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

To: CommanderCricket who wrote (116333)	1/7/2009 4:00:50 PM
From: tom pope	Respond to of 206191

I wasn't a buyer of much today but I did fill out a BPZ position

To: CommanderCricket who wrote (116333)	1/7/2009 5:13:15 PM
From: Ed Ajootian	3 Recommendations Read Replies (2) \| Respond to of 206191

CC, BPZ Energy (BPZ) -- I don't have the Cannacord report but I just uploaded to finance.groups.yahoo.com two recent reports that came out after the PR announcing proved reserves, from Ray James and Morgan Keegan. Most interesting kernel from these reports is the following paragraph from the MK report: "From an NAV perspective, with no PV-10 values reported in the release, it's a bit more difficult to accurately value the company's reserves at lower oil prices. However, given what has become a fairly low-cost operation, we can still derive an in-ground-value of at least $20/bbl for BPZ's proven reserves (assumes roughly $40 oil), generating an NAV of about $5.50. At $60 oil, our current long-term forecast, we derive an in-ground value closer to $30 and that supports an NAV of about $8.50. If we choose to assign value to the power plant project, which is admittedly at least 18 months away from revenue generation, we think we can assign another $2 to $4 (conservatively). Thus, all-in, we think the shares have significant upside from current levels, excluding drill bit upside in 2009 and beyond." His PV10 values per barrel, given the stated spot price, sounded a bit high to me at first, but on further reflection I recall that in the Feb. '08 report they had a PV10 value of something like $55/bbl. with a reference spot price of around $90. These are offshore wells which deplete very fast, and BPZ has very low production costs per barrel (expected to be something like $7/bbl. normalized). The key point to keep in mind is that the "NAV" that MK is talking about above gives no credit for the probable & possible reserves at Corvina, nor at Albacora. BPZ thinks Albacora could end up to be a lot bigger than Corvina. I'm actually hoping that oil prices get hit some more over these next 2 days, which should bring down BPZ's stock price some more, so I can buy more of the stock. At this point I don't think BPZ would announce the loan closing until Monday at the earliest, to let this macroeconomic carnage play itself out a little longer.