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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,DC 20549**

 

**Form 10-K/A**

 

**(Amendment No. 1)**

 

**x****     ****ANNUAL REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thefiscal year ended December 31, 2009**

 

**or**

 

**o****        ****TRANSITION REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For thetransition period from              to               **

 

**CommissionFile Number: 001-12697**

 

**BPZ Resources, Inc.**

(Exact name of registrantas specified in its charter)

 

| **Texas**                                       | ** ** | **33-0502730**                           |
|-------------------------------------------------|------------|------------------------------------------|
| (State or other  jurisdiction of incorporation) |       | (I.R.S. Employer  Identification Number) |

 

**580Westlake Park Blvd., Suite 525**

**Houston,Texas 77079**

 (Address of principal executive office)

 

Registrant’s telephonenumber, including area code:  **(281)556-6200**

 

Securities registered pursuant to Section 12(b) ofthe Act:

 

| **Title  of Each Class**    | ** ** | **Name of  Each Exchange on Which Registered** |
|-----------------------------|------------|------------------------------------------------|
| Common Stock, no par  value |       | New York Stock Exchange                        |

 

Securities registered pursuant to Section 12(g) ofthe Act:** None**

 

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o   No  x

 

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or 15(d) of the Act. Yes  o   No  x

 

**Note** — Checking the box above will notrelieve any registrant required to file reports pursuant to Section 13 or15(d) of the Exchange Act from their obligations under those Sections.

 

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90days.  Yes  x   No  o

 

Indicate by check mark whether the registrant hassubmitted electronically and posted on its corporate website, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405of Regulation S-T (§ 232.405 of this chapter) during the preceding 12-months(or for such shorter period that the registrant was required to submit and postsuch files).  Yes  o   No  o

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.  o

 

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, a non-accelerated filer or asmaller reporting company.  See the definitions of “large acceleratedfiler,” “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act.

 
| Large accelerated  filer  o |   | Accelerated  filer  x          |
|---------------------------------------|--------|------------------------------------------|
|                                  |   |                                     |
| Non-Accelerated  filer  o   |   | Smaller reporting  company   o |

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act) Yes  o   No  x

 

The number of shares of Common Stock held bynon-affiliates as of June 30, 2009 was 64,700,845 shares, all of one classof common stock, no par value, having an aggregate market value ofapproximately $316,387,132 based upon the closing price of registrant’s commonstock on such date of $4.89 per share as quoted on the New York Stock Exchange.For purposes of the foregoing calculation, all directors, executive officers,and 5% beneficial owners have been deemed affiliated.

 

As of April 28, 2010 there were 115,223,926shares of common stock, no par value, outstanding.

 

**DOCUMENTSINCORPORATED BY REFERENCE**

 

None.

 

 

 

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**EXPLANATORYNOTE**

 

Pursuant to Rule 12b-15 of the SecuritiesExchange Act of 1934, BPZ Resources, Inc. (the “Company”, “BPZ”, “we”, “us”,or “our”) hereby amends its Annual Report on Form 10-K for the year ended December 31,2009 (the “Original 10-K”) to include the information required by Items 10, 11,12, 13 and 14 of Part III relating to Directors, Executive Officers andCorporate Governance of the Company, Executive Compensation, Security Ownershipof Certain Beneficial Owners and Management and Related Stockholder Matters,Certain Relationships and Related Transactions, and Director Independence, andPrincipal Accounting Fees and Services, respectively.  Certain informationrequired by Part III was to be incorporated by reference to the Company’sdefinitive proxy statement for the 2010 Annual Meeting of Shareholders (the “ProxyStatement”) to be subsequently filed with the Securities and ExchangeCommission (“SEC”).  The Company hasdetermined to amend the Form 10-K to include such Part IIIinformation in this Amendment No. 1 to the Annual Report on Form 10-K/A(the “Form 10-K/A”), rather than incorporating it into the Form 10-Kby reference to the definitive Proxy Statement. Accordingly, Part III, Items 10 through 14 of the Company’sOriginal 10-K are hereby amended and restated in their entirety.  Nomodification or update to other disclosures as presented in the Original 10-Khave been made.  Accordingly, this Form 10-K/Ashould be read in conjunction with the Company’s Original Form 10-K andsubsequent filings with the SEC.

 

**TABLE OFCONTENTS**

 
| **PART III** | ** **                                                                                       | ** ** |
|-------------------|--------------------------------------------------------------------------------------------------|------------|
| Item  10.         | Directors,  Executive Officers and Corporate Governance                                          | 1          |
| Item  11.         | Executive  Compensation                                                                          | 4          |
| Item 12.          | Security  Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters | 16         |
| Item 13.          | Certain  Relationships and Related Transactions, and Director Independence                       | 19         |
| Item 14.          | Principal  Accounting Fees and Services                                                          | 20         |
| **PART IV**  |                                                                                             |       |
| Item 15.          | Exhibits,  Financial Statement Schedules                                                         | 22         |
| Signatures        |                                                                                             |       |
| EX-31.1           | Exhibit 31.1                                                                                |       |
| EX-31.2           | Exhibit 31.2                                                                                |       |

 

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**PART III**

 

**ITEM 10.****                                             ****DIRECTORS, EXECUTIVEOFFICERS AND CORPORATE GOVERNANCE**

 

**Directors**

 

The following table sets forth the names of thedirectors of the Company (including directors who are also executive officers),along with their positions and ages, as of April 30, 2010.

 
| **Name**                                                 | ** ** | **Age** | ** ** | **Position**                                     |
|----------------------------------------------------------|------------|---------|------------|--------------------------------------------------|
| Dr. Fernando Zúñiga y Rivero (1) (4) |       | 83      |       | Chairman of the Board of Directors               |
| Manuel Pablo Zúñiga-Pflücker (1) (2) |       | 49      |       | President, Chief Executive Officer, and Director |
| Gordon Gray (3)                                          |       | 57      |       | Director                                         |
| John J. Lendrum, III (2)                            |       | 59      |       | Director                                         |
| James B. Taylor (2)                                      |       | 72      |       | Director                                         |
| Dennis G. Strauch (4)                                    |       | 62      |       | Director                                         |
| Stephen C. Beasley (3)                                   |       | 58      |       | Director                                         |

 

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(1)               Dr. Zúñiga y Rivero is the father of the Company’sPresident, Chief Executive Officer and Director, Mr. Zúñiga-Pflücker.There are no other family relationships between any directors or executiveofficers of the Company.

 

(2)               Class III Director with term expiring at the 2010Annual Meeting of Shareholders.

 

(3)               Class I Director with term expiring at the 2011Annual Meeting of Shareholders.

 

(4)               Class II Director with term expiring at the 2012Annual Meeting of Shareholders.

 

Set forth below are brief descriptions of the recent employment and businessexperience of the directors of the Company (including directors who are alsoexecutive officers).

 

**Dr. Fernando********Zúñiga y Rivero, Chairman of the Board.**  Dr. Zúñiga y Riverohas served as Chairman of the Board of the Company since September 2004.From 1996 until September 2004, he served as Chairman of BPZ &Associates Inc., the formerparent company of our subsidiary, BPZ Energy, LLC. Dr. Zúñiga y Riverowas also an Energy Division Project Officer of The World Bank, where he plannedand implemented exploration promotion projects in 58 countries, primarily inEast and West Africa, Eastern Europe, Southeast Asia and Latin America from1979 to 1996. Dr. Zúñigay Rivero has fifty years of experience in the international energy industrystarting as an exploration geologist, biostratigrapher, and exploration head ofan Exxon affiliate in Peru where he was responsible for crude oil findings infive fields producing from Paleozoic rocks; and continuing as explorationproduction manager, integrated operations manager, general manager, andultimately serving as Chairman and Chief Executive Officer of Petroleos delPeru, the national oil company of Peru, and was responsible for discovery offive large oilfields (with over 2.5 billion barrels of reserves) in the Amazonjungle of Peru. Dr. Zúñiga y Rivero holds a B.S. degree in GeologicalEngineering and a Ph.D. degree in Geology from the University of San Augustin,Peru, and he completed postgraduate studies at the University of California,Los Angeles. Dr. Zúñigay Rivero served as a director of Transmeridian Exploration, Inc., a publicoil and gas company with operations in Kazakhstan from April 2005 until May 2007.Dr. Zúñigay Rivero is the father of the Company’s President, CEO and Director, Mr. Zúñiga-Pflücker.  We believe Dr. Zúñiga y Rivero’svast industry experience and knowledge has given him an invaluable perspective on the oil andgas industry in which the Company operates, and particularly the company’sproperties and operations in Peru and the specific issues affecting ourbusiness.

 

**ManuelPablo********Zúñiga-Pflücker, President, ChiefExecutive Officer, and Director.**Mr. Zúñiga-Pflücker has beenPresident of the Company since September 2004 and in May 2005 heassumed the additional title of Chief Executive Officer of the Company. From2001 until September 2004, Mr. Zúñiga-Pflücker served asPresident of our subsidiary BPZ Energy, LLC. Mr. Zúñiga-Pflückeralso served as President of BPZ & Associates, Inc., the formerparent company of our subsidiary BPZ Energy, LLC. from 1989 until September 2004,at which time BPZ & Associates, Inc. became inactive. Mr. Zúñiga-Pflückerbegan his career with Occidental Petroleum Corporation. Mr. Zúñiga-Pflückerhas spent the past 20 years in the international oil and gas business, and hehas been involved in projects throughout Latin America and other areas of theworld 

 

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ranging from exploitation ofmarginal oil and gas fields to frontier exploration projects. He has alsofocused on the creative development of natural gas fields utilizing powergeneration and gas to liquids technology. He holds a B.S. in MechanicalEngineering from the University of Maryland as well as an M.S. in PetroleumEngineering from Texas A&M University. Dr. Zúñiga y Rivero,the Company’s Chairman of the Board, is the father of Mr. Zúñiga-Pflücker.  We believe Mr. Zúñiga-Pflücker brings to the Board ofDirectors extensive knowledge of the Company and its assets by virtue of hisservice as an executive officer and director of the Company since its founding,and the energy industry generally through his background and education.

 

**GordonGray, Director.** Since 1982, Mr. Gray has served as President of AlliedCrude Purchasing, Inc., a privately owned transportation company, whichpurchases crude oil at the well site and transports it by truck or pipeline tosales points throughout Texas and Eastern New Mexico. Mr. Gray has ownedand operated oil production and oil field service businesses for over 30 years.His activities are centered in the Permian Basin area of West Texas.  We believe Mr. Gray, who has served as a Director of theCompany since its founding, brings to the Board of Directors extensiveknowledge of the energy industry and business development experience.

 

**John J.Lendrum, III, Director.**Mr. Lendrum wasappointed in April 2005 as President, Chief Operating Officer and aDirector of Torch Energy Advisors Incorporated (“Torch”), a Houston-basedcompany which specializes in the exploitation and development of oil and gasproperties, mid-stream gas assets, and well servicing. Mr. Lendrum is alsothe Chief Executive Officer and member of the Board of Directors of ResacaExploitation, Inc., which is listed on the Alternative Investment Marketof the London Stock Exchange. From 1993 to 2005, Mr. Lendrum founded andserved as President of Rockport Resources Capital Corporation, which focused onproviding capital to the energy industry. During this period, he was also aPrincipal in Star Natural Gas Company, a privately-held company with mid-streamnatural gas assets. Previously, Mr. Lendrum served as Executive VicePresident and Chief Financial Officer of Torch and in senior financial andbusiness development roles with the Torch managed companies of Nuevo EnergyCompany, Energy Assets International and Bellwether Exploration. Mr. Lendrumbegan his career with the international public accounting firm of KPMG PeatMarwick, and he earned a B.B.A. in Finance and completed his graduate studiesin Accounting Theory at The University of Texas at Austin.  We believe Mr. Lendrum’s education andaccounting background, industry, business development and management experiencebrings valuable skills to our Board and qualifies him to serve on our AuditCommittee as our financial expert.

 

**James B.Taylor, Director.** Mr. Taylor was Chairman of the Board of Directors and the co-founder ofSolana Petroleum, a Canadian publicly traded company that had explorationactivities in Colombia, from 1997 until 2000. From 1994 until 1996, Mr. Taylorserved as Executive Vice President of Occidental Oil and Gas (“Occidental”)where he was responsible for worldwide exploration and operations. Also whileat Occidental, he was involved in the development of the Cano Limon discoveryin the Colombian Llanos, including construction of a major trans-Andeanpipeline and marine export terminal. From 1990 until 1993 he managed CanadianOccidental’s worldwide activities as Chief Operating Officer, including thediscovery and development of the Masila fields in Yemen and construction of apipeline and marine export terminal.  In addition, Mr. Taylor hasserved on the boards of directors of four publicly held oil and gas companies:Willbros Group, Inc., a worldwide engineering and pipeline constructioncompany (from 1998 until 2009), TMBR-Sharp Drilling, Inc. (from 2000 until2004), Solana Petroleum Corp. (from 1997 until 2000) and Arakis Energy Corp.(from 1996 until 1998).  We believe Mr. Taylor’sover 47 years experience, including prior service as a director for publiccompanies, in the oil and gas sector gives him a valuable perspective on theoil and gas industry and reporting environment in which the Company operates.

 

**DennisG. Strauch, Director.**  Mr. Strauch has served since2001 as Managing General Partner of Delmar Holdings, LP, a private firm whichmanages U.S. oil and gas properties. From 1992 to 2001, Mr. Strauch heldvarious positions, including President and CEO, with Zarara Oil and Gas Limitedand its predecessors. Zarara, a publicly traded company in the U.S. and U.K.,had international oil and gas operations in Africa, the Middle East, the FarEast and South America. Mr. Strauch has over 35 years experience in theoil and gas industry with extensive international and domestic technicalexperience in the areas of acquisitions, reservoir engineering and economicevaluations.  Mr. Strauch began hiscareer with Schlumberger and has served in senior management and technicalpositions with ARAMCO, Petro-Lewis, Whiting Petroleum and Geodyne Resources. Mr. Strauchholds a Master’sdegree in Business Administration from theUniversity of Denver and a degree in Geophysics from the Colorado School ofMines. Mr. Strauch is a Registered Professional Engineer in the State ofColorado.  We believe Mr. Strauchbrings significant experiencein and knowledge of the energy industry and technical expertise to our Board.

 

**StephenC. Beasley, Director. **Mr. Beasley is the founder and ChiefExecutive Officer of Eaton Group Inc., an executive solutions and strategicinvestment firm, since 2008.  He served as President of El PasoCorporation’s Eastern 

 

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Pipeline Group from 2003 until 2007 and was a member of El PasoCorporation’s Corporate Executive Committee from 2005 until 2007.  In his role, Mr. Beasley was Chairman andPresident of Tennessee Gas Pipeline Company and ANR Pipeline Company - two of thelargest transmission systems in the United States.  In addition, Mr. Beasleypreviously served as an independent director for Williams Pipeline Partners,L.P. from 2007 until 2009, Southern Union Company in 2009, and C Sixty Inc.from 2002 until 2005.  We believe Mr. Beasley’sdiverse management experience of over 30 years in the energy and chemicalindustries and his prior service as an independent director for publiccompanies gives him valuable insight on the oil and gas industry and reportingenvironment in which the Company operates.

 

**Executive Officers**

 

The following table sets forth the names of theexecutive officers who are not directors of the Company, along with theirpositions and ages, as of April 30, 2010.

 
| **Name**          | ** ** | **Age** | ** ** | **Position**            |
|-------------------|------------|---------|------------|-------------------------|
| Frederic Briens   |       | 50      |       | Chief Operating Officer |
| Edward G. Caminos |       | 47      |       | Chief Financial Officer |

 

Set forth below are brief descriptions of the recent employment and businessexperience of the executive officers who are not directors of the Company.

 

**FredericBriens, Chief Operating Officer.**  Mr. Briens has served as ChiefOperating Officer of the Company since May 2005. Mr. Briens joined BPZ as VicePresident of Engineering in December 2004.From 2002 through 2004, Mr. Briensserved as Geosciences and Business Development Manager for Perenco VenezuelaS.A. From 1999 to 2002, Mr. Briens was the Chief Reservoir Engineer for Lundin Petroleum inSwitzerland. Mr. Briens is a Petroleum Engineer with over twenty years ofoperating experience in international oil and gas projects spanning the globe.He has also served in senior technical and operating positions with Conoco,Schlumberger and Chevron. Mr. Briens holds an M.S. and a Ph.D. inPetroleum Engineering from Texas A&M University, a Master’s degree inBusiness Administration from Colorado State University and an Engineeringdegree from Ecole Centrale de Paris. Mr. Briens was a co-founder of BPZ &Associates, Inc., a predecessor to the Company, in 1989.

 

**EdwardG. Caminos, Chief Financial Officer**.  Mr. Caminos was appointed Chief FinancialOfficer of the Company in May 2007. From October 2006 until May 2007,Mr. Caminos served as Vice President - Finance and Chief AccountingOfficer. Mr. Caminos served as interim Chief Financial Officer from June 15,2006 until October 30, 2006 and as Corporate Controller of the Companyfrom January 2005 until October 30, 2006. Prior to joining theCompany, Mr. Caminos served as Director—Financial Reporting for the AmericasDivision at Duke Energy from June 2004 to January 2005. From February 2001to May 2004, Mr. Caminos served as Financial Reporting Manager and,prior to its sale, as interim Controller for the Europe Division at ReliantEnergy. Mr. Caminos is a CPA and holds a Bachelor’s Degree in BusinessAdministration — Accounting from Bloomsburg University of Pennsylvania.

 

**TheAudit Committee**

 

Messrs. Lendrum, Beasley, Gray and Strauch serveon our Audit Committee, all of whom are “independent” under both the standardsof the New York Stock Exchange (“NYSE”) and the SEC rules and regulationspertaining to listed company audit committees. The Board considers Mr. Lendrum, Chairman of the Audit Committee, an “auditcommittee financial expert,” as defined under the rules of the SEC.  The Audit Committee recommends to the Boardof Directors the independent registered public accounting firm to audit ourfinancial statements and oversees the annual audit. The Audit Committee alsoapproves any other services provided by public accounting firms.  The Audit Committee provides assistance tothe Board of Directors in fulfilling its oversight responsibility to theshareholders, the investment community and others relating to the integrity ofour financial statements, our compliance with legal and regulatoryrequirements, the independent registered public accounting firm’squalifications and independence and the performance of our internal auditfunction.  The Audit Committee overseesour system of disclosure controls and procedures and system of internalcontrols regarding financial, accounting, legal compliance and ethics thatmanagement and the Board of Directors have established.  In doing so, it will be the responsibility ofthe Audit Committee to maintain free and open communication between the AuditCommittee and our independent registered public accounting firm, the internalaudit function and management of the Company. Additionally, the Audit Committee provides oversight to the process ofdetermining our estimated reserves and may utilize 

 

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independently engaged experts as necessary.  A copy of the Audit Committee’s Charter isposted on the Company’s website at *www.bpzenergy.com*and is available in print to any shareholder upon request.

 

**Section 16(a) -Beneficial Ownership Reporting Compliance**

 

Section 16(a) of the Securities and ExchangeAct of 1934, as amended, requires our executive officers and directors, as wellas persons who own more than ten percent of a registered class of the Company’sequity securities to file initial reports of beneficial ownership on Form 3and changes in ownership on Forms 4 or 5 with the SEC.  Such executive officers, directors and tenpercent shareholders are also required by SEC rules to furnish the Companywith copies of all Section 16(a) forms they file.

 

To our knowledge, based solely on a review of copiesof reports furnished to the Company, all reports which were required to befiled pursuant to Section 16(a) of the Exchange Act for the year ended December 31,2009 were filed on a timely basis other than the following:  Gordon Gray filed a Form 4 late for onetransaction; Dennis G. Strauch filed a Form 4 late for one transaction;and John J. Lendrum, III filed a Form 4 late for one transaction.

 

**Codeof Ethics for Executive Officers**

 

The Company has adopted a code of ethics for itsexecutive officers (the “Code of Ethics”) that relates to standards that arereasonably designed to deter misconduct and to promote:

 

(1)                                Honest and ethical conduct, including theethical handling of actual or apparent conflicts of interest between personaland professional relationships;

(2)                                Full, fair, accurate, timely andunderstandable disclosure in reports and documents that are filed with, or submittedto, the SEC and in other public communications made by an issuer;

(3)                                Compliance with applicable governmentallaws, rules and regulations;

(4)                                The prompt internal reporting ofviolations of the code to an appropriate person or persons identified in thecode; and

(5)                                Accountability for adherence to the code.

 

The Company’s Code of Ethics for executive officers isavailable on the Company’s website at *www.bpzenergy.com*.

 

**ITEM 11.**                             **EXECUTIVE COMPENSATION**

 

**CompensationDiscussion and Analysis**

 

***Compensation Objectives***

 

The primary objectives of the Company’s executivecompensation program are to attract and retain key executives, to stimulatemanagement’s efforts on our behalf in a way that supports our business plan andto align management’s incentives with the long-term interests of the Companyand its shareholders.  The Compensation Committee separately reviews thecompensation and benefits of our executive officers, establishes and reviewsgeneral policies related to our compensation and benefits and administers the2007 LTIP.  Decisions on salaryadjustments and compensation awards for executive officers have been made bythe entire Board of Directors based upon the recommendations of theCompensation Committee.

 

***Role of Executive Officers in Compensation Decisions***

 

Board meetings involving consideration of compensationadjustments and awards for executive officers typically have included, for allor a portion of each meeting, not only the Board members but also our ChiefExecutive Officer and our Chief Financial Officer.  For compensationdecisions relating to executive officers other than our Chief ExecutiveOfficer, the Compensation Committee reviewed its recommended compensationadjustments for 2009 with the Chief Executive Officer before presenting them tothe Board and made adjustments as it deemed appropriate based upon thisreview.  The Board of Directors then considered the recommendations fromthe Compensation Committee and approved the 2009 salary adjustments forexecutive officers as presented. The Compensation Committee will not make anydetermination with regard to 2010 compensation adjustments until soon after theCompany’s 2010 annual meeting of shareholders. However, 2010 compensation 

 

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decisions will use the same criteria used to determine compensation in2008 and 2009, including taking into account the Company’s and individualexecutive’s performance in light of the global financial condition, the stateof the economy, the state of the oil and gas industry and the performance ofthe Company’s stock price in light of these conditions.

