Off the Table: BPZ and Shell Nix Plans for Peruvian Farm-Out
BPZ and Shell Exploration Company (West) B.V. have mutually agreed to discontinue discussions on the Farm-out Agreement as conceptualized in the previously announced non-binding Memorandum of Understanding (MOU). BPZ Energy will maintain its 100% working interest in Blocks Z-1, XIX, and XXIII, as well as Block XXII which was not part of the proposed transaction, all of which are located in northwest Peru.
BPZ Energy President and Chief Executive Officer Manolo Zuniga commented, "Although both parties worked diligently during the past few months to reach an agreement that was mutually beneficial and acceptable, both sides determined that the complexities involved in completing the transaction within the guidelines defined by the MOU were far greater than anticipated. Accordingly, a joint decision was made to discontinue the negotiations."
Zuniga continued, "A joint venture under the current environment, driven by reduced and volatile commodity prices, could place an unwarranted financial burden on BPZ and its shareholders. Our plans are to remain focused on developing the oil reserves in Block Z-1, where the Company has been very successful in its ongoing appraisal and development efforts. As such, the Company will continue appraising Corvina while preparing to drill in Albacora, which in turn should allow us to continue ramping up oil production and proving up reserves. We also plan to continue developing our gas-to-power project, which anchors our gas monetizing strategy, and will continue evaluating other gas marketing opportunities."
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