TOTAL EXPLORATION PRODUCTION BOLIVIE

Exploratory well

ITAU X-1
Block XX-West-Tarija

DRILLING PROPOSAL
 DRILLING PROPOSAL ITAU X-1

GENERAL INDEX

1. GENERAL

2. EXPLORATION HISTORY

3. GEOPHYSICS AND GEOLOGY

4. WELL SUMMARY

5. PURPOSE TO DRILL

6. WELL PROGNOSIS

7. ITAU PROSPECT

8. GEOLOGICAL PROGRAM AND WELL SUPERVISION

9. DRILLING PROGRAM

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 LIST OF FIGURES:

Fig.1: Exploration Acreage Distribution – South Bolivia

Fig.2: Geological map of block XX
Fig.3: Stratigraphic column – Block XX
Fig.4: Geological section across the block XX
Fig.5: Seismic program
Fig.6: SPOT image with seismic program
Fig.7: Seismic section- Line T97-05 (part) – PSDM Processing
Fig.8: ITAU propspect. Top Huamampampa-II Depth Map
Fig.9: Geological cross-section – ITAU prospect
Fig.10: ITAU X-1 well prognosis
Fig.11: ITAU X-1 well prognosis with Casing program
Fig.12: Huamampampa coring program
Fig.13: Santa Rosa coring program
Fig.14: ITAU X-1. Casing, mud and cementing program.
Fig.15: ITAU X-1. Progress curve.

LIST OF TABLES
Table 1: Sampling program
Table 2: Electrical logging program

LIST OF PLATES
Pl.3: Top Huamampampa II Depth Map

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1. GENERAL DATA

The block XX-West (Fig.1) is located in the Southern part of Bolivia, in the “Gran
Chaco” and “O’Connor” provinces of the Tarija Department. It is completely
included in the Subandean ranges (foothills domain).
The foothills of southern Bolivia and the northwestern Argentina are characterized
by a succession of NNE-SSW ranges (Fig.2). Each of these ranges correspond to
elongated anticline structures (up to 300 km long), exceptionally cylindrical. The
ranges are culminating between 1300 and 2000 meters while the separating
syncline depressions present elevations of 600 to 800 meters. The block XX-West
is 1575 km2 large and partly covers 4 of these anticline axes.

LOCAL ENVIRONMENT:
In this area, the climate is generally humid and hot, with dense vegetation,
becoming dryer towards the north. Due to the topography, microclimates are
developing throughout the block. On the crest ranges, the temperature can drop
down to 00C in winter season with very wet winds coming from south. In summer
season, from November to February, temperature frequently reaches 350C.

The ITAU X-1 well is located in the ecoregion called “Tropical transitional forest
between Amazon and Chiquitanía”. Due to geographical, altitude, and latitude
characteristics of the block, forests of this region are sub-humid, semi-deciduous,
and belongs to the temperate Sub-Tropic. In the whole block, sub-tropical
tucumano-bolivian vegetation predominates. In its primary composition, tucumano-
bolivian forest is an evergreen forest with a complex structure, and a high quantity
of epiphytes, witch allow high bio-diversity (flora and fauna).

In fact, human action has transformed it in a combination of natural forest and

artificial pasturelands. At the well site, forest is almost absent, because of
ecological reasons (soil, local wind...) and historical human activities (deforestation
by fire...). Vegetation is composed by natural grass on the top and secondary
forest of degraded tucumano-bolivian forest on the neighboring slopes.

Because of the characteristics of the well location, impacts on flora and fauna will
not be important. Main risks to environment would be due to potential oil spills or
blow-out. Position on top of the mountain limits water presence on the site, but
many temporary streams (permanent during the rain season) flow towards East
valley of Rio Carapari and West valley of Rio Itau and could rapidly transport
pollution to human settlements and villages.

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2. EXPLORATION HISTORY:

The first petroleum investigations in the block XX began in the 20ies, with some
field geological studies conducted by the Standard Oil Co.

The regional stratigraphy of southern part of Bolivia has been mainly developed by
the YPFB geologists, by using the impressive amount of data acquired on the field,
in wells and by numerous seismic surveys.

This regional stratigraphy can be used in the block XX-West.

2.1 Regional stratigraphy.

Within the south Bolivian foothills, the undeformed stratigraphic section is

approximately 10.000 to 12.000 meters thick, ranging from Silurian up to Tertiary
(Pliocene). This section consists almost exclusively of clastics with only minor
carbonates and evaporites present (Fig.3).

The stratigraphic section may be separated into three main cycles: Cordilleran,
Subandean and Andean.

During the Cordilleran cycle of Silurian to Devonian age, 3500 m of near shore to
shelf, marine clastics units were deposited. The Devonian section contains the
major source rock (Los Monos) and Reservoir (Huamampampa, Santa Rosa) of
the block XX-West.

The Carboniferous to Triassic section of the Subandean cycle is lying

unconformably on the Devonian of the previous cycle.
The Carboniferous section (1000 to 1500 m) is dominated by continental massive
sandstones with good reservoir quality (Escarpment Fm, Tupambi Fm) and peri-
glacial diamectites (Tarija Fm).
The Permo-Triassic section (400 m) contains very good fluvial and deltaic
sandstones (San Telmo and Cangapi Fm), silicified carbonates (cherts of Vitiacua
Fm), and evaporites (Ipaguazu Fm, only present in the western part of block XX-
West).

The Andean cycle is composed of a tick section of Tertiary foreland deposits (up to
6000 m) and fluvial to eolian sandstones of probable Jurassic to Cretaceous ages
with very good reservoirs characteristics.

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Due to very active tectonic during the upper part of the Andean cycle, all the good
reservoirs (except locally the Tupambi), have been brought up to surface and are
not any more target in the block XX-West.
Like this, the main objective of the block XX-West is the Huamampampa Fm
(fractured tight sandstones).

2.2 Exploration History.

In the block XX-West, four anticline axes are identified: Aguarague, San Alberto,
Iniguazu and Domo Oso, from East to West. (Fig.2 and 4).

The most significant exploration has been conducted along the San Alberto axis.

