BPZ Resources, Inc. reported that, at the request of the OSINERG, the government agency responsible for auditing the safety of energy investments in Peru, over the past several days the Company successfully performed a series of safety and integrity tests on the facilities at the CX-11 Corvina platform, including the equipment that was being used for the ongoing long-term testing of the 21XD and 14D wells. As part of the integrity testing of the surface equipment, the Company perforated the lower prospective oil sands identified in the recently drilled 18XD well. The Company announced that those lower sands tested oil, thus validating the Company's Corvina geologic model.
The 18XD well was shut in immediately after the short duration integrity test confirmed that the well testing equipment was in operational condition. The four Corvina wells are currently shut-in while the Company awaits final clearance from OSINERG, at which time the Company will begin executing the scheduled 18XD well DSTs, followed by resumption of the long-term oil tests in wells 21XD and 14D.
The Company has submitted all the requested reports and documentation generated during the investigation of the January 30, 2008 sinking of the Peruvian Navy tanker (the "Supe"). A number of organizations involved in the investigation have issued reports concluding there was no environmental damage due to the accident. Additionally, the Company assisted the Peruvian Navy in conducting an underwater survey of the Supe, which established that the vessel does not represent a hazard to navigation nor a marine pollution threat, as all its tanks were found to be empty. The CX-11 Corvina platform and all its facilities, as well as the BPZ-01 tender barge, the four Corvina wells, and all the vessels supporting the operations have now been certified to be in operational condition.
Prior to the accident the Company was producing approximately 4,200 barrels of oil per day from the 21XD and 14D wells as part of its long-term testing program. Approximately 90,000 barrels of oil that have been produced during this long-term testing campaign were sold to the Talara refinery. The field data acquired during this long-term testing campaign, including last week's 18XD test, have been delivered to the Company's independent reserve engineers so they may complete their Corvina oil and gas reserves reports.
The Company regrets to inform of a second fatality from the accident involving the Navy tanker. Three other sailors that remain in critical conditions have been transferred to Bogota, Colombia, to receive specialized treatment. The Company has provided the Peruvian Navy with assistance to support this effort.
Manolo Zuniga, President and Chief Executive Officer, commented "Our thoughts and prayers continue to be with the families of the sailors involved in the accident. Our operations team and contractors at the platform have successfully completed the testing of the equipment at the CX-11 platform. During those equipment integrity tests, oil was tested in the lower sands of the 18XD well. Given the limited duration of the test, potential flow rates for those lower sands were not reached, yet does tell us that our geological models are proving accurate. This information was passed on to our reserve auditors. We have notified OSINERG of our operational readiness, provided all the requested documentation, and await clearance so we may resume operations. Initially we will further test the 18XD well, and then resume production under the long-term testing program, to obtain additional reservoir information needed to finalize our Corvina development plan that needs to be submitted to PeruPetro."
Frederic Briens, Chief Operating Officer, stated "We put our systems through very rigorous tests and completed integrity tests on all our equipment and that of our contractors at the platform. We also added equipment based on our thorough review of our operations to ensure maximum safety and protection. We have notified the proper agency of our readiness, as we have fully complied with all the mandates set forth to date. The Company's operations are safe, and our technical team is ready to resume normal day to day activity."
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