 

***Role of the Compensation Consultants***

 

In November 2007, the Compensation Committeeengaged Pearl Meyer & Partners as its outside compensation consultantsto review both executive and director compensation.  The scope of the compensation consultants’engagement was to compile data from proxy statements and other SEC filings andsurveys in order to determine market norms of compensation for the Company’sindependent directors and members of senior management.  The results were presented to theCompensation Committee in a report on independent directors and a report on seniormanagement.  Pearl Meyer &Partners provided the Compensation Committee with data in the reports showingthe total compensation package that the executive officers and other keyofficers would receive, by element (base salary, annual incentive plan amounts,total cash compensation and long-term incentives), at each of a variety ofdifferent potential pay levels and relative to similarly situated employees atcompanies within our Compensation Peer Group and in light of relevant marketdata.

 

As stated in the Pearl Meyer & Partnersreport, the market data was comprised of a broad base of company data with somegeneral industry information from survey sources, including William M. Mercer,Watson Wyatt, and other proprietary general and energy executive compensationdatabases.

 

As stated in the Pearl Meyer & Partnersreport, the peer group information was based on more refined market dataconsisting of companies with statistics more comparable to us and with whom wewould potentially compete for executive talent. Pearl Meyer & Partners selected the companies within theCompensation Peer Group based on the same industry and/or recruiting market forexecutive talent or traced similarly by analysts, comparable revenue range andcomparable complexity and business risk. The Compensation Peer Group consisted of the following companies:

 

ATP Oil & GasCorp

Bill Barret Corp

Brigham Exploration Co.

Carrizo Oil &Gas, Inc.

Contango Oil &Gas Co.

Endeavour InternationalCorp

Far East Energy, Inc.

FX Energy, Inc.

Gulfport Energy Corp

Harvest Natural Resources

HKN Inc.

Rosetta Resources, Inc.

Toreador Resources Corp

Transmeridian Exploration, Inc.

TXCO Resources, Inc.

 

The Compensation Committee considered the data fromthe Pearl Meyers & Partners report in making its compensationdecisions for 2008 and 2009, as discussed further below.

 

The Compensation Committee has engaged MeridianCompensation Partners, LLC to assist it in assessing executive compensation for2010, which is expected to be determined soon after the Company’s 2010 annualmeeting of shareholders.

 

***Elements of Compensation***

 

The Company’s executive compensation program consistsof the following basic components: base salary, cash bonus, long-termincentives pursuant to the 2007 LTIP, and limited perquisites.  Eachcomponent of the compensation program serves a particular purpose.  Basesalary is designed to reward current and past performance, and may be adjustedfrom time to time to realign salaries with market levels.  Cash bonusesmay also be granted to reward individual contributions and superior jobperformance.  Grants of long-term incentives are designed to tie a portionof each executive’s compensation 

 

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to long-term future performance and encourage retention.  Inaddition, executives participate in the benefit plans and programs that aregenerally available to all employees of the Company.

 

Our Board reviews total compensation and its variouscomponents, but the Compensation Committee does not believe that significantcompensation derived from one component of compensation should negate or reducecompensation from another component.  Insetting the mix of the various components of compensation, the CompensationCommittee took into consideration the fact that the Company is an emergingexploration stage company.  In 2008, theCompensation Committee recommended upward adjustments to the cash components ofcompensation for each of the named executive officers and senior managementthat resulted in total cash compensation being more aligned with thecompensation of similar positions within the Compensation Peer Group.Additionally, in order to attract and retain highly qualified and experiencedexecutive officers and senior management, the Compensation Committee allocatedan equity-based component of compensation designed to bring total compensationcloser to the market median for each executive officer and senior managementposition.

 

*BaseSalary.*  In2008, based on the information provided in the Pearl Meyer & Partnersreport, the Board of Directors and Compensation Committee recommended andapproved an increase to the named executive officers’ base salary in order tobe closer to the (i) median percentile range within the base salary rangefor similar positions at the Compensation Peer Group companies, and (ii) themedian percentile range of the market data provided by Pearl Meyer &Partners.  Based on these factors, theCompany’s named executive officers, received the following salary increaseseffective in July 2008 (and originally intended to be in effect through June 2009):Mr. Zúñiga-Pflücker — from $300,000 to $360,000 (to the 71st percentile of peer group base salary); Mr. Caminos— from $210,000 to $240,000 (to the 57th percentile of peer group base salary); Mr.Briens — from $220,000 to $250,000 (to the 50th percentile of peer group base salary); and Dr. Zúñigay Rivero — from $225,000 to $260,000 (to the 38th percentilepeer group base salary).  In determiningthe recommendations for the appropriate level of actual compensation for eachexecutive officer within the targeted base salary range, the CompensationCommittee then considers the executive’s position and current compensation(both individually and relative to other executive officers in the Company),the executive’s performance and contributions as they relate to the Company’sgoals, objectives and strategic business plan and the compensation data from similarcompanies in the report from the Company’s consultants.

 

In response to the global financial crisis, thecommensurate slowdown of economic activity, the collapse of oil and gas pricesand the steep decline in the Company’s stock price and the particular strain onthe liquidity of the Company, the named executive officers volunteered toreduce their salaries.  As a result,effective January 1, 2009,  Dr. Zúñigay Rivero voluntarily agreed to reduce his 2009 salary to $1.00 and Mr. Zúñiga-Pflücker,Mr. Caminos and Mr. Briens agreed to voluntarily reduce their 2009salaries by 15% from $360,000 to $306,000, $240,000 to $204,000 and $250,000 to$212,500, respectively.

 

In June of 2009, the Compensation Committeedetermined to reinstate the salaries for Mr. Zúñiga-Pflücker, Mr. Caminosand Mr. Briens back to where they were prior to the voluntaryreduction. In determining to reinstate these named executive officers’salaries, the Compensation Committee’s considered the state of the globalfinancial market and economic activity and outlook, oil and gas prices and theCompany’s stock price.

 

The Compensation Committee will not make anydetermination with regard to 2010 base salary adjustments until June of2010.  However, 2010 compensation decisions will use the same criteriaused to determine compensation in 2008 and 2009.

 

*CashBonus*.  TheBoard of Directors may determine to award cash bonuses to our executiveofficers based upon exemplary performance, though it has historically done soin limited circumstances due to the early stage of the Company’s business.

 

In 2008, the Compensation Committee recommendedbonuses to the executive officers in amounts to bring their total cashcompensation to generally the median percentile range of the Compensation PeerGroup and market data.  Based on thesefactors, the Company’s named executive officers received the followingretroactive bonuses in 2008: Mr. Zúñiga-Pflücker — $200,000 (to the 76thpercentile of peer group total cash compensation); Mr. Caminos — $75,000(to the 56th percentile of peer group total cash compensation); Mr. Briens —  $100,000 (to the 54thpercentile of peer group total cash compensation); and Dr. Zúñiga y Rivero— $140,000 (to the 51st percentile of peer group total cash compensation).  The Board approved the bonuses to be paid in April 2008.In addition, the Company’s named executive officers received the following 2007bonuses 

 

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in 2008: Mr. Zúñiga-Pflücker — $200,000; Mr. Caminos —$80,000; Mr.  Briens —  $100,000;and Dr. Zúñiga y Rivero — $140,000. The Board approved the bonuses to bepaid in October 2008, contingent upon the availability of funds to doso.  The bonuses were intended to rewardexecutive officers based upon the performance of the entire senior managementteam, taking into account, in some circumstances, the individual’s performance,in achieving significant Company milestones of successful financing activitiesto fund the Company’s oil and natural gas exploration and production activitiesand related projects in Peru and Ecuador and the success of the Company’sCorvina field drilling campaign.  Inaddition, the Compensation Committee considered the individuals compensationagainst the compensation of similarly situated individuals in the Company’sPeer Group.

 

In response to the global financial crisis, thecommensurate slowdown of economic activity, the depressed oil and gas prices inthe first half of 2009, the steep decline in the Company’s stock price, and theliquidity of the Company, the Compensation Committee did not award cash bonusesin 2009 to Mr. Zúñiga-Pflücker, Mr. Briens or Dr. Zúñiga yRivero.  The Compensation Committee did,however, award Mr. Caminos a cash bonus of $25,000, paid in July 2009,based upon his performance in negotiating, managing and closing the Company’sfund raising activities during the year.

 

The Compensation Committee will not make anydetermination with regard to 2010 bonus compensation until June of2010. The Compensation Committee will make 2010 bonus compensationdecisions using the same criteria used to determine compensation in 2008 and2009.

 

*Long-TermIncentive Compensation.*  Our executive officers are eligible to receive awards under theCompany’s 2007 LTIP.  The 2007 LTIP permits the Board of Directors toaward eligible employees and consultants with incentive-based andnon-incentive-based compensation, including incentive stock options, non-statutorystock options, stock appreciation rights, restricted stock grants, stock grantsand performance shares.  Awards toexecutive officers under the Company’s long-term incentive plans have generallyconsisted of restricted stock grants, incentive options or a combinationthereof.  Under the 2007 LTIP, themaximum number of shares of stock of the Company that may be subject toincentives, including without limitation incentive options, is 4,000,000shares, and such shares are reserved at all times until issued.  As of December 31, 2009, there were163,900 shares available to be granted to the Company’s executive officers,employees, consultants and the employees of certain of the Company’s affiliatesunder the 2007 LTIP.

 

In determining the recommendation for the long-termincentive component of our executive officers’ compensation, the CompensationCommittee reviewed the equity compensation of each executive officer incomparison to the market data, and to a greater extent the more refined andcomparable Compensation Peer Group data, provided by the compensationconsultants.  The Compensation Committeethen took into consideration the Company’s current position as an emergingexploration stage company operating in Peru involving higher business riskstypically associated with emerging companies and exploration stage companies,such as uncertain production results and related revenues, and revenue justbeginning to be generated from operations, as compared to the more seasonedrevenue generating companies comprising the Compensation Peer Group.

 

The Compensation Committee therefore adjusted equitycompensation upward from the market and peer data so that executive officertotal compensation might, through successful performance by the Company and itsstock, reflect the relative risks affecting the Company and the executiveofficers.  The equity compensationtargeted a minimum of two years commitment by having the restrictive cliffvesting of two years after issuance.  Also, the equity compensation washeavily weighted toward options which have a three year annual vesting term,rather than restricted stock, to motivate the executive officers to alignmanagement’s goals with growing shareholder value.

 

All equity awards were based upon the CompensationCommittee’s evaluation of management and management’s contribution to executingthe Company’s goals.  In addition, the Compensation Committee consideredthe individual’s total compensation against the compensation of similarlysituated individuals in the Company’s Compensation Peer Group of companies.

 

As a result, additional long-term equity incentives ina combination of restricted stock and stock options were awarded to theexecutive officers in 2008 as follows:

 

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| ** **                                   | ** ** | ** **        | ** ** | **Securities Underlying** | ** ** | **Shares**                | ** ** |
|----------------------------------------------|------------|-------------------|------------|--------------------------------|------------|---------------------------|------------|
| **Name**                                     | ** ** | **Date**          | ** ** | **Options (#)**           | ** ** | **Restricted  Stock (#)** | ** ** |
| Manuel Pablo  Zúñiga-Pflücker |       | January 2008 |       | 500,000                        | (1)        | 150,000                   | (2)        |
|                                         |       | June 2008    |       | 50,000                         | (3)        | —                    |       |
| Edward G.  Caminos                           |       | January 2008 |       | 250,000                        | (1)        | 75,000                    | (2)        |
|                                         |       | June 2008    |       | 25,000                         | (3)        | —                    |       |
| Frederic Briens                              |       | January 2008 |       | 250,000                        | (1)        | 75,000                    | (2)        |
|                                         |       | June 2008    |       | 30,000                         | (3)        | —                    |       |
| Dr. Fernando Zúñiga y Rivero  |       | Janaury 2008      |       | 250,000                        | (1)        | 75,000                    | (2)        |
|                                         |       | June 2008    |       | 35,000                         | (3)        | —                    |       |

 

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(1)  The options were granted at an exerciseprice equal to the closing trading price of the Company’s Common Stock on thedate of approval of the grants, December 20, 2007, by the CompensationCommittee, $11.88 per share. Each of the option awards granted has a term often years and vests in three equal annual installments commencing on the firstanniversary of the grant, January 1, 2008.

