UCAYALI & ENE BASINS

Technical Report

As part of

The Hydrocarbon Potential of the Southern

Sub-Andean Basins Project Ucayali, Ene and Madre de Dios Basins

by

PARSEP

Proyecto de Asistencia para la Reglamentacin del Sector

Energtico del Per

TEKNICA PERUPETRO S.A.

Gary Wine (Project Leader) Elmer Martnez (Senior Bob Parker (Senior Geophysicist) Geophysicist/Perupetro Coordinator)

Justo Fernandez (Senior Geologist) Ysabel Caldern (Geologist) Carlos Galdos (Geophysicist)

December 2002

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TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................0 FIGURES......................................................................................................................3 TABLES........................................................................................................................5 ENCLOSURES ............................................................................................................5 APPENDIX...................................................................................................................6 EXECUTIVE SUMMARY .........................................................................................8 1.0 INTRODUCTION...............................................................................................10 2.0 SCOPE OF PROJECT.......................................................................................12 3.0 PREVIOUS WORK IN THE STUDY AREA..................................................15 4.0 GEOLOGY OF THE UCAYALI/ENE AREA ................................................17

4.1 GENERAL BASIN DESRIPTION...................................................................17 4.2 REGIONAL GEOLOGY..................................................................................18

4.2.1 Pre-Andean System ....................................................................................18 4.2.2 Andean System ...........................................................................................22

4.3 GEOLOGY OF THE UCYALI/ENE PROJECT AREA..................................26 4.3.1 Project Overview .......................................................................................26 4.3.2 Stratigraphy of the Ucayali/Ene Area........................................................28

4.3.2.1 Basement.............................................................................................29 4.3.2.2 Ordovician...........................................................................................29 4.3.2.3 Silurian................................................................................................29 4.3.2.4 Devonian - Cabanillas Group.............................................................29 4.3.2.6 Late Carboniferous to Early Permian - Tarma/Copacabana Group...31 4.3.2.7 Late Permian .......................................................................................36

Shinai Member.............................................................................................39 Red Bed Group/Mainique ............................................................................39 Permian/Cretaceous Basin Evolution Camisea Area................................41

4.3.2.8 Triassic to Jurassic ..............................................................................41 Mitu..............................................................................................................41 Pucar Group ...............................................................................................42 Evaporites (Salt)...........................................................................................43 Sarayaquillo .................................................................................................44

4.3.2.9 Cretaceous...........................................................................................45 Cushabatay...................................................................................................46 Agua Caliente...............................................................................................48 Chonta ..........................................................................................................48 Vivian Formation .........................................................................................49

4.3.2.10 Tertiary..............................................................................................49 4.3.3 Structural Analysis of the Ucayali/Ene Area ..............................................50

4.3.3.1 Devonian Faults ..................................................................................51 4.3.3.2 Late Paleozoic Faults/Structures.........................................................51 4.3.3.3 Late Andean Foreland Faults/Structures.............................................52 4.3.3.4 Cushabatay High.................................................................................52

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4.3.3.5 Contaya Arch ......................................................................................54 4.3.3.6 Shira Mountains ..................................................................................54 4.3.3.7 Fold and thrust belt of the Ene and western Ucayali Basin ................55

North and Central Areas ..............................................................................55 Oxapampa and Ene Basin Areas..................................................................55 Camisea Area ...............................................................................................61

4.3.3.8 Structural Profiles ...............................................................................64 Section A (Enclosure 3a) .............................................................................64 Section B (Enclosure 3b) .............................................................................65 Section C (Enclosure 3c) .............................................................................65 Section D (Enclosure 3d) .............................................................................66 Section E (Enclosure 3e)..............................................................................66 Section F (Enclosure 3f) ..............................................................................66

5.0 GEOPHYSICS ....................................................................................................68 5.1 INTRODUCTION ............................................................................................68 5.2 DATA QUALITY.............................................................................................69 5.3 WELL TIES......................................................................................................69

5.3.1 Ucayali North.............................................................................................69 5.3.2 Ucayalii South............................................................................................69

5.4 HORIZONS INTERPRETED ..........................................................................70 5.5 MAPS PLOTTED.............................................................................................70

5.5.1 General Comments.....................................................................................71 5.5.2 Time Structure Maps Ucayali North.......................................................72

5.5.2.1 Pozo (Figure 30, Enclosure 4a)...........................................................72 5.5.2.2 Base Cretaceous (Figure 31, Enclosure 4b)........................................74 5.5.2.3 Copacabana (Figure 32, Enclosure 4c) ................................................74 5.5.2.4 Contaya (Figure 33, Enclosure 4d) .....................................................74

5.5.3 Isochron Maps Ucayali North ................................................................74 5.5.3.1 Pozo to Base Cretaceous (Figure 34, Enclosure 4e). ..........................74 5.5.3.2 Base Cretaceous Contaya Isochron (Figure 35, Enclosure 4f) ........74

5.5.4 Time Structures Maps Ucayali South .....................................................75 5.5.4.1 Upper Cretaceous (Figure 36, Enclosure 5a)......................................75 5.5.4.2 Base Cretaceous (Figure 37, Enclosure 5b)........................................75 5.5.4.3 Tarma (Figure 38, Enclosure 5c) .........................................................76 5.5.4.4 Top Devonian (Figure 39, Enclosure 5d) ............................................76 5.5.4.5 Basement (Figure 40, Enclosure 5e)...................................................78

5.5.5 Isochron Maps Ucayali South.................................................................79 5.5.5.1 Cretaceous Isochron (Upper to Base) (Figure 41, Enclosure 5f).........79 5.5.5.2 Upper Cretaceous Tarma Isochron (Figure 42, Enclosure 5g) ........79 5.5.5.3 Lower Paleozoic (Devonian-Basement) Isochron (Figure 43, Enclosure 5h) ...................................................................................................79

5.5.6 Cretaceous Channel Play Ucayali South................................................81 5.5.7 Future work to be done ..............................................................................82

6.0 WELL SUMMARY ............................................................................................83 7.0 PETROLEUM GEOLOGY ...............................................................................84

7.1 GEOCHEMISTRY ...........................................................................................84 7.1.1 General ......................................................................................................84 7.1.2 Source Rocks..............................................................................................84

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7.2 RESERVOIRS/SEALS.....................................................................................85 7.3 PROSPECTS/LEADS.......................................................................................87

7.3.1 Structural Prospects...................................................................................87 7.3.1.1 Rashaya Norte.....................................................................................87 7.3.1.2 Rio Caco Sur .......................................................................................88

7.3.2 Stratigraphic Leads....................................................................................89 7.3.2.1 Cushabatay South Pucar Lead (CSPL) .............................................89 7.3.2.2 Mashansha Channel ............................................................................91

8.0 CONCLUSIONS .................................................................................................92 9.0 SELECTED REFERENCES .............................................................................94

FIGURES Figure 1: Area of investigation of the PARSEP Group for the Southern Sub-Andean Basins of

Peru.......................................................................................................................10 Figure 2: Location of the Seismic and Wells utilized in the study of the Ucayali Basin.............13 Figure 3: Location of Madre de Dios Basin area and the available seismic data (in red) ..........14 Figure 4: Stratigraphic Columns for the Sub-Andean Basins of Peru, highlighting the Ucayali

Basin......................................................................................................................19 Figure 5: Composite seismic line through the South-Central portion of the Ucayali Basin

showing a) the magnitude of the Devonian-Ordovician (?) rift Basins, b) the onlap relationship of the Carboniferous Ambo onto the Eohercynian Unconformity, and c) the truncation of the Paleozoic sequences beneath the Nevadan Unconformity at the Base of Cretaceous..............................................................................................................20

Figure 6: Seismic Line in the south central Ucayali Basin showing a significant amount of erosion on the pre Ambo sequences (Devonian) beneath the Eohercynian Unconformity (dk. blue reflector). ........................................................................................................21

Figure 7: Seismic line OR-95-08 in the northern Contaya Arch area showing the evolution of a Late Permian to early Mesozoic extensional basin through the use of different datums (flattenings) (after PARSEP, 2002) ............................................................................24

Figure 8: (After Tankard, 2001) Late Triassic Middle Jurassic paleogeography. The locus of sedimentation was the extensional tract between the Contaya (csz) and Shionayacu (ssz) shear zones. Isopachs show that the stratigraphy terminated abruptly against NE-striking faults, and for this reason they are described as basin sidewall faults. psz, Pucalpa shear zone; sol, Solimoes Basin. .........................................................................................25

Figure 9: Isochron map of the Ambo Group in the southern Ucayali Basin............................30 Figure 10: An example of a 50 to 60 meter anhydrite unit within the upper Copacabana section

that has been repeated by a thrust fault. The log on the right is the hanging wall section and the one on the right, the footwall section. Note: The repeated section has been removed in the Huaya 3X well in the stratigraphic stratigraphic cross-sections 1 and 2....32

Figure 11: West to East seismic line through the Panguana well showing a) how the Copacabana has been erosionally reduced beneath the Base Cretaceous unconformity and b) The anomalously thick section of pre-Ambo sediments intersected in the Panguana well. The Basement pick is very interpretive and base largely on the results of the Panguana 1X well...............................................................................................................................32

Figure 12: Distribution of the Ene Formation as mapped seismically in the Ucayali Basin. The seismic line shown in Figure 14 is located on this map..................................................34

Figure 13: NW/SE stratigraphic cross-section flattened in the Upper Permian unconformity shows the late Permian post Tarma/Copacabana Group stratigraphy. Orellana 1X is in the SE Maraon Basin...................................................................................................35

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Figure 14: Seismic line CP739801 (located on Figure 12) through a thick preserved Permian section in the Northern Ucayali Basin. In an alternative interpretation, the Top Copacabana was picked at an alternative reflector, the pink mk below the Grn Sdst. If this surface were a significant unconformity, as it would appear from this seismic interpretation, this horizon would most likely represent the Devonian unconformity so readily visible in the southern Ucayali Basin, thereby supporting the interpretation presented above.......................................................................................................36

Figure 15: Stratigraphic cross-section flattened on Base Cretaceous shows detailed late Permian stratigraphy. Note excellent log correlation in Shinai, and two 10 m. thick anhydrite beds in the Middle Mudstone Formation and anhydrite beds in the Noi Sandstone Patsite Member...............................................................................................................................37

Figure 16: Evolution of the post-Copacabana Permian and Cretaceous sequences in the Camisea area through flattenings in Noi, Shinai, Lower Nia, Mid Mudstone or Base-Cretaceous, Agua Caliente, Chonta and Vivian Formations ...........................................................40

Figure 17: Isochron Map of the salt swells in the western Ucayali Basin. Cold colors represent thins and hot colors represent thicks. .........................................................................44

Figure 18: Seismic line across the Aguaytia structure showing the presence of salt (?) within an Andean inverted, early Mesozoic-aged graben. ...........................................................45

Figure 19: Isopach of the Cretaceous in the Ucayali Basin from well control with the significant pinchout (onlap) edges of the Cretaceous sequences highlighted. Note the dramatic thinning of the Cretaceous from northwest to southeast. ..............................................47

Figure 20: Seismic Profile 3 from PARSEP (2002a), extending from the Huallaga Basin (left) to the Ucayali Basin (right) showing the interpreted inverted nature of the Cushabatay High, late Permian-early Triassic half graben......................................................................53

Figure 21: Map of the Shira Mountains (Pajonal High), Pachitea Basin and the Oxapamapa and Ene Basin Fold and thrust Belt showing the major tectonic features (after Elf, 1996a). Elf has divided the Ene Basin into three regions, the northern, central and southern Ene Basins..............................................................................................................................56

Figure 22: Structural profile through the central Ene Basin modeled from the interpretation of seismic line Elf96-09 (after Elf, 1996c). In this region, the principal detachment surface and zone of multiple imbrications, is interpreted to be within the Cabanillas Formation. The Elf interpretation has the western margin of the Shira Mountains as an old high controlled by a series of down to the west normal faults of substantial displacement that acted as a buttress to eastern the advancing thrust front. .............................................57

Figure 23: Magnetic Map (reduced to pole total field) of the Ene Basin showing the contrast in magnetic characteristics been the northern Ene Basin and the Central and Southern Basins across the Tambo Fault zone.....................................................................................58

Figure 24: Evolution of the of the Tambo Fault zone (After Elf, 1996a) Two alternative explanations with the inactive paleogeographic limit scenario being favored...................59

Figure 25: Location of present day seismicity in the Ene Basin and surrounding area (from Elf, 1996c). ...................................................................................................................60

Figure 26: Late Cretaceous Tertiary paleogeography in which the locus of subsidence and deposition was the Maraon Oriente basin area. co, Contaya high; cob, boundary between continental and oceanic crust; csz, Contaya shear zone; cu, Cushabatay high; Cv, Cordillera Vilcabamba range and shear zone; fc, Fitzcarrald anticline; Hu, Huallaga basin; j-n, Jambeli-Naranjal shear zone; MdD, Madre de Dios range; Pr, Progreso basin; s, oil seeps; Sa, Santiago basin; Ta, Talara basin; Tr, Trujillo basin; Uc, Ucayali basin; vu, Vuana fault. (after Tankard 2002). ............................................................................62

Figure 27: Series of three seismic lines aligned on the San Martin Anticline showing the northeast propogation of the thrust front into the southern Ucayali Basin from west to east...............................................................................................................................63

Figure 28: Radar image of western regions of the Ucayali Basin crossed by Section C. Section B is located parallel to D but just off the map to the north. ..............................................65

Figure 29: Seismic SHL-UBA-22 showing the San Martin structure on the South end of the line, and an un-drilled structure just over half way along the line. The two red horizons mark the Cretaceous interval. The blue pick is Top Devonian, the cyan is Basement. ...............72

Figure 30: Pozo Time Structure, Ucayali North...................................................................73

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Figure 31: Base Cretaceous Time Structure, Ucayali North. .................................................73 Figure 32: Copacabana Time Structure, Ucayali North. .......................................................73 Figure 33: Contaya Time Structure, Ucayali North..............................................................73 Figure 34: Pozo-Base Cretaceous Isochron (Ucayali North)..................................................73 Figure 35: Base Cretaceous Contaya Isochron (Ucayali North)...........................................73 Figure 36: Upper Cretaceous Time Structure, Ucayali South. ..............................................75 Figure 37: Base Cretaceous Structure Time, Ucayali South..................................................76 Figure 38: Tarma Time Structure, Ucayali South. .............................................................77 Figure 39: Top Devonian Time Structure, Ucayali South. ....................................................77 Figure 40: Basement Time Structure, Ucayali South. ..........................................................78 Figure 41: Cretaceous Isochron, Ucayali South. ..................................................................79 Figure 42: Upper Cretaceous Tarma Isochron, Ucayali South. ...........................................80 Figure 43: Lower Paleozoic Isochron, Ucayali South............................................................80 Figure 44: Seismic Lines rep35-124, 126 and 128 (top to bottom), over the channel feature

discussed in the text. Note the high amplitude event in the middle of the channel on line 126...............................................................................................................................81

Figure 45: Cretaceous channel Isochron, Ucayali South. ......................................................82 Figure 46: TWT Map on Base of Cretaceous along the Runuya/Rio Caco/Tamaya anticline

showing the undrilled structure remaining at Rio Caco Sur..........................................88 Figure 47: Seismic line across the Rio Caco structure highlighted on the preceding Figure. .....89 Figure 48: Location of Seismic Line CP739801...................................................................89 Figure 49: Seismic line CP739801 through the CSPL lead, a Pucar play where high energy

carbonates are expected to have been deposited over a Copacabana erosional high. The upper section is a time section, the middle section is flattened on the Base Cretaceous and the bottom section is flattened on the Pucar. .............................................................90

TABLES Table 1: Seismic surveys used in the Ucayali study .............................................................68 Table 2: Wells used for synthetic seismogram ties (Ucayali South).........................................69

ENCLOSURES Hardcopy

1. Ucayali Basin Location Maps a. Location map of blocks, wells, and seismic b. Location map of cross-sections, wells, and seismic c. Location map of geological profiles, Enclosures 2(a to c) wells, and seismic

2. Geological Maps of the Ucayali to Madre de Dios Basins with wells and seismic a. Northern Ucayali Basin (southern Maraon Basin, Huallaga Basin, Contaya

Arch) b. Central Ucayali Basin (Oxapampa, northern Shira Mountains, La Colpa) c. Southern Ucayali and Ene Basins (southern Shira Mountains, Camisea) d. Northern Madre de Dios Basin (Karene, Cariyacu, Brazilian and Bolivian