2.2.1 San Alberto Anticline:

The northern part of the San Alberto anticline was defined in 1927 as the
“Achiralito culmination”. Later on, between 1955 and 1963, the whole San Alberto
Anticline was mapped at a 20.000 scale by YPFB.
Based on this map, the Achiralito and San Alberto structures were drilled in 1964
and 1965. The objectives were limited to the upper part of the prospective
sequence (TD around 2000m), with a main play in the Carboniferous Tupambi
sands.
The Achiralito-X-1 and X-2 wells were dry, whereas San Alberto-X-1 discovered
light oil and gas in the basal sands of Tarija Fm. Between 1965 and 1970, seven
development wells were drilled on San Alberto field with the same type of
objectives and found some light oil accumulations. The total production has
amounted 675.000 Bls of oil (depleted field).

Between 1980 and 1983, two deep wells (Macueta-X-1001 and Macueta-X-1002)
have been drilled on the same anticline on the Argentinean side, 15 kilometers
south of the San Alberto-X-1. The 2 wells reached the Huamampampa sandstones
at respectively -3510 mss and -3647 mss. Only half of the Huamampampa-2 was
drilled and tested.
Due to reservoir damage and high skin effect, the tests done in Huamampampa
were poor: Macueta-X-1001 tested 4 MMcft/d and Macueta-X-1002, probably on
the flank of the structure, tested 0,4 MMcft/d.

In 1988, an other deep well was spudded by YPFB on the San Alberto anticline
(SAL-X-9), targeting the Huamampampa 1, 2 and 3 sands. After 667 days of

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operations, 39 m of the Huamampampa were drilled and tested (open hole test, 7.7
MMcft/d and 170 barrels of condensate from a damaged reservoir). Due to some
mechanical problems, the well was plugged and abandoned (TD 4518 mkb; -3125
mss), without having recognized the lower part of the Huamampampa sequence.

In the part of the San Alberto anticline that is included in the block XX-West, no
well has been drilled to Huamampampa sandstones.

2.2.2 Aguarague anticline:

On this large trend, few exploration wells have drilled the Huamampampa and
have proved gas and condensate in the Huamampampa:
• South of the block: in the Argentinean part of the structure (1979, Aguarague
Field, 2 TCF @ -3100 mss);
• North of the block XX (1980, Caigua Field, 140 BCF @ 66m over msl).

In the part of the Aguarague anticline that is included in the block XX-West, the
Huamampampa as never been reached.

2.2.3 Iniguazu anticline:

This anticline is on trend with the Bermejo gas field at south and has been drilled
by 5 exploration wells (Iniguazu X-1 to X-4 and Boyuy X-1). The only well that is
declared to have drilled the Huamampampa-1 is the ING X-4 (1996, TD @ -3393
mss, top Huamampampa @ 3213 mss, wet), but it is probable that the
Huamampampa-II has not been reached.

2.2.4 Domo Oso:

This anticline, located in the Western part of the block XX, is on trend with the
small gas field of Huayco (36 BCF proven). The Domo Oso trend is still under-
explored as no well were drilled along this axis.

To conclude, the Huamampampa has been proven to be a gas bearing and

producing reservoir in many wells in the of NW Argentina Andean foothills. In
Bolivia, all the exploration wells drilled in the foothills domain around the block XX

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have been located using geological map, seepage and always whiteout seismic
due to the difficult ground conditions.
In the block XX-West the Huamampampa has never been drilled and the
exploration of the Devonian reservoir in Bolivia, boosted by the construction of the
Santa-Cruz to Sao Paolo gas-pipe, is only beginning.

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3. GEOPHYSICS AND GEOLOGY

In 1997, TOTAL acquired 190 km of seismic lines over the block XX (5 lines). No
seismic data had been previously recorded in the area (Fig.5, 6 and 7).

This seismic campaign was designed to study in details the San Alberto anticline
(covered by 5 lines) and to prepare the exploration of the western part of the block
(1 regional line covering the 4 structural trends).

The conventional processing (time migration) rapidly appeared inefficient to

produce an interpretable image in the core of the narrow anticlines. Pre stack
depth migration (PSDM) was then performed on two seismic lines (T97-05 and
T97-07) leading to a reliable image of the hinge of the San Alberto anticline, at
least above the top Los Monos (Fig.7). Moreover some deep reflections were
evidenced and interpreted as the top Huamampampa.

The seismic interpretation was essentially model-driven making advantage of all

the experience we had from former studies in this kind of tectonic setting in South
Bolivia and NW Argentina.
The use of the geological data collected along the seismic lines (dips and
formations limits), was fundamental to tie seismic markers with stratigraphy.

A depth map of the Top Huamampampa-II in the San Alberto anticline was realized
integrating the data of SAL X-9, MAC X-1001 and X-1002, the PSDM seismic lines
and some geological cross sections constructed all along the anticline (Fig.8).

Up to-date it is the only way to construct a map of top Huamampampa, as it cannot

be picked confidently on the time sections of the San Alberto anticline.
Moreover, the Time/Depth conversion laws deduced from foreland exploration
wells that can be used in the synclines are not adapted to the depth conversion in
the core of the anticlines.

According to the Top Huamampampa depth map and the structural interpretations
(field and seismic based), the ITAU X-1 drilling site has been located on the crest
of the range, close to SP 517 of line T97-05 (Fig.8).

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4. WELL SUMMARY

Country: Bolivia.
Well: ITAU X-1 (ITU X-1)
Block: XX-West-Tarija
Type: Vertical
Partnership: TOTAL: 75%; TESORO: 25%
Basin: Subandean zone (Andean foothills domain)

Well Location: close to SP 517 of Line T97-05

Geographic coordinates: 21° 45’ 55.7” S 63° 49’ 41.5” W
UTM Coordinates (PSAD 56): X= 414 524 Y= 7 593 286

Ground Level: 1682.4 m

Kelly bushing: 1690 m (7.62 m above GL)

Rig Type: Heavy Land Rig Parker 255 with Top Drive
Rig Capacity: Diesel / Electric

Drilling phases and casing:

INTERVAL (meters) HOLE SIZE (inches) CASING (inches)

0-100 36 32
100-700 30 26
700-1800 24 18 5/8
1800-3000 16 13 3/8
3000-4560 12 ¼ 9 5/8
4560-4750 8½ 7 (liner)

Optional
4750-5460 8½ 7 (liner)
5460-5750 6 5 (liner)

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Primary Objectives: Lower Devonian Huamampampa sandstones @
4550 mkb

Secondary Objectives: Carboniferous Tarija and Tupambi sandstones.

Upper Devonian Iquiri sandstones.

