Agreement enables flexiblity for oil production
BPZ Resources, an independent oil and gas exploration and production company, has obtained an extension of the previously announced contract for the purchase of three gas-fired turbines for the company’s proposed gas-to-power facility in northwest Peru.
The extension allows the company to defer payment obligations on the turbines until November 16, 2009 provided that it makes one additional payment of $3.4 million by February 25, 2009.
The company has the option to re-initiate the contract at any time prior to November 15, 2009. Once restored, all prior payments will be applied to the contract which may be amended to include new delivery dates, pricing and payment schedules.
According to the company, the extension was sought to allow the company flexibility to devote a majority of capital expenditures for 2009 to developing the oil assets in the offshore Z-1 Block.
It believes the reallocation of capital expenditure will allow it to increase production, cash flow and reserves from the Corvina and Albacora fields. The company plans to move forward with the gas-to-power project once the appropriate financing is in place and/or when a strategic partner for the project is identified.
Houston based BPZ Energy is an oil and gas exploration and production company which has license contracts for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru.