HOUSTON--(BUSINESS WIRE)--BPZ Resources, Inc. (AMEX:BZP) announced today the gas reserves certification from independent reserve engineers Netherland Sewell and Associates, Inc. (NSAI) from the Company’s Corvina field in offshore Block Z-1 in northwest Peru. NSAI’s reserves report certified Proved, Probable, and Possible gas reserves (commonly known as 3P reserves) as of February 29, 2008 based on the definitions and guidelines set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers (SPE). The combined total of 3P reserves in Corvina approximates 284 billion cubic feet of gas (Bcf), or approximately 50 million barrels of oil equivalent (Mmboe).
|Proved + Probable (2P)||327.8||68.4%||224.1|
|Proved + Probable + Possible (3P)||328.1||86.4%||283.6|
The Corvina gas-in-place estimates were based on data gathered from the four wells drilled to date from the CX11 platform. Particular attention was paid to the three wells that tested gas down to 6,300 feet, forming a gas pool covering an area of approximately 2,000 acres. Gas-in-place in this area around the CX11 platform is estimated by NSAI at 328 Bcf, which is in line with the Company’s previously disclosed estimate of 351Bcf.
As in the case of the previously certified Corvina oil reserves, the Proved gas reserves were based on the gas-in-place delineated by the first three gas wells, while the Probable reserves take into account the gas expected to be encountered up dip, and the Possible reserves are derived from an assumed higher recovery factor than in the Proved or Probable cases.
The Company has 82 million shares outstanding on a fully diluted basis, making the NPV of 3P reserves approximately $2.03 per share. The NPV was calculated using a referential price of $2.10 per million cubic feet.
|Proved + Probable (2P)||224.1||$150.2|
|Proved + Probable + Possible (3P)||283.6||$166.1|
|Note: PV-10 is a non-GAAP financial measure because it excludes income tax effects. Management believes that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and gas companies. PV-10 is not a measure of financial or operating performance under GAAP. The most directly comparable GAAP financial measure is the standardized measure of discounted future net cash flows. PV-10 should not be considered as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP, which is calculated at year end under accounting rules by applying year end prices to only proved reserves|
Manolo Zúñiga, President and Chief Executive Officer, stated, “This certification, coupled with the 60 million barrels of 3P oil previously certified, now brings the total certified reserves in Corvina to approximately 110 million barrels of oil equivalent. Considering that the Corvina oil and gas pools cover a total approximate area of 3,500 acres out of Corvina’s approximate 40,000 acres, and this is the first project of a portfolio of 50 mapped prospects within our 2.4 million acres, we are excited about the next steps the Company will be taking in the future. This certification now gives us the needed information to begin the final negotiations with the International Finance Corporation (IFC) on the gas-to-power project. The certification of 328 Bcf of gas-in-place down to 6,300 feet compares very well with our internal estimate of 351 Bcf, which shows that our Corvina geologic model is once again proving accurate. We will need an additional well to test the potential gas below 6,300 feet to complete delineating the gas-in-place in Corvina.
About BPZ Energy
Houston based BPZ Energy is an oil and gas exploration and production company which has exclusive license contracts for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru. It also owns a minority working interest in a producing property in southwest Ecuador. The Company is currently executing the development of the Corvina oil discovery, the redevelopment of the Albacora oil field, and the exploration of Block XIX, in parallel with, the execution of an integrated gas-to-power strategy, which includes generation and sale of electric power in Peru and the development of a regional gas marketing strategy. The Company’s website at www.bpzenergy.com provides additional information about the Company’s plans, including photographs and other information with respect to its operations.
This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on our current expectations about our company, our properties, our estimates of required capital expenditures and our industry. You can identify these forward-looking statements when you see us using words such as "expect," “will”, "anticipate," “indicate,” "estimate," "believes," "plans" and other similar expressions. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Such uncertainties include the success of our project financing efforts, including final documentation and execution of debt financing documents with IFC, accuracy of well test results, and reserves reports, well refurbishment efforts, successful production of indicated reserves, and the successful management of our capital development project, and other normal business risks. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. We caution you not to place undue reliance on those statements.
The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only “Proved” reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The Company is prohibited from disclosing other categories of reserves in its SEC filings. We use certain terms in this press release such as “Indicated” "Probable” or “Possible” oil and gas reserves, as well as similar terms such as “barrels of oil per day” and “oil sands” suggesting such reserves, which the SEC’s guidelines strictly prohibit us from including in filings with the SEC. The reserve quantities reflected above were certified by Netherland Sewell and Associates, Inc. using the 1997 definitions and standards of the Society of Petroleum Engineers and World Petroleum Congresses which we are prohibited from disclosing in any of our SEC filings. These definitions and standards may result in estimates of proved reserves which are materially different from those disclosed in the Company’s filings with the SEC. U.S. investors are urged to consider closely the disclosure in our SEC filings, available from us at 580 Westlake Park Blvd., Suite 525 Houston, Texas 77079; Telephone: (281) 556-6200. You can also obtain these filings from the SEC by calling 1-800-SEC-0330.