Pluspetrol Colombia Corporation 7

TORCOROMA ASSOCIATION CONTRACT

MIDDLE MAGDALENA VALLEY

COLOMBLA

,
II TECHNICAL REPORT 1I

FEBRUARY 1998
 TORCOROMA BLOCK
MIDDLE MAGDALENA VALLEY
COLOMBIA
Pluspetrol Colombia Corporation

February 1998

I.SUMMARY

Block Location
Licence Information
Seismic Program

2. TECHNICAL OVERVIEW

Regional Geology
Tecto - Sedimentary Setting
P Structure
Geochemistry
ReseN Oirs
Type of Hydrocarbon

3. PLAYS

Gaucho Prospect
The Gaucho X -1 Well
Chuspas Lead

4. CONCLUSIONS AND RECOMMENDATIONS

 TECHNICAL REPORT

TORCOROMA EXPLORATION BLOCK

MIDDLE MAGDALENA VALLEY
COLOMBIA

1. SUMMARY

The Torcoroma Block located in the Middle Magdalena Valley of Colombia ,

is operated at present by Pluspetrol with 100 % of working interest (Fig. 1).

The block had been awarded to Repsol on July Ist, 1993. Subsequently
Sipetrol and Pluspetrol acquired a 25 and 20 % interest in the license. Finally
Repsol and Sipetrol decided withdrew its interest, leaving to Pluspetrol the
operation and the 100% interest, on August 30th, 1995

Currently the Torcoroma Association Contract is in the 3rd. year of the

exploratory period. All commitment for the first, second and third year have
been accomplished. Activities for the fourth exploration year will be the
drilling of a well (Fig. 2).

A number of succeeding extensions of the exploration periods were

requested on the basis of significant delay from environmental authorities in
granting the approval for seismic acquisition and drilling a well. A cumulative
extension of nineteen months was conceded to accomplish the contract
commitments of the three first years of exploratory period.

This report summarizes the result of exploration work performed up to now in

relation with the Torcoroma Association Contact. These works consist of
seismic reprocessing, field surface geology, geochemistry analysis, two
seismic acquisition programs and drilling a well.

The reprocessing and the first seismic acquisition work (100 Km) were for
regional structural and stratigraphic study and the second geophysical
program (80 Km) for detail exploration work to upgrade leads into prospects.

These exploratory works confirmed two prospect presents in the south sector
of the area. The best of them with objectives in the fluvial channel sandstone
of Eocene Chorro Gr. and the Paleocene Lisama sandstone Member, was
tested by the exploratory well Gaucho x-I. The well reached a total depth of
3017 meters, but was abandoned as a dry well due to the poor reservoir
condition (Chorro and Lisama sandstone members), shown during drilling
and by logs.

The decision to enter into the fourth exploratory year or to return the
Torcoroma block to Ecopetrol must be taken by middle March,l998, this is
one or two weeks before the third year of exploration period expires (March
31th, 1998).
P
Due to the low remanent prospectivity of the Torcoroma Block, a
recommendation is done to return this area to Ecopetrol.

Block Location

The Torcoroma block covers I16210 hectares (287155 acres) in the

northeastern part of the Middle Magdalena Valley basin and Middle
Magdalena Valley foothills on the west flank of the Eastern Cordillera. The
Middle Magdalena Valley basin is a rich petroleum province in Colombia
where the traditional play of Tertiary fluvial sandstones in Andean related
structural traps has produced over 2.5 billion barrels of oil and associated
gas. The Torcoroma block is strategically located north of and on trend with
productive oil fields (Fig. 3).

Torcoroma is easily accessible by the troncal N-S main colombian road

and also by a reasonable network of secondary roads.

Licence information

P The Torcoroma Association Contract is a standard Colombian Contract with a

six year initial exploratory term. The fulfillment of each year's commitments
gives the option to enter into the next year's program or leave the contract.
Commitments for the first, second and third year have been met, and the
Contract is in its third year, ending March 31, 1998 (Fig. 2). For the fourth
year the commitment is one exploratory well.

