BPZ Resources, Inc. - Shareholder.com

(1) Includes crude oil, condensate and natural gas liquids.
(2) Natural gas volumes have been converted to equivalent natural gas liquids and crude oil volumes using a conversion factor of six
thousand cubic feet of natural gas to one barrel of natural gas liquids and crude oil.
(3) Based on an independent reservoir engineer’s report provided by the operator of the Santa Elena property.
(4) The Company does not currently have the financial capacity or commitments for a development program of this magnitude for its
gas reserves. Accordingly, the Company has not disclosed amounts of proved gas reserves in its SEC filings. At such time as the
Company obtains sufficient financial commitments to proceed with the full development of the gas-to-power project and all other
conditions necessary to record proved reserves are met, the Company expects to record SEC proved gas reserves as permitted
under SEC rules and disclose such reserves in future SEC filings.
(5) The Company did not have the financial capacity or commitments for a development program of this magnitude. Accordingly, the
Company did not disclose amounts of proved reserves in its SEC filings for the year ended December 31, 2006.
(6) The 2007 balance represents the initial oil reserves as a result of completing the two initial wells drilled and completed by the
Company toward the end of 2007. The 2008 additions to the extensions and, discoveries and additions of 7.8 MMBbls were due
to additional wells drilled in 2008. The 2009 additions to the extensions and discoveries and additions of 22.8 MMBbls were due
to additional wells drilled in the Corvina field (12. 8 MMBbls) and the discoveries of the Albacora field (10.1 MMBbls). The
2010 additions to the extensions and, discoveries and additions of 2.6 MMBbls were due to additional wells drilled in the Corvina
field.
(7) The 2008 negative revisions were due to price. The 2007 reserve analysis as prepared by NSAI used $85.49 per barrel price
while the 2008 reserve analysis as prepared by NSAI used a $37.80 per barrel price, resulting in a negative revision of 1.7
MMBbls in 2008. The 2009 reserve analysis as prepared by NSAI included negative revisions due to performance. The negative
revision was due to the lower than expected performance of the CX11-14D, CX11-18XD, and CX11-20XD wells and
corresponding revisions of other wells resulting in a negative revision of 1.6 MMBbls. The 2010 reserve analysis as prepared by
NSAI included positive revisions due to price of approximately 347 MBbls that was partially offset by negative revisions of
approximately 28 MBbls due to performance. The 2010 reserve analysis as prepared by NSAI used a $76.92 per barrel price
while the 2009 reserve analysis as prepared by NSAI used a $57.30 per barrel price.
(8) The 2008 oil production was from the Corvina field. The 2009 oil production of 991 MBbls includes 984MBbls from the Corvina
field and 7 MBbls from the Albacora field. The 2010 oil production of 1,527 MBbls includes 1,123MBbls from the
Corvina field and 404 MBbls from the Albacora field.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Natural Gas Reserves
The following information has been developed utilizing procedures prescribed U.S. GAAP and based on natural gas and crude
oil reserve and production volumes estimated by the independent petroleum reservoir engineers. This information may be useful for
certain comparison purposes but should not be solely relied upon in evaluating the Company or its performance. Further, information
contained in the following table should not be considered as representative of realistic assessments of future cash flows, nor should the
standardized measure of discounted future net cash flows be viewed as representative of the current value of the Company’s oil and
natural gas assets.
The future cash flows presented below are based on sales prices, cost rates and statutory income tax rates in existence as of the
date of the projections. It is expected that material revisions to some estimates of natural gas and crude oil reserves may occur in the
future, development and production of the reserves may occur in periods other than those assumed, and actual prices realized and costs
incurred may vary significantly from those used. Income tax expense has been computed using expected future tax rates and giving
effect to tax deductions and credits available, under current laws, and which relate to oil and natural gas producing activities.
Management does not rely upon the following information in making investment and operating decisions. Such decisions are
based upon a wide range of factors, including estimates of probable as well as proved reserves and varying price and cost assumptions
considered more representative of a range of possible economic conditions that may be anticipated.
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