Macro Tsimmis

intelligently hedged investment

BPZ Energy (BPZ) update #9

Posted by intelledgement on Thu, 15 May 08

BPZ Energy (BPZ) announced the results of an independent audit of the company’s natural gas reserves today: 104.5B cubic feet (bcf) of proven reserves; 283.6 bcf of proven + probable + possible.

This estimate covers just the Block Z-1 Corvina offshore field, which is up to now the only place the company has drilled (three wells so far, all of which three are producing oil and gas, a rework of a fourth well that only produces natural gas and is currently shut in as there is only limited market for it, plus they are working on a fifth). Manolo Zúñiga, President and Chief Executive Officer, commented, “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 estimate is as of 29 Feb 08. The auditors are the same guys who prepared the oil estimate—Netherland Sewell and Associates, Inc. The NG is valued at only $2.10/MMCF—if it were in the USA, it would be more like $10 or $12—because the market for it is limited, but once the gas-powered electricity generation plant is constructed, there will be a reliable market for the natural gas, there will be a more reliable power supply for Peru and Ecuador, and BPZ Energy will reliably make money coming and going.

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