Seismic Program

After the reprocessing of 1997/81 data, two seismic acquisition programs

were developed in the Torcoroma Block by the consortium. The first one was
carried out during 1994 and its objective was related with a regional
reconnaissance throughout the area to confirm the structural style and trap
characterisation for future detailed works. As a result of this work two leads
related with traditional Tertiary reservoirs were defined in the south sector of
the Torcoroma block.
A new seismic acquisition program was performed during early 1997, to
confirm the prospectivity of the interest sectors.
 2. TECHNICAL OVERVIEW

Regional Geology: The Middle Magdalena Valley basin and foothills are
part of the north-south elongate intermontane Magdalena Valley basin. They
lie between the Central Cordillera to the west and the Eastern Cordillera to
the east. The Central Cordillera formed during latest Cretaceous-Paleocene
orogeny, generally with east-verging structures. The Eastern Cordillera
formed during Middle Miocene to Recent compression, typically with west
verging backthrusts along its common border with the Middle Magdalena
Valley.

The stratigraphy of the Middle Magdalena Valley basin and foothills

comprises three sequences, including: 1) a Mesozoic riwpassive margin
sequence, 2) an uppermost Cretaceous to Eocene foreland basin sequence
related to early Paleogene growth of the Central Cordillera to the west, and 3)
an Miocene to Recent foreland basin sequence related to the Late Tertiary-
Quaternary growth of the Eastern Cordillera to the east.

Tecto-sedimentary Setting: Prior to the Cretaceous-Paleocene orogeny,

c the Torcoroma area was part of a broad, west facing passive margin that
reached as far east as the Llanos basin. Passive margin sedimentation
characterised most of the Cretaceous, with widespread deposition of rich
organic marine shells and carbonates. Important source rock intervals,
including condensed sections of the Aptian-Albian and Cenomanian to
Santonian, were deposited as parts of the Tablazo, Simiti, Salto and La Luna
Formations.

Growth of the Central Cordillera during the Maastrichtian and Paleocene

created a foreland basin to the east. The basin was asymmetric, with a
steeply east-dipping west flank and a gently west-dipping east flank that at
that time was continuous with the Llanos basin. Sediments accumulating in
the Middle Magdalena Valley became more clastic-prone and coarser during
the Maastrichtian and Paleocene, because of two factors: regional regression
owing to falling global sea level; and emergence of the Central Cordillera,
which acted as a nearby provenance for coarse sediments. Those coarse
clastics of both the synorogenic Paleocene Lisama Formation and the post-
orogenic Eocene sediments of the Chorro Gr. (La Paz and Esmeralda Fms.)
and Chuspas Gr. (Mugrosa and Colorado Fms.) are important reservoirs in
the Middle Magdalena Valley, such as at nearby oil field (see Figs. 3 & 4).

Through seismic and well information it is possible to recognise a very strong

r compressive phase of deformation in the limit Paleocene -Eocene. The
Central Cordillera and the western sector of the Eastern Cordillera were
uplifted at this time and a thick portion of the pre-Eocene stratigraphic column
was eroded in those elevated zones as it is the case of the eastern and
northern sectors of Torcoroma area.
r-
The Eocene deposit consists essentially of fluvial facies. This cycle normally
begins with a braided system (Chorro Gr.) onlapping the pre-Eocene
unconformity. Upwards, meandering fluvial channel can be recognised within
alluvial pain deposits. These sandstones normally have very good porosity
and permeability and represent one of the most productive reservoirs in the
Magdalena Valley region.

A weak tectonic reactivation took place in the Magdalena region in the early
Oligocene. Medium to distal alluvial fan facies were deposited during the
middle to late Oligocene in Torcoroma area (Chuspas Gr.) laying in parallel
unconformity over the previous Eocene cycle. Fluvial channel sandstones
facies belonging to this interval are the main producers in the basin.

Finally during the early and middle Miocene, the Central but mostly the
Eastern Cordillera region was uplifted due to a new compressive
deformation's phase. Continental fluvial sedimentation continued
progressively onlapping eastward the pre-Miocene terrains along the central
region of the Magdalena Valley (Real Gr.).