Optional Objective: Lower Devonian Icla and Santa Rosa sandstones

Estimated TD (200m below Top Huamampampa): 4750 mkb

Optional TD (200m below Top Santa Rosa) : 5750 mkb

Duration (dry well TD @ 4750m) : 216 days

Estimated cost (TD @ 4750m) : 23.4 MUS$

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5. PURPOSE TO DRILL:

The San Alberto structure is a symmetrical box fold anticline, with very high dipping
flanks (Fig.9). The box fold shape is favored by the disharmonic behavior of the
Los Monos shales. The upper part of the fold is affected by an eastward verging
thrust rooted in the Los Monos shales: this thrust produces a repetition of the
carboniferous sequence.
The ITAU X-1 exploration well is located on the NNE-SSW San Alberto anticline,
and is expected to reach the main objective in a crestal position (Fig.7, 8 and 9).

The ITAU X-1 well is designed:

1) To confirm the extension towards the north of the gas accumulation in the
Devonian Huamampampa sands discovered by the San Alberto X-9, Macueta
X-1001 and X-1002 well;
2) To determine the productivity of the low porosity - low permeability
Huamampampa sands (it is proven from Ramos and Aguarague fields that the
productivity of the wells is generally related to their position in relation to the
crest of the anticline).
3) To confirm the depth of the top Huamampampa and calibrate the structural
depth map of the top Devonian reservoirs.
4) To better evaluate the IGIP and have a first determination of production
possibilities.

The main uncertainties are:

- The structural depth map of top Huamampampa and the precise position of the
top of the culmination (due to the poor resolution of the seismic);
- The net Huamampampa and Santa Rosa reservoir thickness (no reference well
on that trend at less than 110 kilometers – i.e. Ramos);
- The well productivity which is related to distribution and density of the fractures
network.

5.1 Primary Objective: (Fig.9, 10)

The main objective in the ITAU X-1 well is the Huamampampa gas-bearing sandy
sequence.

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Due to the very few wells having reached the Huamampampa Fm in South Bolivia,
many references are carried out from the Ramos and Aguarague fields, about 110
km south of block XX-West.

Huamampampa Fm corresponds to a series of massive to cross-bedded

sandstone units interpreted as series of delta-top to marginal marine bar
complexes.
Based on electrical logs of NW Argentina, the Huamampampa Fm is divided in 4
units (see “Play elements”, Chapter 7.1). Gross thickness estimate is 450m, with a
Net sand thickness around 170m.
The average porosity is generally very low (4%) and when outcropping, these
sandstones appear to be completely tight (no outcrop samples above 1 md). In
subsurface however, feldspar and clay dissolution seems to have moderately
enhanced the reservoir permeability (3 to 5 md in the Caigua field). At a field point
of view scale, fracture porosity has greatly enhanced the permeability permitting
some excellent flow rates (25 MMcft/d per well in Ramos).

Primary objectives
Formation Lithology Expected Depth Expected Fluid
Huamampampa Low Phi (4%) and low K
4550 mkb
Fm (10-1 to 10-2 mD) quartzitic Wet gas
(-2870 mss)
(I, II, III) sands.

5.2 Secondary objective: (Fig.9, 10)

Due to well design, the drilling phase covering this objective will operate in 24”
hole. This diameter will onli authorize to perform electrical logging with a combined
tool run. The purpose of the will be only to recognize the presence of hydrocarbons
in this section, no formation test or fluid sampling being possible.

Carboniferous sandstones:

At ITAU X-1 Tupambi and Miller sands are considered as secondary objectives (in
footwall position, see geological cross-section).

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Miller sand unit is a 70 meters thick sand level at the base of Tarija Fm. It was the
main producer in the small San Alberto oil filed (0.6 MMbbls produced). It is
covered by the diamectites of the Tarija Fm.
The top of the Miller Fm in ITAU X-1 is prognosed at 1300m (+/- 100m).

Tupambi Fm (200m of sand) is the most prolific objective in the foreland basin. It
contains more than 50% of the reserves already discovered in the South Chaco
Foreland. The Itacuami Fm (20m of dark, purple-brown shales in SAL X-8) could
seal the Tupambi, if not eroded by Tarija middle carboniferous glacial channels.
The top of Tupambi Fm in ITAU X-1 is prognosed at 1400m (+/- 100m).

Porosities in Carboniferous sandstones frequently range over 15% and

permeabilities over 500 md. However, as it is the case in the whole sub-Andean
zone, seals in Carboniferous are irregularly developed and their extent and quality
are unpredictable. Moreover, these seals are probably often breached through by
the numerous small offset faults that affect the top of the anticline.

Secondary objectives
Formation Lithology Exp. Depth Exp. Fluid

Miller Sandstones Sands (Phi: 10 to 20%) 1300 mkb Light Oil

Tupambi Sandstones Sands (Phi: 10 to 20%) 1400 mkb Light oil

5.3: Optional objective: (Fig.9, 10)

If a decision is taken to continue drilling below the Huamampampa section, the

final objective of the well will be the lower devonian Santa Rosa reservoir

Devonian Santa Rosa sandstones:

In South Bolivia, the Santa Rosa sandstones has only been drilled in Caigua X-11
well (Aguarague trend, 80 km north of ITAU X-1) where it was proved to have
better productivity than the Huamampampa Fm. (29 meters evaluated in 3

14
tests;cumulated result of tests > 20 MMcft/d). In Caigua, the Santa Rosa was
drilled in a very shallow position (2100mkb), and its petrophysical characteristics at
more than 5500 meters depth are unknown.

The thickness of the Santa Rosa sandstones in San Alberto area is unknown, but
compared to Ramos, it could largely exceed 200 meters.

The Santa Rosa has been very recently drilled in the Valle Mojado X-1 well
(Argentina, south of Ramos) at 6000 meters and has been tested at 38 MMcft/d.

Optional objective
Low phi (3 to 4%), Low K
Santa Rosa Fm (10-1 to 10-2 mD) quartzitic 5550 mkb Wet gas
sands

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6. WELL PROGNOSIS:

The forecasted section for the ITAU X-1 well (Fig.10, 11) has been prepared using:
- Field based geological cross section on seismic profile T97-05;
- Interpretation of the PSDM processing of T-97-05;
- Exploration wells already drilled on the same trend (from SAL X-9, Macueta’s
and Ramos wells).

