Peru Oil Producer BPZ Files Bankruptcy After Missing PaymentBill Rochelle
BPZ Resources Inc., an oil and gas exploration and production company, filed for bankruptcy protection Monday, citing the plunge in oil prices, as the 10-day grace period on a missed payment to noteholders was about to end.
BPZ has licenses to operate on 2.2 million acres in northwest Peru and in coastal waters off its shores. The Houston-based company listed assets of $364.3 million against debt totaling $275.2 million in its Chapter 11 filing in Victoria, Texas.
Liabilities include $59.9 million on 6.5 percent convertible notes that were due March 1 and $168.7 million in 8.5 percent convertible notes due 2017. The notes aren’t guaranteed by the operating companies, which aren’t in bankruptcy.
BPZ said it was in talks with an ad hoc group of holders of convertible notes. The company said there’s no agreement so far either on a restructuring or financing for bankruptcy.
“Our efforts to negotiate additional financing to fund business activities and pursue identified strategic alternatives were further impeded when oil prices plummeted and production growth faltered,” Chief Executive Officer Manolo Zuniga said in a statement Monday.
The 6.5 percent notes last traded on March 3 for 11 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The 8.5 percent notes fetched 19 cents on March 4.
The stock began a steep decline in June, as oil prices started to fall, and bottomed out at about 20 cents in December. The shares dropped 20 percent to 6 cents Monday in over-the-counter trading.
For the nine months ended in September, revenue of $65.6 million resulted in a $33.6 million operating loss and a $51.4 million net loss.
The case is In re BPZ Resources Inc., 15-60016, U.S. Bankruptcy Court, Southern District Texas (Victoria).