Borders) e. Southern Madre de Dios Basin (fold belt, Candamo 1X)

3. Geological Profiles

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a. Structural Section A-A' from SW to NE (Fold thrust belt, SE Cushabatay High, Santa Clara, Orellana)

b. Structural Section B-B' from SWW to NEE (Fold thrust belt, Pisqui area, Cashiboya south)

c. Structural Section C-C' from W to E (Fold thrust belt, Aguaytia, Moa Divisor) d. Structural Section D-D' from W to E (Fold thrust belt, Chio, Agua Caliente,

East Tamaya) e. Structural Section E-E' from W to E (Oxapampa Area, Shira mountains) f. Structural Section F-F from SSW to NNE (Camisea, Panguana)

4. Northern Ucayali Basin Seismic Maps a. TWT time structure Map Pozo b. TWT time structure Map Base Cretaceous c. TWT time structure Map Cabanillas d. TWT time structure Map Contaya e. Isochron Pozo to Base Cretaceous f. Isochron Base Cretaceous to Contaya

5. Southern Ucayali Basin Seismic Maps a. TWT time structure Map Upper Cretaceous b. TWT time structure Map Base Cretaceous c. TWT time structure Map Tarma d. TWT time structure Map Top Devonian e. TWT time structure Map Basement f. Isochron Cretaceous g. Isochron Upper Cretaceous to Tarma h. Isochron Top Devonian to Basement

Digital (only for requesting)

6. Maraon Basin SEGY Data on Exabyte Tape 7. CDs containing

a. Report b. Appendices and Enclosures

APPENDIX Hardcopy

1. Wells drilled in the Maraon Basin and their status 2. Cross sections across the Maraon Basin

a. Section 1: Orellana to Cashiboya Sur b. Section 2: Orellana to Panguana c. Section 3: Pisqui to Chonta d. Section 4: Coninca to San Martin e. Section 5: Pisqui to Mina San Vicente Area f. Section 6: Chio to Cashiboya Sur g. Section 7: Chio to Shahuinto h. Section 8: Mina San Vicente Area to Shahuinto i. Section 9: Camisea Pongo Mainique to Panguana j. Section 10: Shahuinto to San Martin k. Location Map of Stratigraphic Cross-Sections

3. Graphical presentation of wells drilled between 1990 and 2002 in the Ucayali Basin and the Camisea Discovery Wells

a. Agua Caliente 31X b. Cachiyacu 1X c. Chio 1X d. Insaya 1X e. Mashansha 1X f. Pagoreni 1X g. Panguana 1X h. Rashaya Sur 1X

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i. San Alejandro 1X j. Shahuinto 1X k. Camisea - Cashiriari 1X l. Camisea - San Martin 1X

Digital (CD - Enclosure 7b)

4. Listing of PARSEP Seismic Lines in SEGY Excel Spreadsheet 5. Access Well Database of Ucayali New Field Wildcats (NFW) Access DB 6. Composite Well Logs LAS Files of Ucayali NFW 7. Northern Ucayali Seismic Interpretation ASCII Data

a. Horizon File b. Fault File

8. Southern Ucayali Seismic Interpretation ASCII Data a. Horizon File b. Fault File

9. Ucayali Basin SEGY Seismic Navigational Data

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EXECUTIVE SUMMARY

Project Description The Ucayali/Ene Basin Report is another in a series of reports generated by PARSEP (Projecto de Asistencia para La Reglamentacion del Sector Energetico del Peru), on the hydrocarbon potential of the Sub-Andean basins of Peru. The methodology is similar to the Maranon and other basinal reports already generated. The data, both well and seismic (from the archives of PeruPetro), was generated in digital format so that the work could be done on computer workstations for speed and efficiency. Geology The Ucayali Basin is one of the sub-Andean Basins of Peru with a prospective area of 105,000 km2 and some 5,000m of sedimentary infill. The Basin borders on the Brazilian Shield to the east and extends 650 km in length south from the Maraon Basin to the Madre de Dios Basin and 250 km in width east from the Fold Thrust Belt to beyond the Brazilian border. In the context of this study, the Ene Basin is considered to be simply a continuation of the thin-skinned deformation front which extends south from the Huallaga Basin and through the Oxapampa wells located directly north of the Ene Basin as it is currently defined. The Ucayali Basin includes thick sedimentary stratigraphic sequences that extend far beyond the present Ucayali Basin and merge with the greater Maraon and the Acre and Solimoes basins in Brazil and eventually pinch out onto the Brazilian and Guiana Shields. The geological evolution of the greater Ucayali Basin area is controlled by two regional tectonic systems recognized in the sub-Andean basins of Peru. The first, the pre-Andean System, encompasses three cycles of Ordovician, Devonian and Permo-Carboniferous ages overlying the Precambrian basement of the Guyana and Brazilian Shields. The second, the Andean System, was initiated with the beginning of subduction along the western margin of Peru. It encompasses several mega-stratigraphic sequences and numerous minor sedimentary cycles, ranging from Late Permian to the Present. The dominant structural form of the Basin is major basement-involved thrusting which in many cases is the result of reactivated Paleozoic normal faults, and along its western margin, it is one of detached thrusts along almost its entirety. The western thrust front can be divided into three segments; the northern Ucayali FTB, the Oxapampa/Ene FTB and the Camisea FTB. The first two are separated by a lateral ramp and the later two are divided by the Shira Mountains. At present, three oilfields (Agua Caliente, Maquia and Pacaya) and five gas-condensate fields (Aguaytia, San Martin, Cashiriari, Pagoreni and Mipaya) have been discovered in the Ucayali Basin. Maquia and Agua Caliente fields are currently the only producing oil fields, with the Pacaya Field being shut-in. Of the four gas condensate fields only Aguaytia is on production although the Camisea fields are under development and expected to be on production in the near future. The main