Structure: Two main compressive phases of deformation can be recognised

in this area:
f-
1- Paleocene-Eocene limit. As a result of compressive stress perhaps in
connection with the Central Cordillera front thrust reactivation, a series of
synthetic low angle thrusts, vergent eastward were developed in the region of
the Magdalena Valley at this time, The Cretaceous and Paleocene sediments
were folded conforming the oldest productive traps in the region.
As a consequence of this phase of deformation the eastern margin of
Magdalena Valley was locally uplifted. So happened in the Torcoroma area,
and the Cretaceous and Paleocene were eroded along the west flank of the
current Eastern Cordillera (Figs. 3 & 5 )

2- Miocene-Pliocene. In the early Miocene a new and very strong phase of

compressive stress started in northern South America. The Eastern Cordillera
was progressively uplifted throughout the Miocene and Early Pliocene by
combination of thrust and lateral faults along both east and west margins
(case of Lebrija Fault in Torcoroma area, Fig. 3).
As a result of this deformation phase many elongate folded structures with
northwest-southeast orientation and west vergent were developed in the west
flank of Estern Cordillera. Some of them have trapped a large volume of oil
(La Cira, Lisama, Payoa, Provincia, Bonanza, etc. oil fields).

Geochemistry: The main source rock in the Magdalena Valley basin is La

P Luna Fm, which generated tremendous volumes of oil and gas in Venezuela
and Colombia. It consists of black calcareous shells with some interbeded
limestone and chert. Micropaleontology content suggests that they have been
deposited in a restricted circulation environment under deep water condition.
TOC values ranging from 3.5 to 4.5% are normally proved in the Magdalena
 area related to La Luna Fm. Kerogen is mainly amorphous and type II
r according with hydrogen-carbon and oxygen-carbon ratios.
A maturity model was performed using well information from Santa Lucia-2,
which is located very close to the western limit of the Torcoroma block (see
figure 6). According to this model La Luna Fm reached the top of the oil
window in the late Eocene or early Oligocene and it was necessary 8000' of
burial.
Assuming similar thermal gradient in Torcoroma area we should consider that
the same maturity and time migration conditions existed in the southwestern
part of the block.

Reservoirs.

Main Targets: "Lisama Fm: Fluvio-deltaic sandstones with porosity

ranging 20-25%. Productive in; Cristalina, Cantagallo, Las Monas, Lebrija,
Salinas, Los Angeles, etc. fields. See figures 3 & 4.
*Chorro and Chuspas Grs: Fluvial sandstones, 20-25%
porosity. Besides in some of the fields mentioned before, they are productive
in Infanta -LaCira, Casabe, Velazquez, etc. fields.
Secondary Targets: *La Luna and Calizas Basales Fms: They are productive
when fractured as it is the case of Totumal and Buturama fields (Fig. 3).
"Real Gr.: Fluvial sandstones, 20-25% porosity. Still not
e productive in this region.

Type of Hydrocarbon.

Regional information in the Magdalena Basin shows that most of the area is
oil prone. Gravity ranges from 20 to 45 API degrees. The nearest antecedent
indicates that 20-24 API degree crude oil may be expected in connection to
the potential exploratory traps in the Torcoroma Block (Fig. 3).

3. PLAYS

Based on seismic and well information one prospect (Gaucho) and one lead
(Chuspas) have been developed in the area.

Gaucho Prospect

The Gaucho prospect is a structural-stratigraphic combination trap located in

the southwest sector of the block. At the Pre-Eocene Unconformity (Base of
Chorro Fm) the structure is a nose plunging southwest. Considering San
Alberto-I and Minas-2 wells and seismic information, it is possible to
recognise that basal Chorro sandstone goes up onlapping the unconformity
northeastward and pinching out in this direction. Seal at the top of Chorro
r
sandstone is provided by a thick shale interval from the overlaying Chuspas
Fm (see well log information). Below the Eocene Unconformity the structure
shows an updip reverse fault closure involving Lisama and the rest of the
Cretaceous (See Time Structural Maps and seismic lines attached in this
report).
r The Gaucho x-1 well.

The Gaucho x-1 exploratory well tested the combined structural-stratigraphic

trap mentioned before. Tops of geological sequences and Formations were
find as it was predicted. Unfortunately the main reservoir objective of this test
presented low porosity and permeability which were not adequate to contain
hydrocarbons. Only oil shows were detected during drilling.

Chuspas Lead.

