BPZ Resources received a decision from the Hydrocarbons General Bureau, the division of the Ministry of Energy and Mines in charge of hydrocarbons activities in Peru, regarding its previously submitted application for Extended Well Testing on the Company's first five oil wells in the Corvina field in offshore northwest Peru. In its decision, the DGH approved the Company's application to continue EWT until the first date of commercial production, currently set for May 31, 2010, subject to specific limits on the amount of natural gas flared from each of the first five Corvina wells.

Based on the natural gas flaring limits set by the DGH in its decision, the Company expects it will have to limit its oil production from the first five Corvina oil wells in order to comply with the established gas flaring limits. The actual future decrease in production from these five Corvina wells will not be known until the Company fully implements its gas flaring mitigation strategy to optimize oil production while complying with the gas flaring limits, but the Company estimates production from these wells could decrease by as much as 400 to 800 bopd.

We expect the newly completed 19D and 17D in Corvina, the A-14XD in Albacora, and future wells drilled in both Albacora and Corvina, to be regulated by the new Peruvian well testing regulation which allows companies six months to evaluate a new well, before applying for the Extended Well Testing program to continue testing, if necessary. However, the DGH may impose limits on any extended well test as was the case with our five Corvina wells as described above.

Tags: BPZ Resources