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reservoirs in the Basin are Cretaceous continental and marine sandstones with subordinate Upper Permian lacustrine, eolian and restricted marine sandstones. Wells Standardized composite well logs were generated for all the wells with available logs, and used to create a grid of cross-sections over the Basin. Approximately 40 wells were used in this study. Seismic As the well coverage in this basin is relatively sparse, the study is largely driven by seismic interpretation. This meant that the seismic data had to be loaded onto workstations for interpretation. Upon doing so it was found that several of the data sets did not tie properly. A considerable amount of time was lost in analyzing the errors and correcting the positional data to a standard datum in this case, a UTM WGS-84 grid and re-loading all the data. The seismic data was interpreted in two sections, designated Ucayali North and Ucayali South. The northern half was interpreted and mapped using Kernel Technologys WinPics software on a PC platform; Ucayali South was interpreted and mapped on Schlumberger GeoQuest IESX software on a Sun Platform running in a UNIX environment. Interpretation The interpretation for the Ucayali project is supported by ten regional stratigraphic cross sections, designed to include almost all the wells in the Basin and six regional structural profiles. A total of ten two-way time structure maps were generated from the geophysical interpretation, along with six Isochron maps. An attempt has been made within the time framework of this study to produce a standardized stratigraphic column for the Ucayali Basin. This attempt has been partially successful, but there are still a number of unanswered questions that may form the basis of further study. The Ucayali/Ene Basin Study was intended to be a regional work, integrating as much data as possible within the Basin to investigate whether new exploration concepts, etc., could be defined. It was not intended to be an exploration exercise where the ultimate goal is in defining drillable prospects. Ultimately however, in a study such as this, certain prospects and leads do emerge. During the process of this evaluation two structural prospects and two stratigraphic leads were defined. It should be noted that there are numerous other structural leads in the Basin and these have been well documented in other Perupetro reports. The two stratigraphic leads, the Mashansha Channel Play and the Cushabatay South Pucar play, on the other hand are new concepts and believed to be only partially representative of what can be found when a concentrated effort in exploring for stratigraphic traps is applied.

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1.0 INTRODUCTION The Southern Sub-Andean Basin Project is the last of several by the PARSEP Group on the evaluation of the hydrocarbon potential of the Sub-Andean Basins of Peru. PARSEP is an acronym for Proyecto de Asistencia para La Reglamentacin del Sector Energtico del Per and is a joint venture between the governments of Peru and Canada. The parties comprising PARSEP are: the Canadian International Development Agency (CIDA), the Canadian Petroleum Institute (CPI), Teknica Overseas Ltd. (TOL), and PERUPETRO. The technical work on this project is being done by personal from TOL and PERUPETRO. The basins evaluated previously were in Northeastern Peru, and included the Huallaga, Santiago and Maraon Basins. Figure 1: Area of investigation of the PARSEP Group for the Southern Sub-Andean Basins of Peru. This phase of the project was originally proposed to complete three independent studies on the Ucayali, Ene and Madre de Dios Basins. The Ene Basin after reviewing the regional geology, however is considered for all intensive purposes to be part of the Ucayali Basin by the PARSEP Group and consequently its evaluation has been incorporated within contents of this study. There was a debate whether to include the Madre de Dios Basin as well but it was ultimately decided to do a separate report on this Basin. This restructuring has resulted in this PARSEP study being called the Ucayali/Ene Basin Technical Report

Southern Sub-Andean Basins of Peru Study Area

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Unlike the previous PARSEP studies, the one on the Ucayali/Ene Basin is not as complete an evaluation as the one done for the Maraon Basin (PARSEP 2002) in that certain sections such as geochemistry, basin modeling and prospective areas have been reduced or omitted. The emphasis of the last years work has been on data gathering, quality controlling and correcting the data, and in defining the stratigraphic and structural framework of the Basin. Despite receiving critical data sets needed for the interpretation within the last month of the study to complete this analysis, most of these objectives have been met. This study represents an excellent staging point from which a more detailed examination of the Basin can be continued. All the SEGY data utilized in this project was supplied by Perupetro and was interpreted primarily utilizing a Schlumberger GeoQuest UNIX based seismic interpretation software and with Kernel Technologys WinPICs PC based seismic interpretation software. The seismic data was tied (bulk-shifted, phase rotated and amplitude-tied) utilizing Kernel Technologys SMAC software. On the geological side, Geographixs and DigiRule software were used extensively for mapping, well log preparation and cross-section construction. Microsoft Access was utilized to design a standardized, exportable well database in the same format carried forward from the previous PARSEP Studies. The PARSEP Team would like to thank Perupetro, CPI and Teknica for their technical and logistical support on this project and CIDA for making this project a possibility through their financial support.

