 million, excluding stock-based compensation, is slightly lower than the average quarterly G&A from the previous year, excluding stock-based compensation, of $5.9 million. However, the Company is maintaining its target of an overall year-on-year reduction of its G&A expense, excluding stock-based compensation, of approximately 15%.
Stock-based compensation of $2.9 million is lower than the same quarter ended 2008 primarily due to the decrease in fair market value of awards granted in 2009 as a result of the decline in the stock price of BPZ.
Depreciation, Depletion and Amortization
For the three and nine months ended September 30, 2009, depreciation, depletion and amortization expense was $5.9 million and $19.3 million, respectively. The overall increase as compared to the previous year was primarily due to increased production, increased average costs per well being depleted and a reduction in the reserve base from 2008 as a result of decreased oil prices at the end of 2008.
Other Income and (Expense)
For the three and nine months ended September 30, 2009, Other Income and (Expense) was $0.4 million income and $(1.0) million expense, respectively. Included in other income for the quarter is $0.2 million in payments received from the Company's investment in the Santa Elena Property in Ecuador. Additionally, the Company had increased cash on hand as a result of its registered direct stock offering which closed on June 30, 2009 which resulted in increased interest income.
Income Tax
For the three and nine months ended September 30, 2009, the Company recognized an income tax benefit of approximately $1.8 million and $4.7 million, respectively, on a net loss before income tax of approximately $10.8 million and $30.5 million, resulting in an effective tax rate for both periods of approximately 16.7% and 15.3%, respectively. The difference between the effective tax rate recognized and the 22.0% statutory rate as promulgated under the Block Z-1 License Contract is largely due to (i) a 100% allowance on the Company's net operating losses generated in the United States and (ii) certain U.S.
