BPZ Energy Secures Commitments for Senior Debt Credit Facility

BPZ Resources announced that its subsidiary, BPZ Exploracion & Produccion S.R.L., has secured commitments for a $70 million reserve based credit facility. The syndication of this Facility is led by Natixis, a major French bank. The other institutions participating in the syndicate include the International Finance Corporation (IFC), Scotiabank and Banco de Crédito del Perú.

The Facility will provide the Company's subsidiary, BPZ Exploracion & Produccion, S.R.L., with a revolving line of credit for capital expenditures and working capital and will be secured by a pledge of the ownership units of the borrower. The Facility will be utilized as needed to meet the Company's 2009 capital expenditure budget for oil development at the Corvina and Albacora fields, both of which are located in offshore Block Z-1in Northwest Peru. The Facility is a senior secured revolving credit facility maturing four years from the date of closing, and bears interest at LIBOR plus 7.0%. A commitment fee of 3.50% will be paid on the unutilized portion of the borrowing base. The $70 million Facility includes the $15 million previously received under the IFC Senior Note. The initial borrowing capacity available under the Facility is expected to be approximately $50 million, inclusive of the already funded $15 million under the IFC Senior Note. The Facility is subject to a semi-annual borrowing base determination based on the value of oil reserves from the Corvina field and may, in the future, include reserves booked from the Albacora field.

Closing of the credit facility is dependent upon the successful negotiation of the related loan documents, and funding is predicated on the satisfaction of certain customary conditions precedent as will be specified in the loan documents. Both the Commercial Banks and IFC facilities will be governed by a single Common Terms Agreement ensuring the efficient administration of the Facility. Closing of this financing is expected during the third quarter of this year. However, the Company cannot provide assurance that the financing will close when anticipated, if at all.

Ed Caminos, Chief Financial Officer commented, "We are very pleased to announce that we have secured total firm credit commitments of $70 million. In this environment of tight credit availability, we believe today's announcement indicates confidence in BPZ's underlying asset base and core business strategy from our banking group. We plan to continue to balance our 2009 capital expenditures with free cash flow, funds available from our recent registered offering and to the extent necessary by drawing on the credit availability."