As showed in Figure 13, in this lead the trap is an updip reverse fault. The
fault affects the entire Eocene-Miocene column and perhaps it's a pre-
existing east vergent old thrust reactivated (Figs. 14 & 15).
The main targets are fluvial channel sands belonging Chuspas Gr.
Secondary targets are fluvial sandstones of Real Gr.
Vertical seal in both Chuspas and Real Grs. could be provided by multilayers
shales interbedded in the column.
Two critical factor limits the prospectivity of this lead, the hydrocarbon charge
efficiency and lateral seal.

4. CONCLUSIONS AND RECOMMENDATIONS

P
* Currently the Torcoma Association Contract is in the 3rd.year of the
exploratory period. All commitment for the first, second and third year have
been accomplished. Activities for the fourth exploration year will be the
drilling of a well.
* The Gaucho x-1 exploratory well reached the total deep and geological
objectives such as it was programmed. The result of the Gaucho x-1 well
evaluates the prospect and limits the prospectivity of this region.
* In our view the thrusting structure in the Middle Magdalena Valley foothills
(Eastern sector of the Torcoroma block) assumed formed by thin-skinned, far-
travelled stacked thrust sheets, duplexes, etc is very difficult to prove and
define prospective sector for exploration wells.
The objective of 1994 seismic data was focused in this sort of structures, but
seismic data quality in this sector was very poor. No feature on the acquired
seismic can be associated with the referred structures.
From west to east the six 1994 seismic lines and also the previous ones are
consistent to show that the traditional Tertiary reservoir intervals goes updip
and reach the outcropping and faulting east sector in a very shallow position.
Subthrust structures in that sector are hypothetical and involve a high
r- exploratory risk.

* The Chuspas structure, located in the south-eastern sector of the

Torcoma block is an updip structure closed against N-S regional thrust fault.
The difficulty to define t h e effective lateral seal and the petrophysical
 character of the reservoir made this lead a high-risk prospect. In our opinion
P
it is not recommended for further exploratory activities.

* Due to the low remanent prospectivity of the Torcoroma Block,

a recommendation is done to return this area to Ecopetrol.
 Gaucho x-1 Well
GENERAL INFORMATION

. WELL
STATUS
: GAUCHO X-1.
: WILDCAT
0 FINAL CONDINITION : SECO Y ABANDONADO (FINAL)
TD : 9.904’
0 AREA : TORCOROMA.
0 COORDINATES :-NORTHING: 1.357.645.2 m.
- EASTING : 1.054.455.9 m.
G.L. : 186’
0 R.T. : 202’
0 SEISMIC LINE# 96-003, S/P 1229
0 OPERATOR :PLUSPETROL COLOMBIA CORPORATION.
MG : Nr. 14 ( PRIDE, COLOMBIA)
0 SPUDED : DECEMBER 16/97.
/c.
FINISHED : JANUARY 16 /98.

FIRST FORMATION : REAL. (TERTIARY)

0 LAST FORMATION : UMIR ( UPPER CRETACEOUS).
0 CASING : 9 5/8” @ 4139’

0 MUDLOGGING COMPANY: GEOSERVICES.

0 LOGGING COMPANY : SCHLUMBERGER.
0 MUDCOMPANY : DOWELL.
-FROM G.L. TO 4139’ WATER BASE MUD
-FROM 4139’TOTD. PHPAKCL
 GAUCHO X-I
WE LL SUMMARY

The Gaucho x-I well drilled the following stratigraphic sequence:

Real Formation: from surface to 5382’

It was composed mainly by Conglomerates and Sandstones, translucent,

quartzose, with lithics (chert), loose, with calcareous cement. From 3900’to the
base of this formation an increase in Claystone levels was observed. Claystones
were light orange, moderately hard, non-calcareous, with quartz grains
inclusions. At 5000‘ the first carbonaceous (Lignite) level was described.
No gas, no shows were reported.

Colorado Formation: from 5382’to 6558’

Principally Claystones with Sandstones intercalations composed this formation.

Claystones were varicoloroured, brownish red, moderately hard, blocky, non
calcareous; Sandstones were described translucent, medium to coarse,
quartzose, locally conglomeratic, loose, poorly sorted.
Nogas, no shows were reported.
P
Mugrosa Formation: from 6558‘to 7644’

It was composed mostly by Claystone, varicoloured to reddish brown, with

mottles, non-calcareous, grading to Siltstone.
No gas, no shows were reported.