 

(2)  The restricted stock awards granted by theCompany to its executive officers vest 100% on the second anniversary of thedate of grant, January 1, 2008, and were valued using the closing tradingprice of the Company’s Common Stock on the date of approval of the grants, December 20,2007, by the Compensation Committee, $11.88 per share.

 

(3)  The options were granted at an exerciseprice equal to the closing trading price of the Company’s Common Stock on thedate of approval of the grants, June 20, 2008, by the CompensationCommittee, $25.53 per share. Each of such options has a term of ten years andvests in three equal annual installments commencing on the first anniversary ofthe grant, July 1, 2008.

 

In determining the recommendation for the long-termincentive component of our executive officers’ compensation for 2009, theCompensation Committee conducted a similar review as in 2008 using the PearlMeyer & Partners report, with similar considerations and evaluation ofmanagement and management’s contributions to executing the Company’sgoals.  Equity awards were based on thevalue of the equity grants on the day of the grant, as a percentage of totalcompensation, in the range of the 25th percentile.

 

As a result, long-term equity incentives in acombination of restricted stock and stock options were awarded to the currentexecutive officers in 2009 as follows:

 
| **Name**                                     | ** ** | **Grant  Date** | ** ** | **Securities  Underlying  Stock Options (#)** | ** ** | **Shares of  Restricted Stock (#)** | ** ** |
|----------------------------------------------|------------|-----------------|------------|-----------------------------------------------|------------|-----------------------------------------------|------------|
| Manuel Pablo  Zúñiga-Pflücker |       | July 2009  |       | 114,750                                       | (1)        | 38,250                                        | (2)        |
| Edward G.  Caminos                           |       | July 2009  |       | 54,550                                        | (1)        | 18,200                                        | (2)        |
| Frederic Briens                              |       | July 2009  |       | 63,600                                        | (1)        | 21,200                                        | (2)        |
| Dr. Fernando Zúñiga y Rivero  |       | July 2009  |       | 71,500                                        | (1)        | 23,850                                        | (2)        |

 

----

(1)  The options were granted at an exerciseprice equal to the closing trading price of the Company’s Common Stock on the dateof approval of the grants, June 26, 2009, by the Compensation Committee,$5.27 per share. Each of the option awards granted has a term of ten years andvests in three equal annual installments commencing on the first anniversary ofthe grant, July 1, 2009.

 

(2)  The restricted stock awards granted by theCompany to its executive officers vest 100% on the second anniversary of thedate of grant, July 1, 2009, and were valued using the closing tradingprice of the Company’s Common Stock on the date of approval of the grants, June 26,2009, by the Board of Directors, $5.27 per share.

 

The Compensation Committee will not make anydetermination with regard to 2010 equity award grants until June of2010. However, the 2010 compensation decisions will use the same criteriaused to determine compensation in 2008 and 2009, and take into account theCompany’s and individual executive’s performance in light of the globalfinancial condition, the slowdown of economic activity, oil and gas prices andthe performance of the Company’s stock price in light of these conditions.

 

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*Perquisites.*  We generally limit the perquisitesthat we make available to our executive officers.  With the exception of Mr. Briens,our Chief Operating Officer, perquisites to executive officers consist only ofclub membership fees, which are related to business purposes.  Theadditional perquisites received by Mr. Briens, identified in the footnotesto the Summary Compensation Table, relate to his overseas assignment.

 

*OtherCompensation.* Executive officers are eligible to participate in all of our employee benefitplans, such as a medical, dental and life insurance plan with 80% of the premiumpaid by the Company, and a 401(k) plan with Company matching contributionsup to 5% of the employee’s salary, in each case on the same basis as otherCompany employees.

 

***CompensationPolicies***

 

*Effectof Accounting and Tax Treatment. *Under the provisions of FASB ASC Topic 718, “StockCompensation”, stock-based compensation cost is measured at the date of grant,based on the calculated fair value of the award, and is recognized as expenseover the employee’s or non-employee’s service period, which is generally thevesting period of the equity grant.  Because the Company offers incentivestock options, non-qualified stock options and restricted stock grants, thedeductibility of a compensation award by the Company may not always occur atthe time the award is otherwise taxable to the employee.

 

Under Section 162(m) of the Tax Code,compensation in excess of $1 million paid to a chief executive officer or toany of the four other most highly compensated officers generally cannot bededucted.  The Compensation Committee hasdetermined the Company’s compensation practices and policies are not currentlyaffected by this limitation.

 

*TimingIssues. *Withthe exception of significant promotions and new hires, we intend to reviewequity compensation awards annually following the availability of the financialresults for the prior year and the Annual Meeting.  This timing enables usto consider prior year performance by the Company and the potential recipientsand our expectations for the current year. Grants to newly hired employees are effective on the latter of theemployee’s first day of employment or upon approval of the grant by the Boardof Directors.  The exercise price of stock options is based upon the grantdate fair market value, which is the market price of our Common Stock on thedate of grant**.**

 

*StockOwnership Guidelines. *The Board has not adopted specific stock ownershipguidelines for executive officers.  Under the terms of the 2007 LTIP,however, in any given year, no individual may receive incentives covering morethan 20% of the aggregate number of shares which may be issued pursuant to the2007 LTIP.  Except as may otherwise bepermitted by the Tax Code, the amount of options granted to an individual duringone calendar year that may qualify as incentive stock options is limited, suchthat at the time the incentive options are granted, the fair market value(based on the closing sale price for a share of Common Stock on the establishedstock exchange on which the stock is listed on the applicable date, and ifshares are not traded on such day, on the next preceding trading date) of thestock covered by incentive options first exercisable by such individual in anycalendar year may not, in the aggregate, exceed $100,000.  Any options granted over such amount will betreated as non-qualified stock options for tax purposes.  The maximum performance-based incentivepayment to any one individual during one performance period is 20% of theaggregate number of shares that may be issued pursuant to the 2007 LTIP, or ifpaid in cash, that number of shares multiplied by the fair market value of thestock as of the date the incentive is granted.

 

*Basisfor Allocation between LTIP Incentives. *Our 2007 LTIP expressly provides for incentives to begranted to 2007 LTIP participants in the form of any one or a combination of (a) incentiveoptions (or other statutory stock options); (b) non-statutory stockoptions; (c) stock appreciation rights; (d) restricted stock grants; (e) performanceshares; (f) stock grants; and (g) other stock-based incentives. Given the recent change in the accounting treatment for stock options changedas a result of SFAS 123R, we have concluded that granting shares of restrictedstock to employees, particularly members of senior management, would provide anequally motivating form of incentive compensation while permitting us to issuefewer shares, thereby reducing potential dilution.

 

*Exerciseof Discretion*. Pursuant to the 2007 LTIP, the Compensation Committee retains limited discretionin connection with the payment of performance based compensation in cases wherethe defined performance goals have not been met.  The CompensationCommittee also retains discretion to accelerate the vesting of unvestedincentives upon an individual’s termination of employment with theCompany.  The Compensation Committee exercised this discretion in 2009with respect to Mr. Miller’s awards.

 

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*Adjustmentor Recovery of Awards upon Restatement of Company Performance*.  The Company does not have aformal policy with respect to whether executive officers are required to returncash and equity incentive awards if the relevant performance targets upon whichthe awards are based are ever restated or otherwise adjusted in a manner thatwould reduce the size of an award or payment.  Under the 2007 LTIP,however, in determining the actual size of an performance-based incentives, theCompensation Committee may reduce or eliminate the amount of theperformance-based incentives earned over the relevant period, if, in its soleand absolute discretion, such reduction or elimination is appropriate.

 

**CompensationCommittee Report**

 

The Compensation Committee has reviewed and discussedthe Compensation Discussion and Analysis included in this Amendment No. 1to the Annual Report on Form 10-K/A with management.  Based on the Compensation Committee’s reviewof and discussions with management with respect to the Compensation Discussionand Analysis, the Compensation Committee has recommended to the Board ofDirectors that the Compensation Discussion and Analysis be included in thisAmendment No. 1 to the Annual Report on Form 10-K/A.

 

Submittedby theCompensationCommittee of the Board of Directors.

 

*Dennis G. Strauch —Chairman of the Compensation Committee**Gordon GrayJames B. Taylor*

 

**Summary Compensation Table**

 

The following table sets forth the compensation forservices in all capacities to the Company for the fiscal year ended December 31,2009 of the Company’s “named executive officers.”  The “namedexecutive officers” include our principal executive officer, principalfinancial officer, and the two most highly compensated persons serving asexecutive officers at the end of fiscal year 2009 or who served as an executiveofficer during fiscal year 2009.

 
| **Name and Principal Position**     | ** ** | **Year** | ** ** | **Salary** | ** ** | **Bonus** | ** ** | **Stock  Awards(2) (3)** | ** ** | **Option  Awards(2) (3)** | ** ** | **All Other  Compensation  (4)** | ** ** | **Total** | ** ** |
|----------------------------------------------------|------------|----------|------------|------------|------------|-----------|------------|-------------------------------|------------|--------------------------------|------------|---------------------------------------|------------|-----------|------------|
|                                               |       |     |       |       |       |      |       |                          |       |                           |       |                                  |       |      |       |
| Manuel Pablo  Zúñiga-Pflücker       |       | 2009     |       | $          | 316,200    |      | $          | —                        |       | $                              | 201,600    |                                  | $          | 416,500   |       | $ | 18,300 |   | $ | 952,600 |   |
| *President,  Chief Executive Officer and Director* |       | 2008     |       | 329,800    |       | 400,000   |       | 1,782,000                     |       | 5,056,500                      |       | 17,600                                |       | 7,585,900 |       |
|                                               |       | 2007     |       | 179,900    |       | —    |       | —                        |       | —                         |       | 2,900                                 |       | 182,800   |       |
|                                               |       |     |       |       |       |      |       |                          |       |                           |       |                                  |       |      |       |
| Edward G. Caminos  (1)                             |       | 2009     |       | 227,500    |       | 25,000    |       | 95,900                        |       | 198,000                        |       | 12,700                                |       | 559,100   |       |
| *Chief  Financial Officer*                         |       | 2008     |       | 221,700    |       | 155,000   |       | 891,000                       |       | 2,528,300                      |       | 14,500                                |       | 3,810,500 |       |
|                                               |       | 2007     |       | 148,900    |       | —    |       | —                        |       | —                         |       | 2,400                                 |       | 151,300   |       |
|                                               |       |     |       |       |       |      |       |                          |       |                           |       |                                  |       |      |       |
| Frederic Briens                                    |       | 2009     |       | 320,500    |       | —    |       | 111,700                       |       | 230,900                        |       | 114,300                               |       | 777,400   |       |
| *Chief  Operating Officer*                         |       | 2008     |       | 235,000    |       | 200,000   |       | 891,000                       |       | 2,609,400                      |       | 97,800                                |       | 4,033,200 |       |
|                                               |       | 2007     |       | 120,000    |       | —    |       | —                        |       | —                         |       | 162,800                               |       | 282,800   |       |
|                                               |       |     |       |       |       |      |       |                          |       |                           |       |                                  |       |      |       |
| Dr. Fernando Zúñiga y Rivero        |       | 2009     |       | —     |       | —    |       | 125,700                       |       | 259,500                        |       | 34,300                                |       | 419,500   |       |
| *Director  and Chairman of the Board*              |       | 2008     |       | 239,500    |       | 280,000   |       | 891,000                       |       | 2,690,600                      |       | 12,800                                |       | 4,113,900 |       |
|                                               |       | 2007     |       | 139,500    |       | —    |       | —                        |       | —                         |       | 1,500                                 |       | 141,000   |       |
|                                                    |            |          |            |            |            |           |            |                               |            |                                |            |                                       |            |           |            |  |  |  |  |  |  |

 

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(1)                                 Mr. Caminos was appointed ChiefFinancial Officer of the Company effective May 24, 2007.  Mr. Caminos served as VicePresident-Finance and Chief Accounting Officer of the Company from October 30,2006 until May 24, 2007, as well as interim Chief Financial Officer since June 15,2006.  Prior to June 15, 2006, Mr. Caminosserved as Corporate Controller of the Company since January 2005.

