BPZ Energy (BZP) -- Could Be Biggest E&P Story of 2007; A Cure For The "Shoulder Season Blues"
Even though this stock is trading close to its all-time high, I have never been more bullish on it than I am right now. In recent months a huge short position had been built in the stock, about 4.5 M shares or ~10% of the float, and just yesterday we learned that it had only gone down by about 400K shares in the month ended 9/15. This means, contrary to what many had probably been figuring, that the huge rally in the stock price that ensued over that month was barely helped by short covering -- instead, it was just good ol' fashioned bidding up the price by longs.
Now that the stock has formed a solid base at the $7.50 mark it is solidly poised to begin its next leg up, on the next round of positive news and hype. Speaking of which, see the latest list of potential upcoming price catalysts that I have made over on the IV BPZ board (the first of which just happened):
Upcoming Potential Price Catalysts -- Updated 9-15-07
9/21/07
__________
Short interest in BPZ stock as of 9/15 gets announced. I may be off by a day or 2 on this, but I'm pretty sure it will be at or around this date. The big question that will be answered on this date is, to what degree did the rally in the stock price in the first 2 weeks of the month get helped by short covering? One would think that the market is, from a conservative standpoint, figuring that there was significant short covering then, but if the data proves out differently, it could give the stock price another kick in the pants.
Sometime between, say, 9/24 -- 9/27
_____________________________
They should announce the test results of the next series of DST's of the 14D well. These might include an additional oil test. Manolo (and Subash) believes that the gas flows could match or even exceed the flows of the 21XD well. If in fact short interest in the stock is still high, this news will have particularly bullish significance.
Late September or early October
_________________________________________________
BPZ announces the closing of "tranche C" of the IFC-led syndication of debt financing, in the form of a small convertible debt issuance just to IFC (vs. to the syndicate). The funds for "tranche C" will be earmarked for keeping BPZ's rig turning to the right.
Sometime During September
________________________
I predict that BPZ will get at least 1 and maybe several new analysts to initiate coverage of the company. This is primarily based on the Dahlman Rose initiation that recently came out -- it is a sign that the story is so compelling that it has the ability to overcome the natural inclination of US E&P analysts to avoid coverage of international E&P companies. I believe one of the firms that will be "re-initiating" coverage of BPZ during this period will be Morgan Keegan. They were the first firm to cover BPZ, back when Subash was employed there, but when Subash went over to Jefferies they had to drop coverage of all E&P companies since he had been their only E&P analyst. Now MK has brought on another E&P analyst, so he will likely re-initiate coverage of BPZ.
October 1
____________
BPZ presents at the IPAA West OGIS convention and will likely webcast it. This will represent the first major industry hype show that BPZ will be presenting at, after having announced an oil discovery in their 14D well, including all production test results. Also it will be just a few weeks before they will be announcing the amounts of oil reserves discovered by the 21XD and 14D wells. Needless to say, the timing of this event could not be any better.
Mid October
______________________________________
The company will announce the results of the oil reserve calculation being done by its petroleum engineers. This report was intially expected to come out by the end of this month but the oil discovery in the 14D well has changed that timing.
Late October
____________
The company will announce the results of the gas reserve calculation being done by its petroleum engineers. This report was intially expected to come out by the end of this month but the oil discovery in the 14D well has changed that timing.
Within a Week of the Previous Event Having Occurred
_____________________________________________________________________
BPZ announces that its current letter of intent with Luz Del Sur, for a "take or pay" contract for 50-70% of the electric generating capacity of BPZ's proposed power plant at Caleta Cruz, has now resulted in the parties having entered into a definitive, binding agreement.
Within a Month of the Previous Event Having Occurred
____________________________________________________
BPZ closes on the pure debt portion of the IFC debt facility.
|