Note that the formation ages indicated below are discussed by many
paleontologists and that there is no agreement today. They should be thus only
considered as indicative. It is not recommended to base Formation determination
on the single ages.

From surface to TD, the following formations are expected to be drilled in the ITAU
X-1 well (depth are referred to ground level):

Tarija Fm – Hanging-wall (Surface to 520 m; drilled thickness: 520 m):

The Tarija Fm is regarded as Namurian to lower Westphalian in age, and was

deposited in a chaotic, fluvio-glacial environment.
The lower part of the Tarija Fm is a series of dark gray and black shales and silts of
marine glacial origin (diamectites) grading upwards into greenish-reddish deposits.
These lithologies are locally interbedded with high-energy channels fills comprising
fine to coarse-grained, greenish grey sandstone unit up to few meters.

Tupambi Fm – Hanging-wall (520 to 850 m; drilled thickness: 330 m):

The Tupambi formation is of Visean to Namurian age (Lower Carboniferous).

This unit is often developed in paleogeographic lows, where glacial channels had
been previously cut into the underlying Devonian levels. Tupambi’s base generally
consists in a strong erosional base accounting for much its thickness variation.
It is formed by yellow-grey, pink and greenish grey, massive, cross-bedded, fine to
medium grained, locally conglomeratic sandstones.
The conglomerates and sandstones represent massive channel fill sections with
characteristic fining upward sequences.
These facies were probably deposited in a marine littoral environment with frequent
and strong fluvial-glacial influence over a glacially scoured landscape.

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Iquiri Fm – Hanging-wall (850 to 975 m; drilled thickness: 125 m):

The Iquiri formation is of Givetian to Frasnian age (Upper Devonian).

It consists of light grey and greenish, fine to medium-grained, micaceous, cross-

bedded quartzitic sandstones, interbedded with greenish grey micaceous shales.
The Formation was deposited in a near shore and littoral environment. These
facies is reflecting a general marine regression and filling of the upper Devonian
basin.
The top of Iquiri formation is marked by a strong regional unconformity that marks
the transition between Devonian and Carboniferous strata. Due to this erosion, the
Iquiri thickness varies from 0 up to 500 meters. Iquiri is prognosed to have a
thickness of about 140 m in ITAU (the same than in SAL X-9 and Macueta X-
1001).

Thrust fault (around 975 m):

This thrust fault is breaching through the hinge of the San Alberto anticline. Its
emergence and trace at surface are well controlled by both field geology and
satellite image interpretation. Its trajectory in subsurface is more doubtful due to
poor seismic resolution.

Tarija Fm – Footwall (975 to 1400 m, drilled thickness: 425 m):

As above

Tupambi Fm – Footwall (1400 to 1650 m, drilled thickness: 250 m)

As above

Iquiri Fm – Footwall (1650 to 1790 m, drilled thickness: 140 m)

As above

Los Monos Formation (1790 to 4550m; drilled thickness: 2760 m)

The Los Monos Formation is of Eifelian to Givetian ages (Upper Devonian).

17
The Los Monos Formation corresponds to a thick section of dark grey and black,
organic-rich, micaceous, sub-wave base marine shale. The abundance of organic
material and high degree of lamination suggests a deep-water anoxic or sub-oxic
environment of deposition. Some intercalations do however contain a fauna of
Brachiopods, which indicates a less restricted and more oxygenated environment.

The Los Monos Formation is the most ductile part of the succession and is
generally the site of tectonic thickening in the core of the sub-Andean anticlines.
The original and undeformed thickness of this formation is unknown. In the
foreland, based on depth conversion of good quality seismic, Los Monos Formation
is assumed to be 400 to 600 meters thick.

The base and the top of Los Monos are concordant and transitional with the
Huamampampa Fm and the Iquiri Fm respectively. In some places (Huayco for
instance), the late-Hercynian tectonic episode and the subsequent erosions of the
uplifted areas have removed the overlying Iquiri and some part of the Los Monos:
the remaining part of Devonian is then covered unconformably by the
Carboniferous strata. At the ITAU X-1 location this erosional event is not believed
to have occurred but it cannot be excluded.

Huamampampa Formation (4550m to 5000 m ; drilled thickness: 450 m)

The Huamampampa formation is of Latest Emsian to Eifelian ages (Lower

Devonian).

This formation is formed by thick intervals of fine to medium-grained greenish-grey

sandstone interbedded with greenish-grey and dark grey shale and silt. Some
shale intervals contain abundant Brachiopods and trilobites with facies that indicate
a regressive tendency in the basin at these times. The sandstones are marginal to
shallow marine environments, representing barrier and offshore bars.
This formation thins from the Eastern Cordillera (around 700m) towards the East
and is pinching out somewhere in the Chaco basin as proven by the Miraflores X-1
and X-2 wells. This pinch-out is exacerbated by a general shaling-out and therefore
greater compaction of the unit in an easterly direction.

The Huamampampa Fm has only been reached by very few wells in central and
south Bolivia. Consequently, the spatial distribution and thickness variations of the
Huamampampa are still unpredictable. Drilling the ITAU X-1 well may bring
unexpected new interpretation.

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The Huamampampa can generally be divided into 4 parts (also report to chapter 7,
“play elements”).

From top to bottom:

Transition Zone (40 m): siltstones with interbedded shales and very fine to fine
grained sandstones.

Huamampampa-I (120 m): the basal section is mostly represented by white to grey
silty shales (90 m); the section is coarsening-up and is topped by quartzitic
sandstones (30 m). In Argentina, the Huamampampa-I has been sometimes called
“B Sucio” (“A” being Los Monos)

Huamampampa-II (90 m): massive section of withish-grey to grey, very fine to fine
grained, regular sorted, compacted quartzitic sandstones.
The well Macueta X-1002 entered only 90 meters of Huamampampa-II massive
sand (dip corrected), compared to 180m in Ramos field.

Huamampampa-III (200 m): it corresponds to a multi-layer interval made of shaly

siltstones and metric to deca-metric very fine to fine grained, regular sorted,
compacted quartzitic sandstones. On the San Alberto anticline, 125m of this
formation has been drilled in Macueta-X-1002. The total thickness of
Huamampampa-III is estimated to 200 meters.

If the geological results at the main objectives justify it, the well might be, under
certain circumstances drilled down to the optional lower devonian section.