 

(2)                                 All stock awards and options reportedunder these columns were issued under the 2005 Long-Term Incentive CompensationPlan or the 2007 LTIP.

 

(3)                                 Theamounts reflect the aggregate grant date fair value of the awards granted in2009, 2008 and 2007, respectively, calculated inaccordance with FASB ASC Topic 718, “Stock Compensation”.  The discussion of the assumptions used incalculating these values can be found in Notes 1 and 10 to the Company’sconsolidated financial statements 

 

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included in the Annual Report on Form 10-K for theyears ended December 31, 2009, 2008 and 2007, respectively, filed with theSEC.

 

(4)                                 The amounts for 2009 include:

 

(a)                                  Club membership dues for 2009, on behalfof Mr. Zúñiga-Pflücker — $1,779; Mr. Caminos — $1,585; and Dr. Zúñigay Rivero — $1,584.

 

(b)                                 The Company’s matching contributions for2009 under the Company’s 401(k) and Retirement Savings Plan, a definedcontribution plan, on behalf of Mr. Zúñiga-Pflücker — $16,500; and Mr. Caminos— $11,100;  and Mr. Briens — $9,792.

 

(c)                                  For Mr. Briens, the 2009 amount includesadditional compensation under the Company’s expatriate package while working inPeru, which includes housing rent, maintenance and utilities of approximately$72,557; school allowance of approximately $8,442; car allowance ofapproximately $2,481; and insurance benefits and other expenses paid on Mr. Briens’behalf of approximately $20,983.

 

(d)                                 For Dr. Fernando Zúñigay Rivero, the 2009other compensation includes $32,000 received for services rendered to theCompany in his capacity as Chairman of the Board of Directors.

 

**2009 Grants of Plan-Based Awards**

 

The following table sets forth certain informationwith respect to each grant of an award made to a named executive officer in2009 under our plans.

 
| ** **                                   | ** ** | **Grant** | ** ** | **Board  Approval** | ** ** | **Estimated Future Payouts Under  Equity Incentive Plan Awards** | ** ** | **All  Other  Stock  Awards:  Number  of  Shares of  Stock or** | ** ** | **All  Other  Option  Awards:  Number of  Securities  Under-  lying** | ** ** | **Exercise  or Base  Price of  Option** | ** ** | **Grant  Date  Fair Value of  Stock and  Option** | ** ** |
|----------------------------------------------|------------|-----------|------------|---------------------|------------|------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|-----------------------------------------|------------|---------------------------------------------------|------------|
| **Name**                                     | ** ** | **Date**  | ** ** | **Date (1)**   | ** ** | **Threshold**                                                                                  | ** ** | **Target**                                                      | ** ** | **Maximum**                                                           | ** ** | **Units(2)**                            | ** ** | **Options(3)**                                    | ** ** | **Awards(4)** | ** ** | **Awards (5)** | ** ** |
| Manuel Pablo  Zúñiga-Pflücker |       | 7/1/2009  |       | 6/26/2009           |       | $                                                                                              | —     |                                                            | $          | —                                                                |       | $                                       | —     |                                              | —     |   | 114,750 |   | $ | 5.27 |   | $ | 416,543 |   |
|                                         |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | 38,250                                  |       | —                                            |       | — |   | 201,578 |   |
|                                         |       |      |       |                |       |                                                                                           |       |                                                            |       |                                                                  |       |                                    |       |                                              |       |   |   |   |   |
| Edward G. Caminos                            |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | —                                  |       | 54,550                                            |       | 5.27 |   | 198,017 |   |
|                                         |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | 18,200                                  |       | —                                            |       | — |   | 95,914 |   |
|                                         |       |      |       |                |       |                                                                                           |       |                                                            |       |                                                                  |       |                                    |       |                                              |       |   |   |   |   |
| Frederic Briens                              |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | —                                  |       | 63,600                                            |       | 5.27 |   | 230,868 |   |
|                                         |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | 21,200                                  |       | —                                            |       | — |   | 111,724 |   |
|                                         |       |      |       |                |       |                                                                                           |       |                                                            |       |                                                                  |       |                                    |       |                                              |       |   |   |   |   |
| Dr. Fernando Zúñiga y Rivero  |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | —                                  |       | 71,500                                            |       | 5.27 |   | 259,545 |   |
|                                         |       | 7/1/2009  |       | 6/26/2009           |       | —                                                                                         |       | —                                                          |       | —                                                                |       | 23,850                                  |       | —                                            |       | — |   | 125,690 |   |
|                                              |            |           |            |                     |            |                                                                                                |            |                                                                 |            |                                                                       |            |                                         |            |                                                   |            |  |  |  |  |  |  |  |  |  |

 

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| (1)    |   | Dates in this column reflect the date of the Board  approval of the awards if different from the effective date of grant.                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    |   | All stock awards granted to the named executive  officers for 2009 vest at the second anniversary following the grant date.  All stock awards values are based on the closing market price on the date of  Board approval of the grant.                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (3)    |   | All stock option awards granted to the named  individuals for 2009 vest in equal annual installments over three years  following the grant date.                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)    |   | The exercise price is the closing price of the  Company’s Common Stock on the date of Board approval of the grant.                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (5)    |   | The fair value of BPZ’s stock options is computed  using the Black-Scholes valuation model.  The fair value of BPZ’s stock  awards is calculated in accordance with FASB ASC Topic 718, “Stock Compensation”  and is, in part, based on the market price of BPZ Common Stock on the date of  the Board approval of the grant. The grant date fair value of the stock  options granted on June 26, 2009 was $3.63 per share, respectively. The  discussion of the |

 

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|   |   | assumptions used in calculating these values can be  found in Notes 1 and 10 to the Company’s consolidated financial statements  included in the Annual Report on Form 10-K for the year ended  December 31, 2009 filed with the SEC. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Outstanding Equity Awards At Fiscal Year-End**

 

The following table setsforth information regarding unexercised options, stock that has not vested andequity incentive plan awards for each named executive officer outstanding as ofDecember 31, 2009.

 
| ** **                                    | ** ** | **Option Awards**                                                           | ** ** | **Stock Awards**                                                              | ** ** |
|-----------------------------------------------|------------|----------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|------------|
| **Name**                                      | ** ** | **Number of  Securities  Underlying  Unexercised  Options(#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options(#)  Unexercisable** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options(#)** | ** ** | **Option  Exercise  Price($)(1)** | ** ** | **Option  Expiration  Date** | ** ** | **Number of  Shares or  Units of  Stock That  Have Not  Vested(#)** | ** ** | **Market  Value of  Shares or  Units of  Stock That  Have Not  Vested($)(2)** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Unearned  Shares, Units  or Other  Rights That  Have Not  Vested(#)** | ** ** | **Equity  Incentive  Plan  Awards:  Market or  Payout Value  of Unearned  Shares, Units  or Other  Rights That  Have Not  Vested ($)** | ** ** |
|                                          |       |                                                                             |       |                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Manuel Pablo  Zúñiga- Pflücker |       | 166,666                                                                          |       | 333,334                                                                            |       | — |   | 11.88 |   | 12/20/2017 | (4) | 150,000 |   | 1,425,000 | (7) | — |   | — |   |
|                                          |       | 16,667                                                                           |       | 33,333                                                                             |       | — |   | 25.53 |   | 6/20/2018 | (5) | 38,250 |   | 363,375 | (8) | — |   | — |   |
|                                          |       | —                                                                           |       | 114,750                                                                            |       | — |   | 5.27 |   | 7/1/2019 | (6) | — |   | — |   | — |   | — |   |
|                                          |       |                                                                             |       |                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Edward G. Caminos                             |       | 100,000                                                                          |       | —                                                                             |       | — |   | 3.20 |   | 4/14/2016 | (3) | 75,000 |   | 712,500 | (7) | — |   | — |   |
|                                          |       | 83,333                                                                           |       | 166,667                                                                            |       | — |   | 11.88 |   | 12/20/2017 | (4) | 18,200 |   | 172,900 | (8) | — |   | — |   |
|                                          |       | 8,334                                                                            |       | 16,666                                                                             |       | — |   | 25.53 |   | 6/20/2018 | (5) | — |   | — |   | — |   | — |   |
|                                          |       | —                                                                           |       | 54,500                                                                             |       | — |   | 5.27 |   | 7/1/2019 | (6) | — |   | — |   | — |   | — |   |
|                                          |       |                                                                             |       |                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Frederic Briens                               |       | 83,333                                                                           |       | 166,667                                                                            |       | — |   | 11.88 |   | 12/20/2017 | (4) | 75,000 |   | 712,500 | (7) | — |   | — |   |
|                                          |       | 10,000                                                                           |       | 20,000                                                                             |       | — |   | 25.53 |   | 6/20/2018 | (5) | 21,200 |   | 201,400 | (8) | — |   | — |   |
|                                          |       | —                                                                           |       | 63,600                                                                             |       | — |   | 5.27 |   | 7/1/2019 | (6) | — |   | — |   | — |   | — |   |
|                                          |       |                                                                             |       |                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dr. Fernando Zúñiga y Rivero   |       | 83,333                                                                           |       | 166,667                                                                            |       | — |   | 11.88 |   | 12/20/2017 | (4) | 75,000 |   | 712,500 | (7) | — |   | — |   |
|                                          |       | 11,667                                                                           |       | 23,333                                                                             |       | — |   | 25.53 |   | 6/20/2018 | (5) | 23,850 |   | 226,575 | (8) | — |   | — |   |
|                                          |       | —                                                                           |       | 71,500                                                                             |       | — |   | 5.27 |   | 7/1/2019 | (6) | — |   | — |   | — |   | — |   |

 

----

| (1)    |   | Option exercise price is the closing price of BPZ  Common Stock on the date of Board approval of the grant.                                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                       |
| (2)    |   | The market or payout value is computed using the  closing price of $9.50 of BPZ Common Stock at December 31, 2009.                    |
|   |   |                                                                                                                                       |
| (3)    |   | Options vest in two equal annual installments  beginning on the first anniversary of the date of grant, April 14, 2006.               |
|   |   |                                                                                                                                       |
| (4)    |   | Options vest in three equal annual installments  beginning on the first anniversary of the effective date of grant,  January 1, 2008. |
|   |   |                                                                                                                                       |
| (5)    |   | Options vest in three equal annual installments  beginning on the first anniversary of the effective date of grant,  July 1, 2008.    |
|   |   |                                                                                                                                       |
| (6)    |   | Options vest in three equal annual installments  beginning on the first anniversary of the effective date of grant,  July 1, 2009.    |
|   |   |                                                                                                                                       |
| (7)    |   | Restricted stock award vests on the second  anniversary of the effective date of grant, January 1, 2008.                              |
|   |   |                                                                                                                                       |
| (8)    |   | Restricted stock award vests on the second  anniversary of the effective date of grant, July 1, 2009.                                 |

 

**OptionExercises and Stock Vested**

 

There were no exercisesof stock options by or vesting of restricted stock for our named executiveofficers in 2009.

