1023734--3/16/2007--BPZ_ENERGY

related topics

{gas, price, oil}

{cost, regulation, environmental}

{interest, director, officer}

{stock, price, share}

{acquisition, growth, future}

{competitive, industry, competition}

{operation, natural, condition}

{personnel, key, retain}

{loan, real, estate}

{regulation, government, change}

{loss, insurance, financial}

Risks Relating to the Oil and Natural Gas Industry, the Power Industry, and Our Business. We have a limited operating history and have only engaged in start-up activities. We own rights to oil and gas properties that have not yet been developed. We require additional financing for the exploration and development of our foreign oil and gas properties and the construction of our proposed power generation facility, pipeline and gas processing facility Our future operating revenue is dependent upon the performance of our properties. Our business involves many uncertainties and operating risks that may prevent us from realizing profits and can cause substantial losses. We plan to conduct offshore exploration, exploitation and production operations off the coast of northwest Peru, all of which are also subject to a variety of operating risks peculiar to the marine environment. Disruption of services provided by our deck barge could temporarily impair our operations. Construction and operation of power generation and gas processing facilities and pipelines involve significant risks that cannot always be covered by insurance or contractual protections. Our success depends on the existence and growth of markets for natural gas and electricity in Peru and Ecuador. The geographic concentration of our properties in northwest Peru and southwest Ecuador subjects us to an increased risk of loss of revenue or curtailment of production from factors affecting that region specifically. Our operations in Peru and Ecuador involve substantial costs and are subject to certain risks because the oil and gas industry in Peru and Ecuador is less developed than in the United States. The unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services could adversely affect our ability to execute our exploration and exploitation plans on a timely basis and within our budget. We are subject to numerous foreign laws and regulations of the oil and natural gas industry that can adversely affect the cost, manner or feasibility of doing business. If we fail to comply with the terms of certain contracts related to our foreign operations, we could lose our rights under each of those contracts. We are subject to complex environmental regulatory and permitting laws and regulations that can adversely affect the cost, manner and feasibility of our planned operations. Compliance with, or breach of, laws relating to the discharge of materials into, and the protection of, the environment can be costly and could limit our operations. Our oil and gas operations involve substantial costs and are subject to various economic risks. Competition for oil and natural gas properties and prospects is intense; some of our competitors have larger financial, technical and personnel resources that give them an advantage in evaluating and obtaining properties and prospects. The loss of senior management or key technical personnel could adversely affect us. Insurance does not cover all risks. A substantial or extended decline in oil and natural gas prices may adversely affect our business, financial condition, cash flow, liquidity or results of operations as well as our ability to meet our capital expenditure obligations and financial commitments to implement our business plan. We may not be able to develop a proven reserve base. Investor profits, if any, may be limited for the near future. Additional infusions of capital may have a dilutive effect on existing shareholders. Shares eligible for future sale by our current shareholders may impair our ability to raise capital through the sale of our stock. We are controlled by our officers, directors and entities affiliated with them. The transfer of NFS could result in liability to us because the shares transferred were not registered with the SEC.

Full 10-K form ▸

1023734--3/16/2007--BPZ_ENERGY_INC