Icla Formation (5000 to 5500 m; drilled thickness: 550 m, optional)

The Icla formation is of Emsian age (Lower Devonian).

There is no control of the Icla thickness in the San Alberto area. The 550m
indicated as the Icla Fm thickness is taken from Ramos and may not be applicable
for the ITAU X-1 well.

Icla Fm was deposited in the entire South Chaco Basin, during a large eastward
transgression of the Lower Devonian Sea. It consists in a thick series of dark grey

19
and black, micaceous shales interbedded with some pluri-metric fine –grained
sandstone levels. The shales of the Icla Fm are considered to have a Source Rock
potential (see also “Source Rock” part),
Some 10 to 15 m thick very fine to fine-grained sand levels are possible. In Ramos,
in spite of having similar geological characteristics than Huamampampa, the
productivity of Icla sandstones appeared to be 10 times lower than the one of
Huamampampa.

Even if high-pressure anomalies have not been encountered in the Ramos wells,
they cannot be excluded in the San Alberto anticline. Special care to pressure
increase should be taken when drilling the Icla Fm.

Santa Rosa Formation (5500 to 5700 m; drilled thickness: 200 m, optional)

The Santa Rosa Fm is of Gedinian to Emsian ages (Lower Devonian).

It is made of thickly bedded, light grey to white, fine to medium-grained, cross-

bedded, micaceous quartzitic sandstones with silica cement. These are sometimes
interbedded with thin layers of grey shales.
The Santa Rosa Fm is interpreted to have been deposited in a continental to
littoral, shallow marine environments. The upper part is fully marine, indicating the
basal Icla transgression.
In the southern Subandean belt, Santa Rosa Fm is (or at least was) a producing
reservoir in Caigua and in Ramos fields.
Its Gross Thickness is estimated around 500 meters in the block XX and the Santa
Rosa Fm is probably wedging out under the Chaco plains.

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7. ITAU PROSPECT

7.1 PLAY ELEMENTS:

7.1.1 Structure - Trap:

Present structural interpretation (Fig.8) indicates that the structure of the San
Alberto at the Top Huamampampa-Is probably continuous from south of
Macueta X-1001 to north of Achiralito X-1. The structural axis is probably more
complex than it is indicated on the structural depth map, and a North-South
partition of the structure cannot be excluded.
As far as there is no good seismic data available, this map should only be
considered as giving an approximation of the reality.
Considering a GWC at –3750 m (related to the LPG of the MAC X-1001), the
surface of the 4 way closed area at the top of Huamampampa-II is
approximately 120 km2, of which 70 km2 being included in block XX.

7.1.2 Huamampampa net reservoir thickness:

The net reservoir thickness is a major uncertainty, as the Huamampampa has

never been completely drilled in this area.

In Ramos gas field, the total net reservoir thickness overpasses 200 meters.
In Macueta X-1002 well, the Huamampampa-II-b (90 meters of 0.78 N/G sand in
Ramos) is not present. The Huamampampa-III, only partly drilled (125 m) has a
0.4 N/G. This leads to a probable 160 meters net sand thickness for the whole
Huamampampa section.
For the ITAU prospect, despite a possible northward shaling–out of the
Huamampampa, the Macueta-x-1002 figures have been considered for the
mode case.

As it is classically done in the whole area, the Huamampampa has been divided
in 4 units (Transition zone, Huamampampa-I, II and III). The petrophysical
characteristics of these units are as follows.

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 ITAU PROSPECT (mode case)
Gross Thick. Net / Net Thick. Porosity
Formation
(m) Gross (m) (%)
Transition zone 40 0.13 5 4

Huamampampa-I 120 0.25 30 4

Huamampampa-II 90(*) 0.79 71 4

Huamampampa-III 165 (**) 0.36 60 4

TOTAL Huamampampa (***) 415 (***) 0.4 166 4

(*) Ref: Mac X-1002

(**) 125 m proven in Mac X-1002.
(***) Considered Mode case in ITAU X-1

7.1.3 Seal:

A thick section (up to 2700m) of Los Monos shales, over-pressurized in its lower
part covers the Huamampampa Fm. The sealing efficiency of the Los Monos
shales is proven both in South Bolivia and NW Argentina where huge HC
columns are known (Ramos 1100m, Aguarague 650m).

7.1.4 Source Rock:

All the analytical works made at present indicates that Devonian shales (Los
Monos and Icla) are the source rocks for nearly all of the gas and condensate of
the sub-Andean zone. Silurian shales (Kirusilas Fm) also probably contribute to
gas generation, but it has never been proved. Secondary source rock occurs in
the Carboniferous section (Itacuami black shales) and in Tertiary (isolated
lacustrine shales) but have always been reported immature.

Los Monos and Icla Devonian shales are generally fair to low quality source
rocks. These shales seem to have been deposited in a shallow marine
environment. TOC values range between 0 and 3%, with an average of 0.75%.

22
 The kerogen is a mixed type II/III, gas-prone, with a moderate to low liquid
potential.
Rock-Eval pyrolysis data indicate that most of the samples of Devonian Shales
(cuttings and field samples) lie within the oil window. This is probably due to the
fact that only anticline hinges were sampled whereas Devonian shales are in
gas window in the deeply buried synclines.
The poor to fair quality of Los Monos and Icla source rocks is largely
compensated by their cumulated thickness (1000 meters in the non-deformed
area and more than 3000 meters in the core of anticlines).

7.1.5 Retention

The SAL X-9 and the Macueta wells prove that the retention is not an issue in
the area. This is due to the sealing efficiency of the Devonian shales and
probably to the 4-way dip closure of the trap. Nevertheless, it can be argued that
the situation could be different in the northern part of the San Alberto anticline,
especially if the hypothesis of the continuity of the structure all along the surface
anticline was wrong.

7.2 RISK:

According to the above play elements characteristics, the following risk parameters
have been considered

Source Rock Mig. -Timing Reservoir Trap Retention RISK FACTOR

1 1 0.5 0.8 0.9 0.36

7.3 IGIP / RESERVES EVALUATION.

Both top Huamampampa structural map and surface geology indicate that around
60% of the San Alberto structure are included in the block XX-West.

The HC column is unknown in the San Alberto as the TD’s of the 3 deep wells
drilled along this structure bring only gas-down-to values. Moreover, it is unknown
if the Huamampampa-I, II and III have the same GWC or not. It is thus very difficult
to determine a Rock Volume value.

