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BPZ Energy Reports Successful Oil and Gas Tests

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ks7777   Wednesday, 03/07/07 10:36:12 AM
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BPZ Energy Reports Successful Oil and Gas Tests on CX11-21XD Well

HOUSTON — March 7, 2007 — BPZ Energy, Inc. (AMEX: BZP) announced today the results of tests conducted on the CX11-21XD well in the Corvina field located offshore northwest Peru. The well tested at a rate of 40 million cubic feet per day (MMcfpd) of natural gas and 3,150 barrels of crude oil per day (bopd).

A total of four Drill Stem Tests (DST) were conducted on separate potential pay zones covering 413 feet from the Lower and Upper Zorritos formations.

DST #4 tested 130 feet of pay in the top portion of the Upper Zorritos at approximately 40 MMcfpd of natural gas with 1,500 psia of well head pressure. The gas is essentially pure methane with no impurities, making it ideal for the proposed 160 MW power plant project, to be located close by in the town of Nueva Esperanza and which will require 40 MMcfpd of feedstock.

In addition, during DST #3, the well produced crude oil from 45 feet of opened pay from the middle portion of the Upper Zorritos at the rate of 3,150 bopd with 1,000 psia of well head pressure and zero water. This sweet crude oil has an approximate API specific gravity of 22. The Company may go back to this zone to test additional unopened intervals that also appear to contain crude oil.

DST #2 opened 138 feet of potential pay in the bottom section of the Upper Zorritos, but yielded inconclusive results due to mechanical problems during the test. The Company is of the opinion that this zone may still contain commercial quantities of hydrocarbons and additional testing may be performed at a later date.

DST #1 tested 100 feet of potential pay in the Lower Zorritos. Although it did produce natural gas, it also produced formation water in quantities large enough to consider the zone non-commercial in this part of the field. The Company remains optimistic that gas is present in commercial quantities in this formerly untested formation as evidenced in logs from three other previously drilled Corvina wells.

The well testing results indicate that the CX11-21XD well bears a striking resemblance to the 8X-2 well drilled by Tenneco in the Albacora oil field and that tested 4,365 bopd and 21 MMcfpd with 893 barrels of condensate per day. The Company plans to redevelop the Albacora field in the near future.

The Company next plans to workover the shut in CX11-16X well that had previously tested 16.6 MMcfpd, followed by the drilling of its second new well in the Corvina field, to prove up additional gas reserves and appraise the oil discovery. The Company expects to obtain independently certified reserves after the workover is completed.

Management Comments

Manolo Zúñiga, President and CEO of BPZ Energy said; “This is a historic event for BPZ Energy. These test results exceeded our expectations for the well in terms of potential daily production of natural gas and crude oil, which on a combined basis approximates 10,200 barrels of oil equivalent per day. The tested natural gas rates help validate the proposed gas-to-power project, while there are nearby ready markets for crude oil in Peru. We will begin securing the equipment necessary to begin oil production at the earliest possible date.” He went on to say; “The successful completion of this initial phase of our first project encourages us to continue pursuing our strategy of diversifying our asset base within the many projects we have in our portfolio.”

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