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2.0 SCOPE OF PROJECT When this project was initiated it was intended to be a regional geological and geophysical evaluation of the southeastern Peruvian Sub-Andean Basins focusing on the identification of new play types. It was hoped not to be a rework of previous Ucayali/Ene Basin studies of which there have been a number of excellent ones. The focus was to examine the Basin in slightly a different manner than others had before in the past. The manner in which to do this was though the interpretation of a seamless digital seismic and well data set, with each being tied to one another combined with an analysis of the exploratory drilling history in the Basin since 1990. Supplementing the work done by the PARSEP Group were two additional studies:

1. Geochemical: by Hans Von Der Dick, ChemTerra International Ltd. 2. Tectonic: by Tony Tankard, Tankard Enterprises

Although both of these studies were originally initiated for the Maraon Basin study (PARSEP, 2002), they were sufficiently regional in nature to have application for this evaluation of the Ucayali Basin. One of the more time consuming aspects of this evaluation was the standardization and quality control of the data. Digital curve data was compiled and corrected for each of the New Field Wildcats in the Basin (Figure 2). A composite log for each well was constructed, which if available included a Caliper, SP, Gamma Ray, Deep and Shallow Resistivity, Density, Neutron and Sonic curve. These composite logs are available as an LAS file as part of this report. A series of 9 cross-sections were strung across the Basin to standardize the stratigraphy that was to be utilized in the geological mapping module of this project. Where possible, a synthetic for each of the wells was made and tied to seismic. A standardized well database in Access was developed in which is included every new field wildcat well in the Basin with standardized well tops, and other information when available was input. The principal seismic data set utilized and interpreted in the project consisted of over 14,000 kilometers of 2D SEGY data, which represents coverage throughout most of the Basin (Figure 2). Perhaps one of the more notable accomplishments of this study was in the assemblage of this data set. Seismic data acquisition on this project began in November 2001 and has continued on through to the time of this writing. Clearly the lack of readily accessible data in the earlier stages of this project was a major roadblock for the group with respect to the completion of this study. A further complication was the realization that after 50% of the data had been loaded and partially interpreted on the workstation, was that the navigational data supplied to the group was incorrect. To correct this Perupetro brought in a contractor to correct the errors by going back to the original field records and maps. All data was then standardized to a UTM WGS-84 grid, and reloaded. Despite all these quality control steps, the data set although much better than what was previously available, is far from being perfect. One of the current discrepancies is between wells and seismic locations as there is not an exact 1 to 1

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Figure 2: Location of the Seismic and Wells utilized in the study of the Ucayali Basin

Mashansha 1X

Agua Caliente 1A

Aguaytia 1X

Aguaytia Sur 4XD

Amaquiria 1X

Cachiyacu 1X

Cashiboya 1A

Cashiboya Sur 1X

Cashiriari 3X

Chio 1X

Chonta 1X

Coninca 1XConinca 2X

Huaya 3X

Huaya 4X

La Colpa 1X

Maquia 1X

Mipaya 1X

Tiruntan 1X

Insaya 1X

Inuya 1X

Rayo 1X

Rio Caco 1X

Runuya 1X

San Alejandro 1X

Sanuya 1X

Sepa 1X

Shahuinto 1X

Neshuya 1X

Oxapampa 07 1Oxapampa 07 2

Oxapampa 17C 1

Oxapampa 19 1Oxapampa 19 2

Pacaya 1X

Pagoreni 1X

Panguana 1X

Pisqui 1X

Platanal 1X

Rashaya Sur 1X

San Martin 1X

Santa Clara 1XSanta Clara 1A

Tahuaya 1X

Tamaya 1X

Zorrillo 1X

Agua Caliente 1X

Armihuari 4X

0 km 50 km

0 Miles 30 Miles

Camisea Fold and Thrust

Huallaga Northern Ucayali Fold and Thrust

Belt

Shira Mountains

Oxapampa/ Ene Fold and Thrust

Belt

Ene Basin

14

correlation. Well coordinates were obtained from a multitude of sources utilizing different grid systems. After converting the locations to a UTM WGS-84 grid, a best-fit approach was taken utilizing various data sets as certain groups of wells from one data set fell nicely on seismic line intersections in one part of the Basin and not in another. Clearly this is an issue that needs to be addressed in future studies. As mentioned previously, the study as it was originally proposed was to include separate reports on the Ene and Madre de Dios Basins. Within the Ene Basin there are only six seismic lines available all showing considerable structuration as a result of intense imbricate faulting and consequently there was little in which to support a separate report. In the context of this study, the Ene Basin is considered to be simply a continuation of the thin-skinned deformation front which extends south from the Huallaga Basin and through the Oxapampa wells located directly north of the Ene Basin as it is currently defined. This thrust front in part overrides the Shira Mountains, an older positive feature, which ultimately dissects the front, separating the Oxapampa-Ene segment from the Camisea segment. As such, the Ene Basin and Ucayali Basin analysis has been incorporated into one single report. Figure 3: Location of Madre de Dios Basin area and the available seismic data (in red) The Madre de Dios Basin (Figure 3) however is somewhat more isolated from the Ucayali than is the Ene Basin as well as being seismically disconnected (no real contiguous data sets) from it as well. As a result this Basin will be covered within its own separate report. The well data sets (Las and Access) of the Madre de Dios Basin, however is included within the Ucayali data set on CD in the Appendices of this report.

