Macro Tsimmis

intelligently hedged investment

BPZ Energy (BZP) update #8

Posted by intelledgement on Tue, 06 May 08

It’s been a busy couple of days for our spec E&P play, BPZ Energy (BZP).

On Monday, they announced the resumption of production in the Corvina field (wells 14XD, 21XD, and the newly drilled and tested 18XD). Production has been shut in since the sinking of the Supe last Janurary, but they expect to get it back up to 6,000 BBLS/day “in the next few days,” according to the press release. Completed testing on 18XD yielded a rate of 5,450 BBLS/day, not including 500 BBLS/day from DST 1—one of three drill stem tests—which has been closed down due to a water leakage issue and which may not be reopened. Initial production is flowing the company’s transport barge, but when that is full, they plan to initiate use of their new floating production, storage, and offloading system (FPSO) to handle the production output—the first use of that technology in Peru.

Today, the company announced that they had commenced drilling for their fifth Corvina well, 20XD. (Three of the first four are producing oil; the fourth, 16X, is natural gas-only.) ”This well allows us to continue developing the oil and gas sands discovered by the 21XD well and subsequently appraised by the 14D and 18XD wells,” stated Manolo Zúñiga, President and Chief Executive Officer. “We will be testing prospective sands in zones not yet reached from any of our current well bores, thus we could increase reserves with successful tests. This well will be highly deviated, drilling in an almost horizontal direction at about 77 degrees, crossing multiple sands and could have a significant increase in total pay as compared to our other wells. More importantly, this well will cross the oil sands the we encountered in the 18XD well in DST #1 that we felt were the best sands in the well, yet we were unable to fully test the sands due to an issue with cementing. This well will be the most challenging well to date, and we are confident our operations team in Peru will continue doing an excellent job conducting both drilling and production operations in a safe and efficient manner from the CX-11 platform.”

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