Area VI, which covers 1,444,175 acres and encompasses the entire Lancones Basin, is an exploratory block with prospective horizons of Cretaceous and Tertiary Age. During the two-year technical evaluation period, BPZ Energy re-evaluated well log information from six wells which were previously drilled on the block, reprocessed approximately 400 kilometers of existing 2-D seismic data, conducted a new geochemical survey and integrated all of this information into a proprietary geological model. As a result, BPZ has identified 11 leads in two main exploratory sections. Following negotiation of work program commitments with Perupetro, BPZ Energy expects the License Contract to be executed in mid-2006.
BPZ Energy has notified Perupetro that it will not apply for a license contract for Area XVI. The technical work conducted by the Company over the past two years has not demonstrated the upside potential and economics to meet the Company's objectives. Area XVI is a relatively small block of 109,612 acres in the Talara Basin.
Albacora Oil Field Redevelopment Project
The Company also announced that it has been working on the redevelopment of the Albacora oil field, located offshore in the northern part of the Z-1 block. The Albacora oil field was discovered in 1972 with the 8-X-2 well which tested more than 5,000 barrels of crude oil and condensate per day. The field currently has 3 shut-in oil wells and was producing over 500 BOPD at the time it was shut-in. This field has a drilling and production platform in place and is only 100 miles away from the Talara Refinery where crude oil production can be sold at international prices. The Company's independent reserve engineers are currently conducting a review of the Albacora oil field which BPZ expects to result in the certification of crude oil reserves. The Company plans to work with an industry or financial partner to finance the initial redevelopment of the field.
With existing license contracts for Block Z-1 (739,520 acres) and Block XIX (473,061 acres), and the pending license contract for Area VI, BPZ is strategically positioned in three distinct and prospective geological regions, namely the Tumbes, Talara, and Lancones basins. This will provide ample opportunities for the Company's future growth. "While we remain diligently focused on developing our Corvina gas-to-power project, we believe these additional opportunities represent significant future growth potential to increase shareholder value," stated Manolo Zuniga, President and Chief Executive Officer of BPZ Energy, Inc.
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