 

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**EmploymentAgreements, Termination of Employment and Change in Control Arrangements**

 

We have no employment agreements with any of our currentexecutive officers.  At December 31,2009, our named executive officers received the following base salaries: Dr. Zúñiga yRivero - $1; Mr. Pablo Zúñiga-Pflücker —$360,000; Mr. Briens — $250,000 and Mr. Caminos - $240,000.  Each of our named executive officers iseligible for cash bonus compensation at the discretion of the Board ofDirectors, but there is no formal plan covering such bonuses. For 2010 salaryadjustments and equity awards, the Compensation Committee will not make anydetermination with regard to 2010 compensation adjustments until June of2010. However, the Compensation Committee will use the same criteria for2010 compensation decisions that were used to determine compensation in 2008and 2009.

 

Under the Company’s 2007LTIP, in the event of a change of control of the Company (as defined in thatplan), all outstanding options, stock appreciation rights and restricted stockbecome exercisable, realizable or vested in full, or shall be free of allconditions or restrictions, as applicable to each award.  The plan defines a “change of control” togenerally include:  (i) any mergeror consolidation whereby the outstanding stock of the Company prior to thetransaction constitutes less than 50% of the voting power in the resultingentity; (ii) an acquisition of beneficial ownership by a person if, afterthe acquisition, the person beneficially owns 51% or more of the outstandingstock of the Company or the voting power of the Company (this does not includeany acquisition directly from or by the Company, through an employee benefitplan sponsored by the Company, or that results in beneficial owners ofoutstanding Company stock prior to the acquisition by another corporationbeneficially owning more than 50% of the then-outstanding shares of thecorporation in the same proportion as their previous ownership of Companystock); (iii) any sale of all or substantially all of the Company’sassets; or (iv) the complete liquidation of the Company.  In addition, in the event of a change ofcontrol, all performance shares or other performance-based awards shall beimmediately payable based upon the extent, as determined by the CompensationCommittee, to which the performance goals for the performance period then inprogress have been made, up through the date of the change in control or basedon 100% of the value on the date of grant of the performance shares or otherperformance-based award, if such amount is higher.

 

Under the 2007 LTIP, uponthe termination of an executive officer by the Company without cause (as thatterm is defined in the Plan), regardless of whether the reason for thetermination is voluntary, involuntary, due to retirement, extended absencecaused by disability or death, (i) all unvested options, stockappreciation rights and restricted stock of the executive officer shall lapse,become automatically cancelled or terminated and be immediately returned to theCompany; and (ii) any vested but unexercised options or stock appreciationrights shall expire upon the earlier of (a) 90 days after the date of suchofficer’s termination or (b) the expiration of such option or stockappreciation right.  The CompensationCommittee may provide otherwise in an award agreement, or exercise itsdiscretion to accelerate the vesting of awards due to a termination.

 

The following table setsforth the potential payments that our named executive officers would receiveupon a change in control of the Company under the 2007 LTIP.  The amounts appearing in the table belowassume that the triggering event occurred as of December 31, 2009.

 
| ** **                                   | ** ** | **Accelerated  Options  Vesting (1)** | ** ** | **Accelerated  Stock  Vesting (2)** | ** ** |
|----------------------------------------------|------------|--------------------------------------------|------------|-------------------------------------|------------|
| **Name**                                     | ** ** | **($)**                                    | ** ** | **($)**                             | ** ** |
| Manuel Pablo  Zúñiga-Pflücker |       | 485,400                                    |       | 1,788,400                           |       |
|                                         |       |                                       |       |                                |       |
| Frederic Briens                              |       | 269,000                                    |       | 913,900                             |       |
|                                         |       |                                       |       |                                |       |
| Edward G.  Caminos                           |       | 230,700                                    |       | 712,500                             |       |
|                                         |       |                                       |       |                                |       |
| Dr. Fernando Zúñiga y Rivero  |       | 302,400                                    |       | 885,400                             |       |

 

----

| (1)    |   | Includes options whose exercise price is less than  the closing price per share of the Company’s Common Stock on the NYSE on  December 31, 2009 of $9.50. The value included is the total intrinsic  value of stock options (defined as the amount by which the market price of  the Common Stock on December 31, 2009 exceeds the exercise price of the  stock option). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                    |
| (2)    |   | Based upon the difference between the closing price  per share of the Company’s Common Stock on the NYSE on December 31, 2009  of $9.50 multiplied by the number of shares of restricted stock that would  vest upon occurrence of a change of control on December 31, 2009.                                                                                             |

 

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***2009 Non-Employee Director Compensation***

 

The Board of Directorsdetermines the allowances for service as a director and the fees for attendanceat meetings of the Board or any Committee appointed by the Board.  The Compensation Committee generally reviewsand monitors compensation for directors and makes a recommendation to the Boardregarding the form and amount of Directors’ compensation.  Non-employee directors receive a combinationof cash and stock-based compensation designed to attract and retain qualifiedcandidates to serve on the Board.

 

In setting directorcompensation, the Board considered the Compensation Committee’srecommendations, which took into consideration the special characteristics ofthe Company in comparison to its peer group and in light of market data asreported by Pearl Meyer & Partners in November 2007.  These factors included the Company’s positionin the exploration stage of its license contracts operating in Peru and theneed to provide a balanced compensation package to secure the necessaryexpertise required for the Board of Directors of such a company.

 

*Retainerand Meeting Fees*.  The following is a schedule of annualretainers and meeting fees for non-employee directors that were in effect for2009:

 

| **Type  of Fee**                                                                                                 | ** ** | **Amount** | ** ** | **Period  Covered** | ** **  |
|------------------------------------------------------------------------------------------------------------------|------------|------------|------------|---------------------|-------------|
|                                                                                                             |       |       |       | ** **          |        |
| Board Retainer                                                                                                   |       | $          | 12,750     |                | Annual      |   |
| Additional Retainer to Chairman of Audit Committee                                                               |       | $          | 6,500      |                | Annual      |   |
| Additional Retainer to Chairman of Compensation  Committee                                                       |       | $          | 4,250      |                | Annual      |   |
| Additional Retainer to Chairman of Nominating and  Corporate Governance Committee                                |       | $          | 2,750      |                | Annual      |   |
| Fee for each Board Meeting Attended (plus  reimbursement for reasonable expenses incurred in attending meetings) |       | $          | 1,000      |                | Per meeting |   |

 

*Directors Compensation Incentive Plan*

 

Non-employee Directors ofthe Board are also eligible to receive options, stock appreciation rights,restricted stock, restricted stock units, performance awards, other stock-basedawards and cash-based awards under the DCIP. The aggregate number of shares ofCommon Stock authorized for grant under the DCIP is 2.5 million. TheCompany normally issues new shares of its Common Stock in satisfaction of theseawards. As of December 31, 2009, 1,375,000 shares remain available forfuture grants under the DCIP.

 

Equity grants tonon-employee directors are typically awarded each year on the date of theCompany’s Annual Meeting.  In June 2009,at the annual board meeting following the 2009 Annual Meeting of Shareholders,the Board approved a grant of options to purchase 50,000 shares of CommonStock, vesting in equal annual installments over two years from the date ofgrant, to Messrs. Gray, Lendrum, and Strauch as compensation for theperiod of service from the 2008 Annual Meeting until the 2009 Annual Meetingand to encourage continued service on the Board.

 

*Non-Employee Director Compensation*

 

The following table setsforth the compensation of the Company’s non-employee directors during fiscalyear 2009.

 

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| ** **                     | ** ** | **Fees**       | ** ** | ** **       | ** ** | ** **       | ** ** | ** **          | ** ** | ** **   | ** ** |
|--------------------------------|------------|----------------|------------|------------------|------------|------------------|------------|---------------------|------------|--------------|------------|
| ** **                     | ** ** | **Earned  or** | ** ** | **Stock**        | ** ** | **Option**       | ** ** | ** **          | ** ** | ** **   | ** ** |
| ** **                     | ** ** | **Paid in**    | ** ** | **Awards($)**    | ** ** | **Awards($)**    | ** ** | **All  Other**      | ** ** | ** **   | ** ** |
| **Name**                       | ** ** | **Cash($)**    | ** ** | **(1) (2)** | ** ** | **(1) (3)** | ** ** | **Compensation($)** | ** ** | **Total($)** | ** ** |
|                           |       |           |       |             |       |             |       |                |       |         |       |
| Gordon Gray                    |       | 30,500         |       | —           |       | 181,500          |       | —              |       | 212,000      |       |
|                           |       |           |       |             |       |             |       |                |       |         |       |
| John J. Lendrum, III      |       | 34,250         |       | —           |       | 181,500          |       | —              |       | 215,750      |       |
|                           |       |           |       |             |       |             |       |                |       |         |       |
| Dennis G. Strauch              |       | 32,000         |       | —           |       | 181,500          |       | —              |       | 213,500      |       |
|                           |       |           |       |             |       |             |       |                |       |         |       |
| E. Barger Miller, III (4) |       | 6,000          |       | —           |       | —           |       | 502,000             |       | 508,000      |       |

 

----

(1)                                 Theamounts reflect the aggregate grant date fair value of the awards made tonon-employee directors in 2009 calculated in accordance with FASB ASC Topic718.  The discussion of the assumptionsused in calculating these values can be found in Notes 1 and 10 to the Company’sconsolidated financial statements included in the Annual Report on Form 10-Kfor the year ended December 31, 2009 filed with the SEC.

 

(2)                                 TheCompany did not grant any restricted stock awards to non-employee directors forservice as directors in 2009.  As of December 31,2009, each non-employee director had the following aggregate number of unvestedshares of restricted stock accumulated for all years of service:  Gordon Gray — 75,000 shares unvested, John J.Lendrum, III —75,000 shares unvested, Dennis G. Strauch — 75,000 sharesunvested and E. Barger Miller, III — 0 shares unvested.

 

(3)                                 Thegrant date fair value per option computed using the Black-Scholesoption-pricing model was $3.63 for option awards granted to non-employeedirectors in fiscal year 2009.  As of December 31,2009, each non-employee director had the following aggregate number ofoutstanding unexercised stock options accumulated for all years ofservice:  Gordon Gray — 100,000 shares,John J. Lendrum, III — 475,000 shares, Dennis G. Strauch — 187,000 sharesand E. Barger Miller, III — 425,000 shares.

