BPZ Wins World Bank Approval for $120M Financing

BPZ Energy, Inc. said that the International Finance Corporation's (IFC) Board of Executive Directors approved the Company's $120 million financial package. IFC is the private sector arm of the World Bank Group based in Washington, D.C.

As part of the financing the Company and IFC executed a Subscription Agreement for the private placement of 6,500,000 shares of common stock at a price of $3.00 per share for net proceeds of $19,500,000. No warrants or dilutive securities were issued in connection with the offering. The offering was placed directly by the Company and there were no placement fees. As a result of this transaction, IFC becomes one of the Company's largest investors.

The remaining $100.5 million portion of IFC financing consists of $30.5 million of debt facilities for IFC's own account and $70 million of debt facilities for the account of third-party financial institutions. Syndication of the third-party debt component is expected to take place during the first quarter of 2007. The remaining debt portion of the financing is subject to identification of the lending syndicate members and subsequent negotiation and approval of the necessary loan documentation.

The financing is expected to allow the Company to complete its gas-to-power project in the Corvina Gas Field in Block Z-1, which is located offshore northwest Peru.

Manolo Zuniga, President and Chief Executive Officer, stated: "We are extremely happy to have IFC as one of our lead investors. They are an excellent financial partner for our current project and they also provide an experienced and diversified team of experts that will support our ongoing efforts."

Investors are cautioned that until negotiation and execution of the necessary documentation related to the debt portion of the financing are completed, the Company does not have a binding commitment from IFC and there can be no assurance the Company will receive such debt financing from IFC.

With respect to operations, the Company is continuing to load the testing equipment on the Corvina platform and to connect the various components. The offshore location and limited dimensions of the platform have resulted in a longer setup for testing than originally projected. The well testing plan currently contemplates 4 separate Drill Stem Tests and a total of 300 feet of perforations. The prospective gas sands to be tested have been selected after a lengthy analysis so as to allow the possible validation of approximately 900 feet of gas pay, as defined by two petrophysical interpretations of the electric and magnetic resonance logs taken in the well, assuming all four tests are successful. We can give no assurance, however, that testing will in fact confirm these interpretations.

The IFC is the private sector arm of the World Bank Group based in Washington, D.C. It provides loans, equity, structured finance and risk management products, and advisory and technical assistance services to build the private sector in developing countries. Their mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.

Houston-based BPZ Energy, Inc. is an oil and gas exploration and production company with properties in northwest Peru and southwest Ecuador. It is executing an integrated gas-to-power strategy, which includes generation and sale of electric power in Peru and sales of gas into Ecuador for third-party power generation. BPZ has exclusive rights and license agreements for oil and gas exploration and production covering approximately 2.4 million acres in four properties in northwest Peru. It also owns a working interest in a producing property in southwest Ecuador.

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