BPZ Inks Mandate Letter for $200MM Senior Debt

BPZ Resources, Inc. 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."


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