 

(4)                                 Mr. Millerresigned from his position on the Board of Directors effective April 24,2009. Subsequent to Mr. Miller’s resignation, the Company and Mr. Millerentered into a separation agreement where the Company agreed to pay Mr. Miller$30,000 each year for the next two years and award Mr. Miller 100,000stock options in order to retain Mr. Miller as a consultant to theCompany.  25,000 of the option awardvests on May 7, 2010, 50,000 options vest on May 7, 2011 and 25,000options vest on May 7, 2012.  Thefair value of the option award was valued using the Black-Scholesoption-pricing model and the entire award was expensed on the date ofgrant.  Both the $60,000 cash awards andthe $442,000 option award is included in “All Other Compensation” above as theamount does not relate to Mr. Miller’s services as a member of the Boardof Directors.

 

**CompensationRisk Assessment**

 

We do not believe thatour current employee compensation policies and practices create risks that arereasonably likely to have a material adverse effect on us.  Our currentemployee compensation consists of base salary, a discretionary cash bonus basedupon individual and company performance, equity awards under our 2007 LTIP;health benefits; limited perquisites; and participation in our 401(k) plan. We believe our compensation program, that allocates compensation among basesalary and short and long-term compensation target opportunities, does notencourage our executives or non-executive employees to take excessive risks. Restricted stock awards typically vest over a period of two years, and stockoption awards typically vest over a period of three years.  We believe thetime-based vesting over a multi-year period for our long-term incentive awardshelps ensure that both employees and executives take actions and make decisionswhich contribute to long-term sustainable performance, and aligns theirinterests with those of our shareholders for the long-term performance of ourcompany.  Compensation of our executives is described above under “ExecutiveCompensation - Compensation Discussion and Analysis.”

 

**CompensationCommittee Interlocks and Insider Participation in Compensation Decisions**

 

Messrs. Strauch,Gray and Taylor serve on the Compensation Committee of our Board, all of whomare “independent” under the standards of the NYSE.  None of the members ofthe Compensation Committee was at any time during the last fiscal year anofficer or employee of the Company.  None of our executive officers servesas a member of the 

 

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board of directorsor compensation committee of any other entity that has one or more executiveofficers serving as a member of our Board of Directors or CompensationCommittee.

 
| **ITEM 12**. | ** ** | **SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  MATTERS** |
|--------------|------------|------------------------------------------------------------------------------------------------------|

 

**Security Ownership of Certain Beneficial Owners and Management**

 

The following table sets forth information as of April 28,2010, except as otherwise set forth below, concerning the beneficial ownershipof the Company’sCommon Stock by each person who beneficially owns more than five percent (5%)of the Common Stock, its affiliates, and by each of the Company’sexecutive officers and directors, and by all executive officers and directorsas a group.

 
| **Name and Address of Beneficial Owner(1)**                          | ** ** | **Number of  Shares of  Common Stock  Beneficially  Owned** | ** ** | **Percent of  Beneficial  Ownership  (2)** | ** ** |
|-----------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|-------------------------------------------------|------------|
| Gordon Gray (3)                                                                               |       | 5,694,173                                                                  |       | 4.9                                             | %          |
| Manuel Pablo  Zúñiga-Pflücker (4)                                              |       | 4,997,716                                                                  |       | 4.3                                             | %          |
| Fernando Zúñiga  y Rivero (5)                                                       |       | 4,822,323                                                                  |       | 4.2                                             | %          |
| Frederic Briens  (6)                                                                          |       | 790,628                                                                    |       | 0.7                                             | %          |
| Edward G.  Caminos (7)                                                                        |       | 475,000                                                                    |       | 0.4                                             | %          |
| Dennis G.  Strauch (8)                                                                        |       | 500,000                                                                    |       | 0.4                                             | %          |
| John J. Lendrum, III  (9)                                                                |       | 500,000                                                                    |       | 0.4                                             | %          |
| Stephen C.  Beasley                                                                           |       | 15,000                                                                     |       | 0.0                                             | %          |
| James B. Taylor                                                                               |       | —                                                                     |       | 0.0                                             | %          |
|                                                                                          |       |                                                                       |       |                                            |       |
| All directors  and executive officers as a group (nine persons)                               |       | 17,794,840                                                                 |       | 15.4                                            | %          |
|                                                                                          |       |                                                                       |       |                                            |       |
| International  Finance Corporation (10)  2121 Pennsylvania Avenue, N.W.  Washington, DC 20433 |       | 11,253,295                                                                 |       | 9.7                                             | %          |
|                                                                                          |       |                                                                       |       |                                            |       |
| Centennial  Energy Partners L.L.C. (11)  575 Lexington Avenue, 33rd floor  New York, NY 10022 |       | 10,246,877                                                                 |       | 8.8                                             | %          |
|                                                                                          |       |                                                                       |       |                                            |       |
| SPO Advisory  Corp. (12)  591 Redwood Highway, Suite 3215  Mill Valley, California 94941 |       | 10,634,213                                                                 |       | 9.2                                             | %          |
|                                                                                          |       |                                                                       |       |                                            |       |
| Soros Fund  Management, LLC (13)  888 Seventh Avenue, 33rd Floor  New York, New York 10106    |       | 10,173,175                                                                 |       | 8.8                                             | %          |

 

----

| (1)    |   | Except as indicated herein, the business address for  each beneficial owner is 580 Westlake Park Blvd, Suite 525, Houston,  Texas 77079.                                                                                                                                                                                                                                                  |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    |   | The calculations of percentage beneficial ownership  are based on 115,223,926 shares issued as of April 28, 2010, plus any  potentially dilutive securities for each person or group.                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (3)    |   | The shares reflected above as beneficially owned by  Mr. Gray consist of 5,619,173 shares that he beneficially owns and  controls through his sole ownership of Allied Crude Purchasing, Inc.  Mr. Gray, through Allied Crude Purchasing, Inc. has pledged  1,500,000 shares of Common Stock to Snyder National Bank, for the purpose of  providing collateral for a loan. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)    |   | Mr. Zúñiga-Pflücker has pledged 625,240 shares  of Common Stock to Goldman Sachs & Co., for the purpose of                                                                                                                                                                                                                                                        |

 

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|   |   | providing collateral for a loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)    |   | The number of shares reflected above as beneficially  owned by Dr. Zúñiga y Rivero includes 942,006 shares, 195,107 shares,  1,191,917 shares and 140,902 shares held in grantor retained annuity trusts,  but does not include 81,563 shares held of record by his wife, Blanca  Pflücker de Zúñiga, as Dr. Zúñiga y Rivero disclaims beneficial  ownership of these shares. Dr. Zúñiga y Rivero has pledged 734,477  shares to Raymond James & Associates for the purpose of providing  collateral for a loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (6)    |   | Mr. Briens has pledged 150,000 shares of Common  Stock to Goldman Sachs & Co., the purpose of providing collateral  for a loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (7)    |   | The shares reflected above include options to  purchase 100,000 shares of Common Stock. Mr. Caminos has pledged 375,000  shares to Raymond James & Associates for the purpose of providing  collateral for a loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (8)    |   | Includes options to purchase 87,000 shares of Common  Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (9)    |   | Includes options to purchase 375,000 shares of  Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (10)   |   | All information in the table with respect to International  Finance Corporation (“IFC”) is based on the Schedule 13G/A filed by IFC with the  SEC on February 4, 2010 and information provided to the Company by IFC.  Based upon information provided to the Company by IFC, Somit Varma - Director  of IFC, Oil, Gas, Mining and Chemicals Department, has voting power and  investment power over the shares of Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (11)   |   | All information in the table with respect to  Centennial Energy Partners L.L.C. is based on the Schedule 13G/A filed by  Centennial Energy Partners L.L.C. with the SEC on February 12, 2010 and  information provided to the Company by Centennial Energy Partners L.L.C.  Centennial Energy Partners L.L.C., as General Partner, and Peter K. Seldin,  as managing member, have voting power and investment power over the  shares of Common Stock. Centennial Energy Partners, L.L.C. and Peter K. Seldin  may be deemed to share beneficial ownership over the shares of Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (12)   |   | All information with respect to SPO Advisory Corp.  and its affiliates and related investment funds is based on the Schedule 13G  filed with the SEC on July 6, 2009 by the following (collectively, the  “SPO Reporting Persons”): SPO Partners II, L.P. (“SPO Partners”), SPO  Advisory Partners, L.P. (“SPO Advisory Partners”), San Francisco Partners,  L.P. (“SFP”), SF Advisory Partners, L.P. (“SF Advisory Partners”), SPO  Advisory Corp., John H. Scully, William Oberndorf, William J. Patterson, and  Edward H. McDermott. The Schedule 13G states that the SPO Reporting Persons  may be deemed to constitute a “group” within the meaning of  Section 13(d)(3) of the Securities Exchange Act of 1934, as  amended, although neither the fact of such filing nor anything contained  therein shall be deemed to be an admission by the SPO Reporting Persons that  a group exists.

 

The Schedule 13G provides, among other things, the  following information regarding beneficial ownership of Common Stock by the  SPO Reporting Persons:

 

·  SPO Partners beneficially owns  10,280,113 shares. Acting through its sole general partner, SPO Advisory  Partners, SPO Partners has sole voting and investment power over all such  shares.

 

·  Because of its position as the sole  general partner of SPO Partners, SPO Advisory Partners may be deemed to  indirectly beneficially own 10,280,113 shares. Acting through its general  partner, SPO Advisory Corp., and in its capacity as the sole general partner  of SPO Partners, SPO Advisory Partners has the sole voting and investment  power over all such shares. 

 

·  SFP beneficially owns 354,100 shares.  Acting through its sole general partner, SF Advisory Partners, SFP has sole  voting and investment power over all such shares.

 

·  Because of its position as the sole  general partner of SFP, SF Advisory Partners may be deemed to indirectly  beneficially own 354,100 shares. Acting through its general partner, SPO  Advisory Corp., and in its capacity as the sole general partner of SFP, SF  Advisory Partners has the sole voting and investment power over all such  shares. |

 

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|   |   | ·  Because of its positions as the general  partner of each of SPO Advisory Partners and SF Advisory Partners, SPO  Advisory Corp. may be deemed to beneficially own 10,634,213 shares. Acting  through its controlling persons and in its capacity as general partner of  each of SPO Advisory Partners and SF Advisory Partners, SPO Advisory Corp.  has the sole voting and investment power over all such shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | ·  Individually and because of his position  as a control person of SPO Advisory Corp., John H. Scully may be deemed to  beneficially own 10,644,413 shares. As one of four controlling persons of SPO  Advisory Corp., which is the general partner of each of SPO Advisory Partners  and SF Advisory Partners, Mr. Scully may be deemed to have shared voting  and investment power with the other three control persons over 10,634,213  shares. Individually, Mr. Scully has sole voting and investment power  over 10,200 shares beneficially owned and held in an Individual Retirement  Account.

 

·  Individually and because of his position  as a control person of SPO Advisory Corp., William E. Oberndorf may be deemed  to beneficially own 10,717,913 shares. As one of four controlling persons of  SPO Advisory Corp., which is the general partner of each of SPO Advisory  Partners and SF Advisory Partners, Mr. Oberndorf may be deemed to have  shared voting and investment power with the other three control persons over  10,634,213 shares. Individually Mr. Oberndorf has sole voting and  investment power over 83,700 shares beneficially owned and held in an  Individual Retirement Account. 

