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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (76170)	12/11/2006 8:10:09 AM
From: Ed Ajootian	Read Replies (1) \| Respond to of 206209

BPZ Energy (BPZI) -- Below is a followup post I made on IV, in response to some questions posed there. Montchalin, thanks for the roundup of political info on Peru. I forgot to mention that but its obviously a critical investment factor with international E&P stocks, especially in Latin America. My take is that net-net Peru has stood apart from the leftist leanings of its neighbors over there, and appears likely to remain so. As stated in BPZ's letter to shareholders in their '05 annual report, Peru's country credit rating was raised to BB+, the next level below investment grade, in September. Given that they are so close to becoming considered investment grade for debt, it would seem unlikely that they would through that all away and go the way of Venezuela, Ecuador and Bolivia. Monty, they will use the gas to generate electricity. In Peru right now about 75% of the electricity is generated from hydropower, with almost all of the balance being from diesel fuel. The electricity demand in Peru is increasing, per year, by more than the initial planned capacity of BPZ's electricity plant. The costs of using diesel fuel to generate electricity obviously far exceed what the costs of using gas would be for BPZ, so they have in effect a guaranteed market for their gas. This situation is what is giving the IFC the kind of warm fuzzy feeling that would be required for them to commit to a $120M financing package for this company. I need to correct something in my earlier post, it appears that Morgan Keegan decided not to wait for BPZ to get on the Amex before initiating coverage; they initiated coverage on BPZ on Friday with an Outperform rating. That was the reason for the massive volume on Friday. There is still a large overhang of cheap stock that has been issued in previous financings, so that is why the stock price did not move that much on all that volume. I expect that that overhang should be largely chewed off, at the latest, by the time the latter of the following has occurred: IFC financing approval and Amex listing.