BPZ Energy
Exploration & Development
Pritchard Capital’s Energize 2011
January 5-6, 2011
Forward Looking Statements
This Presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.These
forward looking statements are based on our current expectations about our company, our properties, our estimates of
required capital expenditures and our industry. You can identify these forward-looking statements when you see us using
words such as "expect," "will", "anticipate," "indicate," "estimate," "believes," "plans" and other similar expressions. These
forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward looking statements. Such uncertainties include the success of our project financing efforts,
accuracy of well test results, well refurbishment efforts, successful production of indicated reserves, satisfaction of well
test period requirements, successful installation of required permanent processing facilities, receipt of all required
permits, results of seismic date acquisition efforts, and the successful management of our capital expenditures, and other
normal business risks. We undertake no obligation to publicly update any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future. We caution you not to place undue
reliance on those statements.
The U.S. Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose
only “reserves” that a company anticipates to be economically producible by application of development projects to
known accumulations, and there exists or is a reasonable expectation there will exist, the legal right to produce or a
revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all
permits and financing required to implement the project. We are prohibited from disclosing estimates of oil and gas
resources that do not constitute such “reserves” in our SEC filings. We may use certain terms in this presentation such as
“oil in place,” “oil zones,” and “oil sands,” which imply the existence of quantities of resources which the SEC guidelines
strictly prohibit U.S. publicly registered companies from including in reported reserves in their filings with the SEC. U.S.
investors are urged to consider closely the disclosure in our SEC filings, available from us at 580 Westlake Park Blvd.,
Suite 525, Houston, Texas 77079; Telephone: (281) 556-6200. These filings can also be obtained from the SEC via the
internet at www.sec.gov.
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BPZ’s Asset Base
Blocks Z-1, XIX & XXIII
• Located in the Tumbes & Talara Basins
• North of the Talara Basin Fields that have produced
over 1.5 BBO
• South of the Amistad Field (Progresso Basin Ecuador)
with proven reserves of 1 TCF
• Production from the Tumbes Basin goes back to the
1800s with the Zorritos Field
• Hydrocarbons tested in several wells in the basin
Albacora
Field
Oil discovered by BPZ in the Corvina Field
Corvina in 2007 suggests the high prospectivity of the area.
Field
Block XXII
Deep
Deep Water
Water • Located in the underexplored Lancones Basin
Leads
Leads
• Block is NE of the southernmost Talara Basin Fields
• Surface Geochemical Survey indicates possible
Talara presence of hydrocarbons
Fields • Large structures identified by seismic & surface
geology
3
Management Aligned to Execute Strategy
Richard Spies, Chief Operating Officer
Over 30 years experience in large scale projects with major oil and gas operators Amoco,
Pan American Energy (a BP subsidiary), and BP Russia.
Frederic Briens, Chief of Strategy and Technology
Brings over 20 years experience in international projects with major and independent
oil companies and was instrumental in bringing BPZ to early oil testing phase.
Cesar Ortega, VP Operations, Peru
Over 25 years experience, including some of the largest oilfields in Colombia,
and most recently with BP Americas Inc. in large scale oil and gas projects.
Herb Mills, Director Gas to Power
Came to BPZ from Duke Energy International with over 20 years experience developing
projects in Latin America.
Reynaldo Llosa, Assistant General Manager, Peru
Brings over 25 years experience from Schlumberger where he managed drilling projects
in Latin America as well as other international markets.
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2010 Highlights
• Initial Exploration Success at Albacora Grows Reserves
– A-14XD online and testing with EWT through mid January 2011
– New field development plan for 2011
• Proved Oil Reserve Growth of 119% (YE 2009 vs. YE 2008)
– From 17.0 to 27.5 Mmbo Proved Oil in Corvina
– From 0 to 10.0 Mmbo Proved Oil in Albacora
• BPZ Marine Receives Certification to the ISO 9001 and
14001 Quality and Environmental Management Standards
• Raised Capital for Exploration and Development
– $171 million in convertible notes
• NSAI Certified Mancora Gas Play Resources (Total Gas Potential of 35.5 Tcf)
– Completed 2-D seismic in southern section of Block XXIII November 2010
– Started 3-D seismic in core of the Mancora Gas Play November 2010
• Corvina Now on Commercial Production as of November 30th
− Wells reopened and compressor working as expected
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Developing Our
First Two Oil Fields
6
7
Barrels of Crude Oil
Production History
SEC Proved Oil Reserves – Corvina & Albacora
40
37.5 Mmbo
Corvina
Albacora
Albacora
30 10 Mmbo
Mmbo
20
17 Mmbo
Corvina
27.5 Mmbo
11.9 Mmbo
10
0
YE 2007 YE 2008 YE 2009
Reserves Estimated by Netherland Sewell & Associates, LLP
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Oil in Place and 3P Reserves – Corvina & Albacora
400
2007
2008
300 2009
Albacora
Mmbo
200
Albacora
100 Corvina
Corvina
0
Potential Oil in Place 3P Reserves
• NSAI Estimated 2007, 2008, 2009 OOIP and Reserves
• YE 2009 Includes Albacora
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Improving Corvina Drilling Costs
136 Days
Days to Drill & Complete
77 Days
$11.6M
Drilling Costs
$8.3M
First 5 Corvina Wells
Last 4 Corvina Wells
$9.2M
Completion Costs/Testing
$3.2M
$28.3M
Total Well Costs
$13.8M
Averages are approximate for the nine BPZ wells in Corvina
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Corvina Injection Facilities Î Commerciality
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Albacora---Our Second Oil Field
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Development Roadmap
2010 2011 2012
• Meet the 11/30/2010 • Work-over some • Install new CX-15 platform
Corvina date for first existing wells to • Drilling resumes in 2H2012
commercial production optimize oil production
Albacora
• Gas re-injection equipment
• 3-D seismic acquisition, • One exploration
processing and well by year-end
Block Z-1 2012
interpretation
•
Block XIX well site prep
• Block XIX Exploration Well • Block XXII and
Onshore • Block XXIII 2-D Seismic (southern section completed) XXIII exploration
Blocks • Block XXIII 3-D Seismic wells by year-
end 2012
• Block XXII 2-D seismic
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Our Gas Strategy
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The Mancora Gas Play (Contingent Gas Resources)
East
Corvina
West
.
