BPZ Energy provided the following operations update.
Manolo Zuniga, President and CEO of BPZ Energy commented,"Our development drilling program continues with two new wells having come online in July, the new CX15-7D development well has been spud, and the Albacora A-18D sidetrack well is also underway. As we previously mentioned, the A-18D well is being sidetracked to restore oil production while also targeting deeper prospective zones seen in this and other Albacora wells, including a new oil zone that is currently being tested on the recently completed A-26D well. Plans also include intervention of two recently drilled oil wells to reestablish production that has been temporarily lost, affecting our production ramp up. Onshore, we are working to finish testing the initial three exploration wells drilled in Block XXIII.
We also have a new member on our management team. I am pleased to welcome Mr. Gonzalo Ruiz as our new Vice President of Operations with over 30 years of experience in the international oil and gas industry. Gonzalo will have responsibility for all operations in Peru and Ecuador."
Offshore Block Z-1 (51% BPZ)
Production
For the second quarter ended June 30, 2014, production from offshore Block Z-1 averaged approximately 5,134 barrels of oil per day (bopd) gross, or 2,618 bopd net to BPZ. This compares to 2,792 bopd of gross production, or 1,424 bopd net to BPZ in the second quarter of 2013.
Third quarter to date 2014 gross production has averaged approximately 4,700 bopd, or 2,397 bopd net to BPZ, through July 30, 2014. This is lower than expected due to the loss of production from the A-18D while it is being sidetracked and two shut in wells that require intervention. During the month of June, these three oil wells produced a total of approximately 1,500 bopd gross or, 767 bopd net to BPZ.
Production as of July 30, 2014 was approximately 5,000 bopd gross, or 2,550 net to BPZ.
New Wells Online at Albacora and Corvina Fields
The new Albacora A-26D development well was completed on July 12, 2014 and the well has averaged gross production of 1,000 barrels of oil per day (bopd), or 531 bopd net to BPZ for the past fourteen days. For the last 24 hours the A-26D well has averaged gross production of approximately 900 bopd, or net production to BPZ of 459 bopd. This production is coming from a new deeper oil zone previously untested in Albacora which is being evaluated now, while the other known oil zones are expected to be placed on production once the ongoing evaluation of the new deeper zone is completed.
The new Corvina CX15-5D development was completed on July 6, 2014 with the well averaging gross production of 690 bopd, or 352 bopd net to BPZ for the past fourteen days. For the last 24 hours the well has averaged gross production of approximately 660 bopd, or net production to BPZ of 337 bopd.
New Corvina CX15-7D Spud
The new CX15-7D development well was spud on July 29, 2014. The well has a targeted measured depth of 8,500 feet and is expected to be completed by October 2014.
A-18D Sidetrack and Well Interventions
Work on the Albacora A-18D ST (side track) well has begun and the well is therefore not producing. Because of the new oil zone found in deeper sands on the Albacora A-26D well, the A-18D ST will be drilled to a depth of 13,600 which is up to 1,000 feet deeper than the original A-18D well depth. The well is expected to be completed by late September 2014.
In early July the Albacora A-21D well and the CX15-3D were shut in due to high water production. Preliminary well interventions have been agreed to with our partner to isolate the respective water producing sands to potentially restore oil production to both wells during the current quarter.
Onshore Block XXIII (100% BPZ)
Testing on the initial three-well exploration program at Block XXIII continues and is expected to be completed by the end of September 2014. The testing program aims at evaluating the prospective zones identified in the Mancora, Heath, and Zorritos formations.
New Vice President of Operations
Mr. Gonzalo Ruiz joined BPZ Energy in July 2014 as Vice President of Operations. He has over 30 years of experience in the oil and gas industry, including over 25 years working with Occidental Petroleum in various roles, more recently as Vice President & General Manager for Bolivian operations. Beyond the U.S., his international career includes operational leadership roles in Ecuador, Colombia, Syria, Oman, Yemen, China, and Bangladesh. Gonzalo received his Bachelor's degree in Petroleum Engineering and his MBA from the University of Texas, in Austin, Texas.
