Friday, April 11, 2014

Peru-Focused BPZ Resources Is On The Verge Of A Turnaround; Has 40%-Plus Upside

This article was originally published by Seeking Alpha on March 25, 2014

By Sarfaraz A. Khan. Research assistant: Gohar Yousuf

·         BPZ Resources has developed only a fraction of its properties.
·         The company has a disappointing track record but is eyeing a turnaround on the back of higher production.
·         The company has already given the first solid evidence of a turnaround, is nearing profitability by Q1-2015.

BPZ Resources (BPZ) is an energy company that is engaged in oil and natural gas exploration and production in Peru, which the company believes, offers excellent opportunity for long term growth.
So far, only a fraction of its properties, just 0.04% of the total gross acreage, has been developed. Therefore, the company has significant room for growth in terms of net proved reserves, production, revenues and income.
Although the company's performance over the past few years has not been satisfactory, it appears on the verge of a turnaround. The markets have realized this and BPZ's shares have been up 65% this year. However, I believe that there is still room for a potential 40% upside for long term investors. For this, we'll have to dig a little deeper.
Indications of a turnaround
First, a little bit about the company. BPZ Resources was formed in 2001 but its predecessor, BPZ & Associates, has more than a decade of experience of working as an energy consultant, particularly in Peru. BPZ Resources currently has 16.1 million barrels of net proved oil reserves, all of which lie in the Corvina and Albacora fields in Peru's Block Z-1.
Although BPZ has attractive growth prospects, its past … read full article at Seeking Alpha