23
In the following evaluation, the Rock Volume is calculated by using the net
thickness of the Huamampampa (as above) and a single -3750m GWC (GDT of
MAC X-1001).

The table hereafter presents the Mode case values that have been chosen for the
reserves calculation of the part of the structure which is included in the block XX-
West.

Closed area 84 km2

Top Huamampampa -2800 mss (*)
Gross Thickness 415 m
Net Thickness 180 m
GWC -3750 mss
Average Porosity 4%
Sg 52 %
1/BG (SCF/CF) 310

IIGIP 2.4 TCF

Recovery factor 0.6

Reserves 1.45 TCF

(*): The top of Huamampampa has been considered @ –2800 mss for the IGIP calculation and
@ –2870 mss in the well prognosis. It is because it is very improbable that the first exploration
well enters the Huamampampa right at the top of the structure.

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8. GEOLOGICAL PROGRAM AND WELL SUPERVISION

The Well Site Geologist will be in charge of the geological supervision of the well
under the responsibility of TOTAL EXPLORATION PRODUCTION BOLIVIE.

8.1 MUD LOGGING

The mud logging unit will be manned and operated by an INTERGAS crew, 24
hours per day. INTERGAS is a Bolivian mudlogging company providing services
for years in the country, representing BAKER HUGHES INTEQ. They offer a
computerized Drillbyte Unit.
The TEPB Well Site Geologist will supervise all operations, which include cutting
collection and description, gas detection, quality control, etc...

Detailed mud logging procedures are in the « INSTRUCTIONS FOR WELL SITE
GEOLOGISTS AND MUD LOGGING ENGINEERS » report.

8.1.1-Cutting description and analysis

The catching of cuttings samples will be made as described in Table 1 (Sampling

Program).
The Well Site Geologist is in charge of the description and Masterlog realization.
All the samples must be described under binocular and UV light, analyzed for
carbonate content by using HCl or other chemicals to aim the evaluation in full
accordance with the « Instructions for WSG and ML engineers ».
The input of these data to the well computerized-database and the lithological
interpretation of the column in the Master Log must be done promptly.
Shale density is included in the service and will be adapted according to the
geologist requirements.

8.1.2-Pressure evaluation

The “Pressure Evaluation Service” from BHI is included in the Daily Operating
Rate, as per contract.

25
This includes the D-exponent computation and involves all the parameters to
compute and evaluate promptly as well as the signs of changes in formation
pressures:
• Detection and recording signs of bore hole unstability (hole fill, tight hole,
torque, over-pull, reaming in connections and tripping)
• Detection and recording signs of changes in differential pressure, including drill
rate, mud gas levels and events
• Detection and recording well fluid instability, including influxes, loses of
circulation, etc.
• Detection and recording lithological variations that indicate potential changes in
formation pressure regimes, including cuttings quantity and characteristics and
shale-sand ratio
• Evaluation and interpretation of the geological, data monitoring and pressure
evaluation data. Preparation of the Pressure Evaluation Log and of the Pressure
Evaluation Daily Report.
• Advise Company Man and Well Site Geologist of pressure evaluation opinions.
• Correlate interpretations to prognosis and neighboring wells (SAL-X9, SAL-
X10)

8.1.3-Drilling parameters

In addition to the standard drilling parameters and for replacement of the Vibration
Monitoring Device requested on CFT, the “STICK-SLIP DETECTION SERVICE”
from BHI will be used.
This device allows the follow up of stick-slip vibration on the BHA by measuring
RPM and torque.
Alarms for anomaly detection and continuous registration parameters are available
with this service.

8.1.4-Gas detection and analysis

Continuous registration of TG and C1...nC5.

Computation and interpretation of gas relations (Wh, Bh, Ch, C2/C3 etc.).

26
Interpretation of gas connections, abnormal pressures, etc.
SH2-CO2 detection frequency will be adapted according to the WSG requirements
(in Los Monos Fm)

8.1.5-Well condition, mud hydraulics, kick control

• Control of well filling/mud return while tripping, casing, e-logging, etc.

• Calculation of pressure behavior, required mud weights, maximum pressures.
• Detection of drilling breaks, fluid invasion.
• Calculation of pressure losses in the mud circuit
• ECD calculation
• Calculation of swab and surge pressure effects
• IN/OUT Registration of mud rates, density and temperature.
• Cutting volumes & size, caving vs. well bore conditions.
• Implementation of the LOT recorder, interpretation of the data gathered

8.1.6-Daily outputs

Each day at 7: 00am at the rig site, the following outputs must be presented to the
WSG, with the previous day information.
• Master log
• Drilling parameters log
• Tripping data log
• Pressure Evaluation Log
• Logs of gas chromatography and ratios
• Daily Geological Report (DGR)
• Daily Pressure Evaluation Report
• TOTAL form of cutting description
• Conventional “textual”, cutting description (in WORD)
(“real time” data charts not included here)

27
Each day at 8: 00am the updated “Depth Data Base” will be sent by e-mail to
TEPB office in SCZ.
Weekly and at the end of each electrical logging operation, a back up of the GWR
must be sent by FTP-IP to TEPB-SCZ office (by the WSG)

8.1.7- Top of Huamampampa Fm

The top of Huamampampa must be identified in order to set the 9 5/8 inch casing
shoe.
The Top of Huamampampa is normally detected by a 20 meters fine grained
sandstones sequence, corresponding to the “Transition zone”.
Gas and HC shows as well as mud losses could be expected at this level, but are
not certain.
The best indicator for the entry in the Huamampampa Fm (transition zone) should
be the GR (issued from LWD run from 4000mbgl) combined with the observation of
the ROP and the cuttings. Nevertheless, it shall be reminded that the GR-LWD tool
is located between 11 to 14 meters above the bit, and that the first indicator will be
the drilling parameters (ROP, torque...) and possible mud losses, followed by
cutting and possible increase in gas shows. The GR-LWD will then only confirm the
entry in Huamampampa Fm.
A complete quick reference set of cuttings from SAL X-10 (15 km south) will be in
the mud logging unit to compare with the lithology of ITAU X-1.
The GR-LWD will give an accurate depth of top Huamampampa. This value will be
available to get a precise depth of the Top Huamampampa 1 to initiate coring.

8.1.8-Final Well Report (from Mud Logging Unit)

A final Report from Intergas will be written after reaching TD.