Karene 1X

Los Amigos 1X

Mipaya 1X

Pagoreni 1X

Panguana 1X

Pariamanu 1X

Puerto Primo 1

San Martin 1X

Sepa 1X

Armihuari 4X

Candamo 1X

Cariyacu 1XCashiriari 3X

Candamo 1X Well

15

3.0 PREVIOUS WORK IN THE STUDY AREA Drilling activity in the sub-Andean Basins of Peru began in 1937 with the drilling of Ganso Azul #1 to test the Agua Caliente surface structure located in the Ucayali Basin. This well discovered oil pay in the Cretaceous Cushabatay Formation at 311 meters. The well was twinned and flowed 2000 BOPD of 43o API oil with an open choke. Five more wells were drilled on the structure eventually proving up 14.7 MMBO. Subsequent to the development of the Agua Caliente Field, during the 40s and 50s, numerous companies were doing fieldwork in the sub-Andean Basins of Peru and as a result several more wells were drilled. The next discovery, however, was not until 1957 with the discovery of the Maquia Field. This was made by the El Oriente Oil Company just west of the Contaya Arch in the northern Ucayali Basin. This small field (20 MMBO) was put on stream with the 37o API oil being barged to refineries in Iquitos and Pucallpa. Contemporaneously with this discovery, the Cerro De Pasco Petroleum Corp. drilled five dry holes with gas shows near Oxapampa within the Ucayali fold and thrust belt to the west of the Shira Mountains. During this time in 1962, Mobil made a gas condensate discovery with Cretaceous reservoirs at Aguaytia in the central Ucayali Basin. This field did not live up to its initial promise and plans for a gas pipeline to Lima were cancelled. Through most of the remainder of the 60s and into the early 70s, exploration was virtually none existent as the petroleum concession system had been annulled by decree. By the beginning of the 1970s the Peruvian Sub-Andean production from Maquia and Agua Caliente, at 2,500 BOPD, comprised less than five percent of the countrys output. The Sub-Andean Basins of Peru in 70s saw a renewed interest in exploration with significant discoveries being made in the Maraon Basin of northeastern Peru and the Oriente Basin of Ecuador. During this time, six exploratory wells were drilled in the Ucayali Basin, one each by El Oriente and Hispanoil and four by Burmah Oil. All were D&A. To the south of the Ucayali Basin in the Madre de Dios Basin, in the mid-70s, Cities Service and Andes Petroleum shot seismic and between them drilled five dry holes. In the southern Ucayali Basin, Shell Oil in 1978/80 after extensive field geological studies, signed blocks 38 and 42. Their first well within the foreland area of Basin, Sepa 1X recovered a small amount of oil from the Carboniferous before it was ultimately abandoned. This was followed up with the San Martin 1X well within the fold and thrust belt of the Ucayali in 1983 which flowed 41 MMCFGPD Gas and 1,626 BCPD from a Cretaceous/Permian section. The next wildcat by Shell, Cashiriari 1X was drilled in 1986 and flowed 56.7 MMCFGPD and 1,553 BCPD from a section similar to that tested by the San Martin 1X well. One appraisal each of these two fields was drilled indication reserves over 8 TCF gas and 300 MMB condensate, with considerable upside. Shell also made several other gas discoveries afterwards but nothing replicating the success of the San Martin and Cashiriari discoveries. By 1988, however, Shell had been unable to reach an agreement with respect to developing these discoveries and ceased all exploration activities. At this time, Shell

16

also relinquished the Madre de Dios Basin foothills acreage where they have recorded 500 km of seismic. Other activity in the Basin during the 80s included 4 wells by Petroperu and 2 by Occidental Petroleum. Despite the occurrence of significant oil shows in several of these wells, all were plugged and abandoned. The 90s saw Petroperu drill their last well in the Basin, the Cachiyacu 1X well in the northern Ucayali Basin in 1992. Shortly there afterwards, the legal framework, which currently governs the exploration and exploitation of hydrocarbons, was passed in August 1993 allowing companies to operate under either a Service or License contract. In November 1993, the Peruvian government set up a new state agency, Perupetro, to deal with contract negotiations, on the governments behalf, talking over Pertroperus former role. As a result, industrys interest in Peru was heightened and several new blocks were signed. Activity further increased in 1996, which also saw the initialization of the privatization process of Petroperu. Although never completed, Petroperu sold all their producing properties and left the upstream sector. Drilling and leasing remained active through the rest of 90s. Six exploratory wells were drilled during this time with no success. During this time Shell returned to once more make an attempt of making the Camisea project a reality, which included the drilling of the Pagoreni 1X gas/condensate discovery well in the area, but negotiations broke down with the government, and Shell abandoned the project. The concession containing the giant Camisea gas project was won by Pluspetrol in the year 2000. They have worked since then on bringing the project closer to production. The only exploratory well drilled in the Basin was done so by Repsol in the central portion of the Basin in 2002. It was plugged as a dry hole with oil shows in the Paleozoic section. A chronological listing of new field wildcats drilled in the Ucayali Basin is presented in Appendix 1.

17

4.0 GEOLOGY OF THE UCAYALI/ENE AREA 4.1 GENERAL BASIN DESRIPTION The Ucayali Basin is one of the sub-Andean Basins of Peru (Figure 1) with a prospective area of 105,000 km2 and some 5,000m of sedimentary infill. The Basin borders on the Brazilian Shield to the east and extends 650 km in length south from the Maraon Basin to the Madre de Dios Basin and 250 km in width east from the Fold Thrust Belt to beyond the Brazilian border. It has been discontinuously explored since 1939 with much of the basin still remaining under-explored. Seismic and well data indicates that an almost complete composite sedimentary section of Paleozoic, Mesozoic and Cenozoic ages was deposited in the Basin. However, the Basins present configuration shows a discontinuous preservation of the pre-Cretaceous sedimentary succession overlying the crystalline Basement revealing a complex tectonic evolution that involved most phases of the Caledonian and Hercynian pre-Andean and Andean aged tectonic events. The sedimentary fill of the Ucayali Basin is fairly similar to the southeast Maraon Basin, comprising up to 3000m of Tertiary continental molasses clastics overlying westerly thickening wedges of mainly marine Cretaceous Jurassic and Triassic, and an extremely variable section of Paleozoic. The principal difference between the two basins are; a) the thinning of the Cretaceous section from north to south as it onlaps a progressively elevated Paleozoic section (Figure 19), and b) a dramatic thickening of the Paleozoic section through a southerly thickening of Devonian and a Carboniferous Ambo section, and increased erosional preservation of Permian sediments beneath the Cretaceous unconformity. The dominant structural form of the Basin is major basement-involved thrusting which in many cases is the result of reactivated Paleozoic normal faults, and along its western margin, it is one of detached thrusts along almost its entirety. The western thrust front is interrupted north of the Oxapampa area by an inferred lateral ramp with the northern section being offset to the west, and south of the Ene Basin by the Shira uplift, which separates it from the Camisea Fold and Thrust Belt (FTB). This later segment contains the giant Cashiriari and San Martin Gas Fields. For clarification purposes, this study considers the Ene Basin to be just a continuation of the Oxapampa fold belt west of and abutting against the Shira Mountains to its east. At present, three oilfields (Agua Caliente, Maquia and Pacaya) and five gas-condensate fields (Aguaytia, San Martin, Cashiriari, Pagoreni and Mipaya) have been discovered in the Ucayali Basin. Maquia and Agua Caliente fields are currently the only producing oil fields, with the Pacaya Field being shut-in. Of the five gas condensate fields only Aguaytia is on production although the Camisea fields are under development and expected to be on production in the near future. The main reservoirs in the Basin are Cretaceous continental and marine sandstones with subordinate Upper Permian lacustrine, eolian and restricted marine sandstones. Despite the insignificant current oil production (approx 600 bopd) from three small oil and gas fields, the presence of the giant Camisea Field (13 TCF of gas and over 500

