BPZ Resources has received funding of the $15 million tranche of senior debt with the International Finance Corporation.
The IFC $15 million facility is the first tranche of two credit facilities totaling $215 million. As previously announced, Natixis, a French bank, has received credit committee approval to lead the second tranche of the senior debt consisting of a $200 million credit facility. Both the IFC facility and the Natixis facility will be backed by the Corvina oil field reserves, and will be governed by a Common Terms Agreement ensuring efficient credit administration.
Manolo Zuniga, BPZ Energy's President and Chief Executive Officer commented, "In light of the challenges that companies are facing in today's credit markets, the closing and funding of this first tranche of senior debt financing is a testament to IFC’s commitment to BPZ's business plan, as well as their confidence in Peru in general and its institutions in particular. We are proud of the relationship we have built with IFC, and appreciate that they have expressed their continued support as BPZ executes its strategy step-by-step.
"Following this philosophy, in 2009 we will carry out our drilling campaigns in Corvina, Albacora, and the Pampa La Gallina prospect as well as any other activity required to maintain compliance with our four license contracts commitments using cash flow from operations."
Zuniga continued, "Discussions with Natixis are proceeding and should be enhanced by the results of the 20XD well and the expected increase in oil-in-place estimates and reserves. We anticipate closing the second tranche of the senior debt facility and receiving initial disbursements before the end of this year. In parallel, we continue to work with IFC on the additional project financing for our proposed gas-to-power project, and which in this case will be backed by the Corvina gas reserves.
"While our 2009 cash flow will allow us to carry out our planned drilling campaigns, the credit facilities from IFC and Natixis will give us the flexibility to expedite our exploration and production efforts, by allowing us to purchase essential hard assets such as platforms and oil transportations barges, as well as develop our gas-to-power project. Similarly, long-lead projects such as appraising our large Mancora gas play should be accelerated by concluding the negotiations to bring on a joint venture partner," concluded Zuniga.
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