 

·  Individually and because of his position  as a control person of SPO Advisory Corp., William J. Patterson may be deemed  to beneficially own 10,634,713 shares. As one of four controlling persons of  SPO Advisory Corp., which is the general partner of each of SPO Advisory  Partners and SF Advisory Partners, Mr. Patterson may be deemed to have  shared voting and investment power with the other three control persons over  10,634,213 shares. Individually Mr. Patterson has sole voting and  investment power over 500 shares beneficially owned and held in an Individual  Retirement Account. 

 

·  Individually and because of his position  as a control person of SPO Advisory Corp., Edward H. McDermott may be deemed  to beneficially own 10,635,213 shares. As one of four controlling persons of  SPO Advisory Corp., which is the general partner of each of SPO Advisory  Partners and SF Advisory Partners, Mr. Patterson may be deemed to have  shared voting and investment power with the other three control persons over  10,634,213 shares. Individually Mr. McDermott has sole voting and  investment power over 1,000 shares beneficially owned and held in an  Individual Retirement Account. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (13)   |   | All information in the table with respect to Soros  Fund Management LLC (“SFM LLC”) is based on the Schedule 13G/A filed by SFM  LLC with the SEC on February 16, 2010 and information provided to the  Company by Soros Fund Management LLC. The shares reflected above are held for  the account of Quantum Partners, Ltd., a Cayman Islands exempted limited  liability company (“Quantum Partners”). SFM LLC serves as principal  investment manager to Quantum Partners. As such, SFM LLC has been granted  investment discretion over portfolio investments, including the Shares, held  for the account of Quantum Partners. George Soros serves as Chairman of SFM  LLC, Robert Soros serves as Deputy Chairman of SFM LLC, and Jonathan Soros  serves as President and Deputy Chairman of SFM LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

Rule 13d-3under the Securities Exchange Act of 1934, provides for the determination ofbeneficial owners of securities.  That rule includesas beneficial owners of securities, any person who directly or indirectly has,or shares, voting power and/or investment power with respect to suchsecurities.  Rule 13d-3 alsoincludes as a beneficial owner of a security any person who has the right toacquire beneficial ownership of such security within sixty days through anymeans, including the exercise of any option, warrant or conversion of asecurity.  Any securities not outstandingwhich are subject to such options, warrants or conversion privileges are deemedto be outstanding for the purpose of computing the percentage of outstandingsecurities of the class owned by such person. Those securities are not deemed to be outstanding for the purpose ofcomputing the percentage of the class by any other person.  Included in this table are only thosederivative securities that have exercise prices which it is reasonable tobelieve could be “in the money” within sixty days of April 28, 2010.

 

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**Equity Compensation Plan Information**

 

The following table provides information as of December 31,2009 with respect to shares of our common stock that may be issued under ourexisting equity compensation plans, the 2007 LTIP and the DCIP.

 
| **Plan Category**                                           | ** ** | **Number of securities to  be issued upon exercise  of outstanding options,  warrants and rights********(a)** | ** ** | **Weighted-average  exercise price of  outstanding options,  warrants and rights********(b)** | ** ** | **Number of securities  remaining available for  future issuance under  equity compensation  plans (excluding  securities reflected in  column (a))********(c)** | ** ** |
|-------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity compensation plans approved by security holders      |       | 4,545,332                                                                                                     |       | $                                                                                             | 9.44       |                                                                                                                                                             | 1,538,900  |   |
| Equity compensation plans not approved by security  holders |       | —                                                                                                        |       | —                                                                                        |       | —                                                                                                                                                           |       |
| **Total**                                                   | ** ** | 4,545,332                                                                                                     |       | $                                                                                             | 9.44       |                                                                                                                                                             | 1,538,900  |   |

 

**ITEM 13.****                                             ****CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

 

**Certain Relationships and RelatedTransactions**

 

Except as reported below, there have been notransactions, since the beginning of the Company’s last fiscal year, or anycurrently proposed transactions, in which the Company was or is to be aparticipant and the amount involved exceeds $120,000, and in which any directoror executive officer or any security holder of record who is known to theCompany to beneficially own more than 5% of the Company’s Common Stock, orany member of the immediate family of any of the foregoing persons, had amaterial interest.

 

On February 23, 2009, we closed the privateplacement of approximately 15.7 million shares of Common Stock, no par value,to institutional and accredited investors pursuant to a Stock PurchaseAgreement dated February 19, 2009. The Common Stock was priced at $3.05 per share. Wellington Management,an advisor for multiple clients, purchased an aggregate of 3,269,100 shares for$9,970,755, Centennial Energy Partners L.L.C. as managing member, purchased anaggregate of 6,557,380 shares for $20,000,009, and IFC purchased an aggregateof 1,430,700 shares for $4,363,635.

 

On September 15, 2009, we closed a privateplacement of approximately 1.6 million shares of Common Stock, no par value, toIFC pursuant to a Subscription Agreement dated September 15, 2009.This private placement was related to our registered direct offering in June 2009 of approximately 18.8million shares of Common Stock at a price of $4.66 per share that closed on June 30,2009. Pursuant to the Subscription Agreement dated December 16, 2006 (the “SubscriptionAgreement”) by and between IFC and us, IFC has the right, within 45 days ofnotice of the offering, to purchase shares of our Common Stock for the sameprice and terms as the participants in an offering to retain its proportionateownership in us. IFC exercised its pre-emptive right to purchase approximately1.6 million shares of Common Stock at the offering price of $4.66 per share towhich it was entitled under the Subscription Agreement, resulting in grossproceeds to us of approximately $7.6 million. The transaction was submitted toand approved by the shareholders of BPZ at a Special Meeting of Shareholders onAugust 24, 2009. No warrants or dilutive securities were issued to IFC inconnection with the private placement. The shares were placed directly by us.We used the proceeds of this offering to develop our properties under ourexisting license contracts and other general corporate purposes consistent withour operating plans.

 

Subsequent to December 31, 2009, we closed on theprivate offering of $170.9 million convertible notes due 2015 (the “2015Convertible Notes”). The 2015 Convertible Notes are comprised of the initial$140.0 million of 2015 Convertible Notes sold in the initial private offering,the exercise of a 30-day option to purchase an additional $21.0 million of 2015Convertible Notes, and IFC’s election to participate in the offering for anadditional $9.9 million of 2015 Convertible Notes, bringing the total proceeds of the privateoffering to $170.9 million. Included within the total proceeds is SFM LLC’spurchase of $50 million of 2015 Convertible Notes.  The convertible notes were sold to an initialpurchaser who then sold the 

 

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notes to qualified institutional buyers (including IFC and Soros FundManagement, LLC) pursuant to Rule 144A of the Securities Act of1933.  The $170.9 million of convertible notes were issued pursuant to anindenture dated as of February 8, 2010, between us and Wells Fargo Bank,National Association, as trustee (“the Indenture”).

 

As provided in the charter of the Company’s Audit Committee, it is theCompany’s policy that it will not enter into any transactions required to bedisclosed under Item 404 of the SEC’s Regulation S-K unless the Audit Committeeor another independent body of the Board of Directors first reviews andapproves the transactions.

 

In addition, pursuant to the Company’s Code of EthicalConduct and Business Practices, all employees, officers and directors of theCompany and its subsidiaries are prohibited from engaging in any relationshipor financial interest that is an actual or potential conflict of interest withthe Company without approval.  Employees,officers and directors are required to provide written disclosure to the ChiefExecutive Officer as soon as they have any knowledge of a transaction orproposed transaction with an outside individual, business or other organizationthat would create a conflict of interest or the appearance of one.

 

**Director Independence**

 

We are subject to the NYSE standards in determiningwhether a director is independent.  TheBoard has adopted Corporate Governance Guidelines that include standards forthe independence of directors in accordance with the rules and regulationsof the NYSE. The standards for the independence of directors are included inthe Corporate Governance Guidelines available on our website at *www.bpzenergy.com*. The Board of Directorsconsiders Messrs. Beasley, Gray, Lendrum, Taylor and Strauch “independent”under the standards of the NYSE.  TheBoard has an Audit Committee, a Compensation Committee and a Nominating andCorporate Governance Committee, each composed solely of directors who satisfythe applicable independence requirements of the NYSE.

 

**ITEM14.   PRINCIPAL ACCOUNTING FEES ANDSERVICES**

 

Johnson Miller & Co., CPA’s PC has acted asindependent certified public accountants for the Company since November 17,2004.  The Board of Directors of theCompany has approved and is recommending to holders of shares of the Company’sCommon Stock a proposal to ratify the appointment of Johnson Miller &Co., CPA’s PC as the Company’s independent public accountants for the yearending December 31, 2010 at the Company’s 2010 Annual Meeting.

 

The following table lists the aggregate fees and costsbilled by Johnson Miller & Co., CPA’s PC for 2009 and 2008 servicesidentified below:

 
| ** **          | ** ** | **Amount Billed** | ** ** |
|---------------------|------------|------------------------|------------|
| ** **          | ** ** | **2009**               | ** ** | **2008** | ** ** |
|                |       |                   |       |   |   |
| Audit Fees          |       | $                      | 421,419    | (1) | $ | 169,182 | (3) |
| Audit-Related  Fees |       | 47,812                 | (2)        | 6,400 | (4) |
| Tax Fees            |       | —                 |       | — |   |
| All Other Fees      |       | —                 |       | — |   |
| Total               |       | $                      | 469,231    |   | $ | 175,582 |   |

 

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(1)                                  Of this aggregate amount, approximately$143,800 is attributable to fees billed by Johnson Miller & Co., CPA’sPC for services in connection with its review of our internal controls andapproximately $45,150 is attributable to our Form S-3 registrationstatements.

 

(2)                                  Audit-related fees for 2009 consist ofout-of-pocket expenses.

 

(3)                                  Of this aggregate amount, approximately$51,032 is attributable to fees billed by Johnson Miller & Co., CPA’sPC for services in connection with its review of our internal controls andapproximately $4,350 is attributable to our Form S-3 registrationstatements.

 

(4)                                  Audit-related fees for 2008 consist ofout-of-pocket expenses.

 

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The Board of Director’s policy is to prohibit theindependent auditor from providing any non-audit services unless the service ispermitted under applicable law and is pre-approved by the audit committee orthe full Board of Directors if there is no separate audit committee.

 

During the fiscal year ended 2009, the Board ofDirectors approved all of the “audit related fees.”  The Board of Directors considered whether theprovision of non-audit services by Johnson Miller & Co., CPA’s PC iscompatible with maintaining their independence and concluded that the provisionof such services does not impair their independence.

 

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**PART IV**

 

**ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

 

(a) The followingdocuments are filed as part of this report:

 

**INDEX OF EXHIBITS**

 
| **Exhibit** | ** ** | **Description**                                                                                                                |
|-------------|------------|--------------------------------------------------------------------------------------------------------------------------------|
| 31.1        |       | Certification of the Chief Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed  herewith. |
|        |       |                                                                                                                           |
| 31.2        |       | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed  herewith. |

 

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**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, as amended, the Registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized, on April 30,2010.

 
|   | BPZ Resources, Inc. |
|--------|--------------------------|
|   |                     |   |
|   | By:                      | */s/ Manuel Pablo Zúñiga-Pflücker* |
|   |                     | Manuel Pablo Zúñiga-Pflücker |
|   |                     | President & Chief Executive Officer |

 

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