No warrants or dilutive securities will be issued to the investors in connection with the private placement. The shares are being placed directly by the Company and there are no placement fees. However, the Company has retained Morgan Keegan & Company, Inc., as its financial advisor. This transaction is contingent upon approval and subsequent execution of the closing documents in their final form as well as approval of the additional listing of shares by the American Stock Exchange.
As previously announced, a final production test after completion of the Company's Corvina CX11-21XD well yielded 5,900 barrels of crude oil per day (bopd) with 920 psia of wellhead pressure and the well has been temporarily completed as an oil producing well. The proceeds from this offering will be used primarily in an effort to fast-track the Corvina oil development and otherwise will be used consistent with our operating plan as described in our public filings.
Manolo Zuniga, President and Chief Executive Officer of BPZ Energy, Inc., said, "We are very pleased with the results of this private placement as it should allow us to accelerate the development of Corvina's crude oil discovery which complements our gas-to-power and gas-exports strategy. Further, we are grateful for the trust and continued confidence of these investors, most of whom have also participated in prior Company offerings."
The private placement shares will be issued under Regulation D of the Securities Act of 1933, as amended. The shares issued will be restricted shares and will not be eligible for trading until registered with the SEC. The Company will commit to file a registration statement covering the shares no later than 30 days after the closing, and will use its reasonable best efforts to obtain its effectiveness no later than 150 days after closing. The Company currently has 54,497,869 common shares outstanding, with fully diluted shares of 68,154,869. The fully diluted shares include the potential effect of warrants, vested and unvested options, and restricted stock outstanding as well as the final 9,000,000 contingent earn-out shares issuable to the former shareholders of BPZ-Texas at such time as the Company is entitled to receive as its proportionate share from gross production from any oil and gas wells owned or operated by the Company, prior to December 28, 2007, not less than 2,000 barrels of oil per day or its equivalent (approximately 12 million cubic feet of gas per day).
Houston-based BPZ Energy, Inc. is an oil and gas exploration and production company that has exclusive rights and license agreements for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru. It also owns a working interest in a producing property in southwest Ecuador. The Company is currently executing an integrated gas-to-power strategy, which includes generation and sale of electric power in Peru and sales of gas into Ecuador for third-party power generation, in parallel with the development of the Corvina oil and the redevelopment of the Albacora oil field.
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