BPZ Energy signs Peru drilling contract

BPZ Energy, an E&P company with primary operations in Peru and Ecuador, announced the signing of a 24-month drilling contract with Saipem SpA subsidiary Petrex S.A.

Offshore staff

(Peru)-BPZ Energy, an E&P company with primary operations in Peru and Ecuador, announced the signing of a 24-month drilling contract with Saipem SpA subsidiary Petrex S.A.

The drilling activities will be centered in the Corvina gas field, located in the offshore Block Z-1 in northwest Peru. BPZ has 100% ownership of the field.

Under the terms of the $5.5 million contract, Petrex S.A. will upgrade and mobilize a platform rig capable of drilling to 16,000 ft. In addition, the contract provides for the initial drilling of three wells plus the workover of the existing C-16X well in Block Z-1, followed by the drilling of three optional wells.

Once the new wells are drilled, BPZ plans to utilize the rig to drill the Albacora oil field, located in the northern part of Block Z-1, with an initial drilling program consisting of six wells. BPZ has also secured a long-term lease for a tender assist barge, which is required for the rig.

Developments in the Corvina gas field mark a significant step forward in BPZ's plans for gas production and transportation in the region. In addition to the workover of the C-16X discovery well, BPZ is refurbishing the existingCX-11 platform.

Once this refurbishment is complete in March 2006, a total of six new wells will be drilled from theCX-11, which will target proved undeveloped and probable reserves, as well as deeper untested sands.

Manolo Zuniga, president and CEO of BPZ Energy said of the planned developments in the Corvina field: "Although we have much work ahead of us, as we move into the first half of 2006, we expect to see accelerating progress in the execution of the Corvina project, with drilling operations scheduled to be underway by June 2006."

Drilling and successfully completing the proposed wells in the Corvina field will provide BPZ with the necessary gas deliverability and proved reserves to execute their planned gas-to-power project in Peru, as well as providing a supply source for a planned gas pipeline to Ecuador.

01/03/2006

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