Industry News - E&P Hotline - BPZ Energy certifies 284 Bcf of 3P gas reserves in Corvina Field BPZ Energy certifies 284 Bcf of 3P gas reserves in Corvina Field
by: OilOnline
Thursday, May 15, 2008
BPZ Resources, Inc. announced the gas reserves certification from independent reserve engineers Netherland Sewell and Associates, Inc. (NSAI) from the Company's Corvina field in offshore Block Z-1 in northwest Peru. NSAI's reserves report certified Proved, Probable, and Possible gas reserves (commonly known as 3P reserves) as of February 29, 2008 based on the definitions and guidelines set forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum Engineers (SPE). The combined total of 3P reserves in Corvina approximates 284 billion cubic feet of gas (Bcf), or approximately 50 million barrels of oil equivalent (Mmboe).
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Gas-in-Place
(Bcf)
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Recovery Factor
(%)
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Reserves
(Bcf)
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| Proved (1P) |
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156.7 |
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66.7% |
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104.5 |
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| Proved + Probable (2P) |
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327.8 |
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68.4% |
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224.1 |
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| Proved + Probable + Possible (3P) |
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328.1 |
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86.4% |
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283.6 |
The Corvina gas-in-place estimates were based on data gathered from the four wells drilled to date from the CX11 platform. Particular attention was paid to the three wells that tested gas down to 6,300 feet, forming a gas pool covering an area of approximately 2,000 acres. Gas-in-place in this area around the CX11 platform is estimated by NSAI at 328 Bcf, which is in line with the Company's previously disclosed estimate of 351Bcf.
As in the case of the previously certified Corvina oil reserves, the Proved gas reserves were based on the gas-in-place delineated by the first three gas wells, while the Probable reserves take into account the gas expected to be encountered up dip, and the Possible reserves are derived from an assumed higher recovery factor than in the Proved or Probable cases.
The Company has 82 million shares outstanding on a fully diluted basis, making the NPV of 3P reserves approximately $2.03 per share. The NPV was calculated using a referential price of $2.10 per million cubic feet.
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Reserves
(Bcf)
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PV-10
(million US$)
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| Proved (1P) |
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104.5 |
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$90.8 |
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| Proved + Probable (2P) |
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224.1 |
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$150.2 |
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| Proved + Probable + Possible (3P) |
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283.6 |
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$166.1 |
| Note: PV-10 is a non-GAAP financial measure because it excludes income tax effects. Management believes that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and gas companies. PV-10 is not a measure of financial or operating performance under GAAP. The most directly comparable GAAP financial measure is the standardized measure of discounted future net cash flows. PV-10 should not be considered as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP, which is calculated at year end under accounting rules by applying year end prices to only proved reserves |
Manolo Zúñiga, President and Chief Executive Officer, stated, "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 certification of 328 Bcf of gas-in-place down to 6,300 feet compares very well with our internal estimate of 351 Bcf, which shows that our Corvina geologic model is once again proving accurate. We will need an additional well to test the potential gas below 6,300 feet to complete delineating the gas-in-place in Corvina.
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