Corvina
5215
Piedra
Redonda CDX-1
Contingent resources estimated as of June 20,2010 by Netherland
Sewell & Associates. These are estimates based on SPE rules set forth
by the Society of Petroleum engineers and are not reserves permitted to
be disclosed in our public filings by the Securities and Exchange
Commission. These resource estimates cannot be guaranteed.
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Peru’s Growing Natural Gas Demand
600
Northwest
500
Millions of Cubic Feet per Day
Offshore
400 Jungle
300
200
100
0
2000 2001 200 2003 2004 2005 2006 2007 200 2009 2010
2 8
• Natural gas output up 74.47% in first 9-months
Peru’s natural gas production reached 161.5 Bcf during the first three quarters of 2010,
which represents a 74.47% increase over to the same period last year.
Source: Perupetro, October 22, 2010
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Corvina Gas-to-Power Project
line
il e Pipe
10 M
Improves Enterprise Value Corvina SPE Gas Reserves
• Facilitates sale and booking of gas reserves
• Initial Wells are already drilled GIP Reserves RF
Gas
(BCF) (BCF) (% GIP)
Provides Operational Enhancements 1P 250 195 78
• Reduces annual unit production costs ($/boe)
2P 342 240 70
• Creates market for associated gas
3P 342 270 79
Reserves estimated by Netherland Sewell & Associates as of June 30, 2010. These are
estimates based on SPE rules set forth by the Society of Petroleum Engineers and are
commonly used by banks for project financing; but these volumes are not permitted in our
public filings by the Securities and Exchange Commission. These reserves cannot be
guaranteed.
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Proposed Northern Gas Pipeline
• Gasifying Northern Peru
1. Talara-Refinery
2. Talara-Power
3. Paita-Urea
4. Bayovar-Phosphates 200 Mmcfd
5. Bayovar-Petrochem
6. Chiclayo-Cement
7. Trujillo-Power
8. Chimbote-Steel
• Prospective Resources in the MGP
– Low: 5.2 Tcf
– Medium:13.3 Tcf
– High: 33.0 Tcf
Prospective resources estimated as of June 30, 2010 by Netherland Sewell &
Associates. These are estimates based on SPE rules set forth by the Society of
Petroleum Engineers and are not reserves permitted to be disclosed in our
public filings by the Securities and Exchange Commission. These estimates
cannot be guaranteed.
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Block XIX Pampa la Gallina
Corvina Field
• Nueva Esperanza
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West
Corvina
Delfin
Building a Balanced
Asset Base
Mero
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Searching for Oil Offshore and Onshore
Block Z-1
•3-D Seismic in 2011
•Delfin, step out to 39X-1 discovery well
•Mero Lead
•Multiple leads in 500’ – 1,000’ of water
Block XIX
•Pampa La Gallina prospect
•Oil in Heath Formation
•Three other mapped locations
Block XXII
•Multiple Plays in Multiple Targets
•Adjacent to Existing Oil Fields
•2D Seismic began 4Q2010
Block XXIII (southern section)
•Completed 2-D seismic survey over southern
section November 2010
•3-D underway in core of MGP
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Block XXII Targeting Oil and Gas
• Targeting oil and gas from
Paleozoic up to Tertiary rock
• Planned 2D seismic---mapped
258 Km (1Q2011)
• Adjacent to existing proved oil
and gas accumulations
• Oil production from Paleozoic
formation in nearby
Portachuelo, San Pedro
(offshore), and La Isla oilfields
• Close proximity to Talara
refinery and oil services, as well
as deep water port in Paita
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Our Commitment to the Community
• 70 children in Wawa Wasi daycare centers
• 15 university scholarships funded
• 300+ jobs created outside oil & gas
• 3,000+ are supported by annual health campaigns
• 10,000 children per year benefited from social initiatives
• 2009 Culture of Peace Award
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Additional Information NYSE:BPZ
Number of Shares
• 115 Million Shares Outstanding
• 145 Million Shares Fully Diluted
(includes Feb 2010 Convertible Notes due March 2015)
Share Ownership
• Management 15%
• Institutional Ownership 65%
Largest Holders
• International Finance Corporation
• Centennial Energy Partners
• SPO Partners
• Soros Fund Management
• Wellington
Contact
Greg Smith
Director of Investor Relations & Corporate Communications
[email protected]
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BPZ Energy
Thank You!