This report mainly include:
• Drilling and engineering data
• Pressure evaluation data
• Geological data

28
• Hydrocarbon shows
• Formation evaluation
• Completion status

Copies of sections of the real time printouts must be included in this report, in order
to certificate situations like mud losses, kicks, or other events.

29
 TABLE 1

Sampling program

Sampling procedure will be as follows:

ITEM RIG SET PARTNERS REFERENCE GEOCHEMISTRY PALEONTOLOGY

SETS SET REF. SET REF. SET
(3 sets)
N° 1 / N° 2 (*) (*)

QUANTITY 5 cc 50 cc 3 sets of 250 cc 500 cc 500 cc 500 cc

PROCEDURE Washed Washed Slightly washed Slightly washed Washed

And dried And dried Undried Undried Dried

Small Small Large Large Plastic Large

PACKING Plastic plastic Cloth Plastic Bag Plastic
box bag bag Bag Bag

36” Phase 10 m 10 m 10 m - -
Tarija Fm If return If return If return
30” Phase 5m 5m 5m - -
Tarija + If return If return If return
Tupambi Fm
24” Phase 2m 2m 2m - -
Tarija +
Tupambi +
Iquiri Fm
16” Phase 5m 5m 5m 20 m 20 m
Los Monos 1
12”1/4 Phase 5m 5m 5m 20 m 20 m
Los Monos 2
8”1/2 Phase 1m 2m 2m 20 m 20 m
H1+H2+Icla Fm
6” Phase
Icla + Santa 1m 2m 2m 20 m 20 m
Rosa Fm

(*) Select shaly samples.

Sampling frequency will be adapted according to the geologist requirements.

Samples will be stored on the logistic base and dispatched at the end of the well,
except for the spot stratigraphic and geochemistry samples, which will be sent as
soon as possible to TOTAL's laboratory in Paris.

30
8.2 CORING

No coring is expected before reaching the top Huamampampa reservoir section.

The coring program was designed assuming that the Huamampampa section of
the ITAU X-1 will be the same that the one drilled in MAC-X-1002 and SAL X-9.

A set of 2 cores, 27m long each will be cut in the Huamampampa Fm (Fig.12)
One core, 27 m long is foreseen in the optional 6’’ drilling phase in Santa Rosa Fm
(Fig.13).
The top of the cores will be decided using the drilling parameters, cutting
examination.
An aluminum inner tube and a special bit design (jets against the well bore) will be
required, to improve the recovery and to avoid sample damages in this fractured
geological behavior. If coring is not possible or if core recuperation is too low, SWC
could be taken in the Huamampampa-I and II.

In order to study the orientation of fractures, all the cores should be orientated: a
core orientation survey will be performed in each job. The core scratcher must be
changed for each coring job because of the expected hardness of the sandstone
and the need of good « scrib lines ».
All the drilling parameters, gas ratios, cutting descriptions, etc will be registered as
usual while drilling cores.
The Mud Logging crew will apply the usual core procedures (catching, handling,
marking, wax baths, etc) for sample preservation.
The whole operation, description and dispatching of the samples will be made by
the TEPB Well Site Geologist.

A description of the cores must be done at the rig site. The procedures are in the
« Instructions for WSG and ML engineers » report.

31
8.2.1- Drilling phase 8”1/2, 4550-4750mbgl, Huamampampa Fm, WBM

According to the nearest wells, Top H1 is expected 40 meters (+/- 10m) below Top
Huamampampa (4590 mbgl).
Five (5) meters of sandstone will be drilled and checked prior to set the Top of
core#1.

Top H2 is expected 160 m below the Huamampampa (4710 mbgl).

Five (5) meters of sandstone will be drilled before set the core#2 top.

Core #1: from top H1 + 5m. 27m long

Core #2: from top H2 + 5m. 27m long

In case of good HC shows at the bottom of Core #2, it may be proposed to cut
another core in Huamampampa II. This option will be taken at the well site taking
into HC evidences and recovery averages of Core #2.

8.2.2- Optional drilling phase 6”. Santa Rosa Fm, WBM

Top Santa Rosa Fm is expected at 5550 mbgl.

The core #3 (optional) shall be taken just in case of having 15m of sandstone with
HC shows.

Core #3 (optional): After having penetrated a minimum of 15m of sandstone with

Hc evidences. 27m long

8.3 LOGGING WHILE DRILLING

In order to recognize the entry into the Huamampampa Fm expected at 4550 mbgl
with an uncertainty of +/- 200m, TEPB proposes to run a GR-LWD (SLIM-1) 550m
above the predicted depth down to Top Huamampampa.

32
The LWD data will be used for:
- Correlation with GR logs of nearest wells, in order to identify sequences and
markers prior to reach the Huamampampa sandstones.
- Detection of the sandstones of the « Transition Zone » (Top Huamampampa).

8.4 ELECTRICAL LOGGING

8.4.1 Open hole logging

Electrical logging services will be provided by SCHLUMBERGER (Maxis Unit).

The logging program is described in Table 2.

The logging operations are to be witnessed by the TEPB Well Site Geologist who
may adjust the proposed program according to operational circumstances.
Distribution of wireline log prints, films and sepias will be as follows:

Prints:
Six (6) prints will be done after agreement from TEPB. They will be sent to TEPB
office in Santa Cruz: one draft print will remain on the well site.
Each document will be on a metric scale in 1:1000, 1:500 and 1:200 scale
(spliced).

Films and tapes:

One film will be done for TEPB.
ASCII file of the main curves will be dumped on 3 1/2" floppy disk.
Backup of the whole registers will be copied in LIS and DLIS format on “DAT”.
All these supports will be sent to TEPB headquarters in Santa Cruz as soon as
possible for further dispatching.

8.4.2 Cased hole logging program:

9”5/8 casing: CBL – GYRO

13”3/8 casing: CBL – GYRO
7” casing (optional): CBL – GYRO
5” casing (optional): CBL - GYRO

33
34
98.5 WELL SEISMICS

The following seismic calibration program is proposed for the ITAU X-1 well. It will
be operated by Schlumberger.

At 3000m, after laying the 13’’ 3/8 casing:

1.- Zero offset VSP from 3000 m to 700 m (26’’ casing shoe).
SAI recording (5 level three-axial geophones) with vibrator as source.
Full processing on site (or in Santa Cruz) to be done immediately.

