BPZ Energy Settles NFS Dispute, Anticipates Further Financial Statement Restatement and Plans for Operational Update.

HOUSTON -- BPZ Energy, Inc. (OTC:BPZI) (the "Company") announced today that it has settled its dispute with Navidec Financial Services, Inc. ("NFS"), anticipates further financial statement restatement and that it will provide an operational update.

NFS Settlement

The Company entered into an agreement with NFS, (the former fully-owned subsidiary of the Company's predecessor Navidec, Inc.), and certain affiliates to settle all disputes between the parties relating to a civil action filed by the Company in February, 2006. Among other things, the settlement provides for:

--a complete mutual release between the parties of any and all related claims,

--the agreement of the Parties that NFS will file for a declaratory action solely on the issue of whether the Company is or was a record owner of NFS shares at any time after the merger between BPZ Energy, Inc., a Texas corporation ("BPZ-Texas") and Navidec, Inc., in September 2004,

--access by the Company to the financial records of NFS as necessary for the Company to restate its financial statements and make required Securities and Exchange Commission ("SEC") filings, and

--the granting of certain rights (i) extending the exercise period for options and warrants held by NFS and certain of its affiliates, and (ii) concerning cashless exercise of those securities, as well as certain modifications to the registration rights held by NFS and certain of its affiliates to permit the Company to complete the registration of securities issued in the $34.4 million private placement completed by the Company in July, 2005, before registering securities held by NFS and certain of its affiliates.

Additional information about this settlement may be found in a Form 8-K filed by the Company with the SEC on May 22, 2006.

Commenting on the settlement with NFS, Manolo Zuniga, President and Chief Executive Officer of BPZ Energy, Inc., said, "We are pleased to have reached a settlement with NFS which further clarifies our separation from NFS and provides us access to NFS financial records as may be necessary to complete our filings with the SEC."

Further Financial Statement Restatement

The Company today announced it has concluded that, as a result of additional review comments from the SEC, a further restatement of its prior period financial statements is likely. The issues raised by the SEC include (i) the accounting treatment for the Company's relationship with NFS, (ii) the financial statement presentation of the pre-merger operations of BPZ Energy, Inc., a Texas corporation (BPZ-Texas), during the period it was a privately-held company under control of its then-parent company, BPZ & Associates, Inc., and (iii) the timing and accounting treatment for the distribution of the first tranche of earn-out shares payable to the pre-merger shareholders of BPZ-Texas. This restatement will not affect the Company's current cash position. Additional discussion of these accounting matters may be found in the Form 8-K described above. These matters have been discussed with the Company's Independent Registered Public Accounting Firm, Johnson Miller & Co., CPA's, P.C., who are expected to assist with the necessary restatements.

In light of the SEC's review comments and the likelihood of a further restatement, the previously issued financial statements and other financial information contained in the Company's Form 10-K for the years ended December 31, 2005 and 2004, including the quarterly periods contained therein, and its Form 8-K/A filed on January 17, 2006 should no longer be relied upon. Additionally, the Company will not be able to file its Form 10-Q for the quarter ended March 31, 2006 until the restatement has been completed. The Company expects the restatement process to be completed by mid-August 2006, though it can give no assurance that any required restatements will be completed by that date. An independent consulting firm, Opportune, LLP, has been engaged to assist the Company with the preparation of any required amendments to its SEC filings.

The Company's ongoing review of the accounting issues discussed above and any required restatements will delay the effectiveness of the Company's pending Form SB-2 registration statement. This delay will subject the Company to monthly penalties of $343,980 under the terms of the $34.4 million private placement financing closed in July 2005. The Company has initiated discussions with the relevant investors to determine whether some or all of these penalties may be paid in common stock in lieu of cash. The Company believes it will be able to pay some or all of these penalties in common stock in lieu of cash, but no assurance can be given that the Company will be successful in this effort.

Manolo Zuniga added, "During this period of restatement of our financials, it is important for us to stress that the restatement has no impact on our day to day business and, thanks to the hard work and dedication of our employees, we remain confident with respect to the Company's current business plan and future prospects."

Operational Update

The Company plans to issue a news release next week providing an update on its operations. While the restatement may have a material effect on the Company's financial statements, the Company believes none of the changes to the financial statements will have a significant impact on the underlying projects, business plan or business strategies of the Company. The Company intends to execute the basic plan of operations disclosed in its recent SEC filings, but cautions investors that those filings will be amended as necessary to reflect the financial restatements described above, and as supplemented by the Company's forthcoming operational update news release.

About BPZ Energy, Inc.

Houston-based BPZ Energy, Inc. is an oil and gas exploration, and production company with properties and projects in Peru and Ecuador. The Company has an integrated gas-to-power strategy which envisions the development of large natural gas resources in Block Z-1 to supply a Company-owned power plant in Peru and sales of natural gas into Ecuador for third-party power generation. BPZ has exclusive rights and license agreements for oil and gas exploration and production that cover 100% ownership in approximately 2.7 million acres in the Tumbes, Talara and Lancones basins.

This press release contained forward-looking statements based on our current expectations about our company, our properties and our industry. You can identify these forward-looking statements when you see us using the words such as "expect," "anticipate," "estimate," "believes," "plans" and other similar expressions. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. We also face uncertainties regarding our ability to complete required financings and other conditions to the successful development of our business plan. We undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. We caution you not to place undue reliance on those statements.