BPZ Resources, Inc. has performed three drill stem tests (DST) in ongoing testing of the CX11-18XD well in the Corvina field of offshore Block Z1 in northwest Peru, reaching up to date a cumulative total of 5,350 barrels of oil per day (bopd). Testing is not yet complete.

The Company carried out three drill stem tests (DST) in the Upper Zorritos formation. The first DST targeted the lower sands that flowed oil to the surface during the integrity tests at the platform as previously announced.

In addition, both the first and second DSTs targeted a set of sands that had not been tested in any of the previous wells tested. The third DST targeted a set of sands that has tested oil in the Company's CX11-21XD well.

DST #3 initially tested 700 bopd and displayed production restrictions due to the heavier mud required during drilling. The test was suspended after a short period to allow the Company to mobilize specialized equipment to the platform and to re-perforate the sands with deep penetration tubing-conveyed perforating (TCP) guns in an attempt to increase productivity. DST #3 is ongoing. DST #2 tested 4,150 bopd despite the heavier mud required during drilling. The Company expects to increase productivity of these sands that were tested in DST #2 by re-perforating them using the TCP guns prior to the final completion of the well. DST #1 initially flowed at approximately 500 bopd with no formation water, before water came in through what the Company concluded was faulty cement isolation. This first DST was then aborted and the Company is reviewing its options to fix the cement problem so the test may be performed again in the future.

The Company also believes the sands in DST #1, which the Company believes are the ones with the best petrophysical properties in the 18XD well, have also been subjected to production restrictions due to the heavier mud required during drilling. TCP guns are expected to be used if DST #1 is repeated. The Company does not expect this mechanical problem to have any significant long term effect on production from this well.

Manolo Zuniga, President and Chief Executive Officer commented, "Once again we have come up with another promising well in Corvina. We look forward to completing the ongoing 18XD testing to assess the full potential of this well. The 18XD does have some near-wellbore production restrictions resulting from the mud weight used to control the well during drilling. However, we expect this damage to be manageable. After re-perforating the DST #3 sands, we also plan to re-perforate the DST #2 sands since our analysis shows the production from this zone is currently impaired, even though DST #2 already tested 4,150 bopd. The Company will decide at a later date if it is worthwhile to re-test DST #1. Once we complete the well, we will announce final testing results. This latest well will add capacity to meet our 2008 production target and is an integral part of the overall Corvina field development."

After final completion and testing of the CX11-18XD well, the Company plans to spud the CX11-20XD well which is planned for later in April. At approximately the same time, the Company also expects to resume production under its long term testing program, using the recently installed sea bed flow lines. The Company estimates production will be approximately 6,000 bopd. The long term testing to obtain additional reservoir and well performance data is needed for field development as well as to resume cash flow.

Tags: BPZ Resources