BPZ in Talks with Shell About Peru Venture

Shares of BPZ Resources Inc. soared after the oil and gas exploration and production company said it is in talks with a unit of Royal Dutch Shell PLC about jointly developing Peru properties.

The companies agreed to negotiate terms of a so-called farmout agreement whereby Shell may earn a stake in three northwestern Peru properties that are believed to hold significant crude oil and natural gas reserves.

The memorandum envisions a joint venture in which Shell pays BPZ, collects seismic data on the parts of the properties, or blocks, and drills wells. A spokesman for BPZ said some of the properties are off Peru’s coast.