BPZ Energy Signs Memorandum of Understanding for Power Purchase Agreement
Posted on: Monday, 22 August 2005, 06:00 CDT
HOUSTON, Aug. 22 /PRNewswire-FirstCall/ -- BPZ Energy, Inc. (BULLETIN BOARD: BPZI) announced today that it has signed a Memorandum of Understanding for a Power Purchase Agreement (PPA) with Luz del Sur S.A.A., one of the largest power distribution companies in Peru. Under the terms of the proposed PPA, BPZ Energy will supply Luz del Sur with 90 megawatts of power under a 10-year take or pay contract beginning January 2007. The agreement calls for BPZ Energy to deliver power to the existing substation adjacent to the site of its future power plant in the town of Caleta Cruz in northwest Peru. The price for the energy to be sold under the proposed PPA would be tied to Peru's regulated energy prices. The Memorandum of Understanding calls for the PPA to be negotiated within sixty (60) business days after its execution, upon formal approval by both companies.
"Securing this agreement is a major step in executing our integrated gas to power project in Peru," stated Manolo Zuniga, President and Chief Executive Officer of BPZ Energy, Inc. "The PPA will allow us to sell our power tied to regulated prices and should provide a dependable revenue base for payment of operating expenses and debt service obligations under the proposed $70 million IFC financing. We expect the revenues from this contract to generate an attractive rate of return on the project. We are very pleased to be dealing with a company with the financial strength and stability of Luz del Sur."
Mr. Zuniga added, "We will also have the opportunity to sell excess power generated from our future power plant into the merchant market and to Luz del Sur, should they exercise their option to buy an additional 20 MW as proposed under the PPA."
About Luz del Sur
Luz del Sur is one of the largest electric distribution companies in Peru, with a market share of approximately 35%. It is majority owned by affiliates of Sempra Energy of California and PSEG of New Jersey. It provides electricity to more than 720,000 residential and industrial customers in the southern half of the capital city of Lima, Peru.
About BPZ Energy
Houston-based BPZ Energy, Inc. is an oil and gas exploration and production company with properties in northwest Peru and Ecuador. It is executing a gas to power strategy which includes generation of electric power in Peru for its own account and sales of gas into Ecuador for third-party power generation. BPZ has exclusive rights and license agreements for oil and gas exploration and production covering approximately 2.7 million acres in four properties in northwest Peru. It also owns a working interest in a producing property in southwest Ecuador.
This Press Release contains forward-looking statements based on our current expectations about our company, our properties, our estimates of required capital expenditures and our industry. You can identify these forward-looking statements when you see us using words such as "expect,""anticipate,""estimate,""believes,""plans" and other similar expressions. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Such uncertainties include the success of our project financing efforts as well as the successful management of our capital development project and other normal business risks. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. We caution you not to place undue reliance on those statements.
Contact: Manolo Zuniga, CEO Randall D. Keys, CFO BPZ Energy, Inc. 281-556-6200 Lisa Elliott / lelliott@drg-e.com Jack Lascar / jlascar@drg-e.com DRG&E / 713-529-6600
BPZ Energy, Inc.
CONTACT: Manolo Zuniga, CEO, or Randall D. Keys, CFO, both of BPZEnergy, Inc., +1-281-556-6200; Lisa Elliott, lelliott@drg-e.com, or JackLascar, jlascar@drg-e.com, both of DRG&E, +1-713-529-6600
Source: PRNewswire-FirstCall
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