2.- Walk-away
ASI will be recorded at 13’’3/8 drilling phase TD. Shooting (explosive at 15m with 8
kg charge) will be every 100 m along line T97-05 very close to T97-05 SP. The SP
will be shot up to 4500 m on each side of the well (Total 91 SP).

It has a double purpose:

- Obtain an update timetable for immediate PSDM reprocessing (performed both in
Santa Cruz and Paris);
- Image the Huamampampa through walk-away conventional processing and S to
P converted wave processing.

At TD, a conventional zero offset VSP will be recorded from TD up to 3000 m and
processed with the previous one.
The tool (s) will be defined according to hole conditions and existing casing.

8.6 TESTING

Final DST program, if necessary, will be decided after the interpretation of electric
logs.

Preliminary program contemplates the following:

a) Test in open hole after 200m drilled in Huamampampa: test carried out with
PACKER in 9 5/8” casing, DST string and equipment above Packer, Tail pipe
below with viscous pill to limit gaz accumulation below Packer.
b) DST testing with liner. Once the 7” liner is run and cemented, test will be carried
out with Packer in the 9 5/8”, and perforation done at the fractured levels.

35
8.7 SUBSURFACE REGIONAL DATA

Taking into account the available data of the surrounding wells, the following
information is anticipated:

8.7.1 – Temperatures

In the San Alberto-x9, the temperature at 4300m (top Huamampampa) was 103
°C, corresponding to a gradient of 2.05°C / 100m. The same gradient is expected
in the ITU X-1 well, leading to a temperature of about 112°C at TD point (4750m).

8.7.2 – Formation Pore Pressure:

a) Low formation pressures, below hydrostatic pressure are expected in the upper
formation (Tarija, Tupambi, Iquiri).

b) High pressures are expected in Los Monos Fm, as it has been found in the
surrounding wells. Pressure in the order of 1.4 to1.5 s.g. should be expected in
the end of phase 16”. High pressure may continue in the upper part of 12 ¼”
phase then decrease in the intermediate sandy levels and then increase again
in the area above reservoir.

c) A reverse pressure transition zone should be experienced at the base of Los

Monos Fm / top Huamampampa, with a return to pressure around 1.07 s.g. in
the reservoir. This reverse transition zone will be followed closely (through log
analysis and correlation with SAL x-9 and SAL X-10) to set the 9”5/8 casing.

8.7.3 - H2S

The presence of H2S is not documented in the area. Nevertheless 4 sensors are to
be installed on the rig and all H2S safety procedures will be taken during coring,
RFT sampling, logging (shooting nipples).

36
8.7.4 – Fracturation Pressure and Mud losses:

As a consequence of formation pore pressure forecast, mud losses can be

expected in different sections if drilling fluid is superior to fracturation pressure.
Important mud losses have been experienced in the wells drilled in the area and
allow the following predictions.

a) Shallow section (Tarija, Tupambi and Iquiri Fm): fracturation pressure gradient
is lower than 1 s.g. in the fractured sandstones, and heavy mud losses are
expected if drilled with conventional mud. Air drilling will be used in order to
avoid mud losses (and additionally improve penetration rate). An intermediate
casing will be set at around 700m to prevent possible destabilization of the
upper Tarija Formation. Water Kick at around 0.6 s.g. could be expected at
around 1000m, and drilling fluid would then be shifted to aerated mud with
density at an intermediate value (around 0.6 to 0.7 s.g., to be adapted as a
function of actual pore pressures).

b) Fracturation pressure in the shale at the top of Los Monos should be in the
order of 1.6 – 1.8 s.g. Layers of sandstones could present a lower value, but
with low permeability (This will be checked with L.O.T.). This value should
increase with time and sealing agent in the mud, and should be above the mud
weight needed for the end of the phase 16” (as per values in SAL X-9 and SAL
X-10). Should we have a real risk of incompatibility, then 16” hole T.D. could be
set prematurely (at 2800m in place of 3000m).
In the second phase of Los Monos (12”1/4), L.O.T. at the shoe should be
largely above the mud weight needed. In the lower part of the section, some
sandstone may present a weaker fracturation pressure (by permeability), also
improving with time. Mud weight in this phase will be kept near the minimum
needed. This will also help to prevent mud losses while entering the reverse
transition zone, where the 9”5/8 casing will be set.

c) Reservoir: after the reverse transition zone, the reservoir will present large
fracture, which will set the “fracturation pressure” near the “formation pressure’,
estimated to be around 1.07 s.g. Losses in the fractures will be experienced,
detecting by the way the fractured zones. Mud will be designed with polymer
base in order to minimize damage to reservoir, as their viscosity will be
degrading with time.

37
9. DRILLING PROGRAM

9.1 Generalities

The figures 14 and 15 summarize the drilling data.

The proposed TD is 4750 m TVD (i.e. 200 m inside Huamampampa) with possible
deepening to 5000 m, if good shows, to recognize the whole Huamampampa
section and then eventually recognize the Santa Rosa down to 5750 m TVD.

9.2 Basic Drilling Data.

ITAU-X-1 well will be drilled as follows:

40” conductor pipe is set at 2.5 m below cellar floor to act as a conductor.

The 32” casing will be set at 100 m BRT to isolate possible aquifer zone and to
support the rotating head that will be used for the next phase.
This phase will be drilled with spud mud.

The 26” casing will be set at 700 m to isolate the very unconsolidated formation
and prevent possible washout if active aquifers are found below 700 m.
This phase will be drilled with foam.

The 18” 5/8 casing will be set at the top of Los Monos (1800 m) formation to isolate
loss circulation formation from pressurized Los Monos formation.
This phase will be drilled with foam, then switched to aerated mud and
conventional mud, depending on water influx and bore hole stability.

The 13” 3/8 casing will be set at 3000 m to isolate the first part of Los Monos.
This phase will be drilled with OBM.

The 9” 5/8 casing will be set around 4550 m in the top Huamampampa to isolate
the over pressurized Los Monos formation from the hydrostatic, fractured
Huamampampa formation.
This phase will be drilled with OBM.

The 7” liner will be set at 4950m inside the ICLA shale’s, if good shows and good
potential were encountered in the 200 first meters of Huamampampa.

38
This phase will be drilled with WBM.

The 5” liner will be set at around 5750 m only if good shows and good potential are
observed in the Santa Rosa formation.
This phase will be drilled with WBM.

39