Chorro Group: from 7644‘to 8280’

The upper section of this group, from top down to 7550’, was integrated by
Claystone, varicoloured to reddish brown, light gray, soft, blocky, silty and sandy
in parts, non calcareous, with Sandstone intercalations, hyaline, medium in the
upper sector grading to very fine in the lower sector, quartzose.
At 7475‘the equivalent to “L” sand was described. It was a Sandstone, light
green to white, medium to coarse, argillaceous matrix, siliceous cement with
recristalization, very poor visual porosity. Scarce oil stains, light brown, pale dull
yellow fluorescence, slow streaming milky white cut. Total gas readings showed
a maximum of 12%.
The lower section of the group was composed by Claystone, varicoloured,
brownish red, firm, in parts silty, with scarce Sandstone intercalations, very fine
grading to Siltstone.
The “Basal Sandstones” of the Chorro Group, One of the targets, here was
/c
represented by Siltstones, in parts grading to very fine Sandstones, with very
poor reservoir conditions.
r
Lisama Formation: from 8280‘to 9584’

This formation was described in this well as Claystone, Silty Claystone and Shaly
Claystone with scarce Sandstone intercalations.
The Claystone was light gray to yellow mustard, soft, subblocky, non-calcareous,
grading to Siltstone.
Sandstones were light gray, very fine, quartzose, argillaceous matrix, grading to
Siltstone.
At 8830‘the “Lisama Sandstone” was described. It was the principal target of this
well. In this case it was described as very fine Sandstone, grading to Silstone,
very poor visual porosity, tight. Very poor oil stains, weak dull yellow
fluorescence, slow streaming milky white cut. Total Gas readings showed 16%
maximum value.

Umir Formation: from 9584’to 990’(TD)

It was composed by Claystone to Shaly Claystone, light gray to dark greenish

gray, splintery, blocky, carbonaceous inclusions, grading to Siltstone in parts.
From 9760’down to TD some carbon levels were detected.
No shows were reported.

CONCLUSIONS

*3 As already programmed the Gaucho x-I well reached a TD of 9904’. It drilled

upper levels of UMlR Fm. (Cretaceous). Thus all oil possibilities of the

-
Tertiary sequence were investigated.
e:* The traversed lithologic sequence does not greatly differ from the sequence
known in the region.
e:* The principal objectives of the well, the “Basal Sandstones” from the Chorro
group and the Lisama sandstones from the Lisama Fm, were found in the
silstone facies as well as very fine sandstones, with very low petrophysical
conditions and scarce hydrocarbon traces.
*:* 3 PI of the well’s targets, oil producer in
nearby oil fields, showed
*:e The Gaucho well had a
wells, Minas 2 and San Alberto 1, located I,7km to the west and 2,3 km to
the southwest, respectively, as shown in list attached.
9 For the above-mentioned reasons on January 16, 1998 it was decided to
abandon the Gaucho x-I well.
 FIGURES

1. Location Map.

2. Contract Status and Commitments.

3. Hidrocarbon Occurrences and Tectonic Features.

4. Stratigraphic Column.

5. Schematic Cross Section.

6. Lopatin’s Diagram - Santa Lucia - 2 Well.

7. Cross Section A - A .

8. Cross Section B - B’.

9. Play Map.

IO. Prospect Map Gaucho x-I. Eocene Unconformity Map.

11. Prospect Map Gaucho x-I. Lisama Sandstone Mbr. Map.

12. Gaucho Prospect .- Interpreted Seismic Panel.

13, Chuspas Prospect.- Eocene Unconformity Map.

14. Seismic Line PT 96-001.

15. Seismic Line TOR 94-03.

ATTACHMENT

1. Seismic Base Map.

2. Time Structure Map.- EOCENE UNCONFORMITY

3. Time Structure Map.- TOP CHORRO Fm.

4. Time Structure Map.- TOP LISAMA Mbr.

5. Time Structure Map.- BASE LISAMA Mbr.

6. Seismic Line PT 96-003.

7. Seismic Line PT 96-006.