18

MMBC) in the southernmost part of the Basin has offered sufficient encouragement to keep companies exploring for hydrocarbons in the Basin. Many large structures are still untested and the presence of light oil shows encountered in the majority of the wells mark this region as one of the more promising onshore areas in Peru. The available data appears to indicate that the lower Paleozoic section has fair reservoir potential and some possible oil source potential (Cabanillas) in parts of the Basin, which has not been adequately tested. The Upper Paleozoic section (Carboniferous and Permian) exhibit good source rock potential in the shales of the Ambo Group and Ene Formation, and fair to good reservoir quality potential in the sandstones of the Ambo and Tarma Groups (Green Sandstones) and Ene Formations. The Mesozoic section, although thinning from north to south, also has good quality reservoirs within the Oriente Group and Chonta and Vivian Formations. 4.2 REGIONAL GEOLOGY The Ucayali Basin includes thick sedimentary stratigraphic sequences that extend far beyond the present Ucayali Basin and merge with the greater Maraon and the Acre and Solimoes basins in Brazil and eventually pinch out onto the Brazilian and Guiana Shields. The geological evolution of the greater Ucayali Basin area is controlled by two regional tectonic systems recognized in the sub-Andean basins of Peru. The first, the pre-Andean System, encompasses three cycles of Ordovician, Devonian and Permo-Carboniferous ages overlying the Precambrian basement of the Guyana and Brazilian Shields. The second, the Andean System, was initiated with the beginning of subduction along the western margin of Peru. It encompasses several mega-stratigraphic sequences and numerous minor sedimentary cycles, ranging from Late Permian to the Present. The stratigraphic column that has been used by PARSEP in the Ucayali Basin is representative of all NE Peru and is presented in Figure 4. 4.2.1 Pre-Andean System The pre-Andean tectonic cycle includes Ordovician, Silurian, Devonian and the Permo-Carboniferous cycles all overlying crystalline/metamorphic Basement. This tectonic system preserved discontinuous successions of Ambo/Cabanillas/Contaya and a more continuous Tarma/Copacabana/ and Ene/Red Bed Groups which reveal complex tectonics that includes a possible pre-Cabanillas rifting and peneplanation and a late Permian uplift and erosional episode. Ordovician aged sediments initiate the pre-Andean cycle and are represented by the siliciclastic Contaya Formation. In NE Peru, as found within the Maraon Basin, the Contaya Formation has a thickness of up to 150m. A maximum thickness of 4500m, however, has been reported for the cycle in the Eastern Range of southern Peru. The Contaya Formation outcrops in the Contaya Mountains of the northern Ucayali Basin. Although not within the studied basins, next in the succession is the Silurian, which is represented by argillites, flysch and tillites, and can reach thicknesses up to 1000m in southern Peru (Laubacher, 1978). The Silurian cycle merges with that of the Devonian, which is comprised of sediments of the Cabanillas Group. Cabanillas aged sediments have been deposited in the Madre de Dios, Ucayali and Maraon Basins.

19

Figure 4: Stratigraphic Columns for the Sub-Andean Basins of Peru, highlighting the Ucayali Basin In the south of Peru, Devonian sediments reach thicknesses of up to 2000m, while in northern Peru, the maximum thickness attained is 1000m. Unlike the Maraon Basin, rocks of Devonian age are quite extensive in the Ucayali Basin, particularly in its southern half and have been encountered in a number of wells, and thick sequences can be seismically identified in the South-Central Ucayali Basin. An example of such is shown in Figure 5 where up to 600 msec of Devonian sediments (and possibly older) can be mapped within a series of isolated half grabens.

Oxy PetroperuQ Corrientes

Upper Red Maraon Capas Rojas Beds Pebas Superiores

Chambira ChambiraPozo Shale Pozo Shale Pozo Shale Pozo Shale Pozo ShalePozo Sand Pozo Sand Pozo Sand Pozo Sand Pozo Sand

Santiago SS Lower Red Capas Rojas Beds Inferiores

Upper Vivian Basal Tertiary Upper Vivian Casa BlancaHuchpayacu Huchpayacu HuchpayacuCachiyacu Cachiyacu Cachiyacu

Lower Vivian Vivian Lower Vivian Vivian VivianPona

Lupuna Upper Cetico

Chonta Lmst Chonta Lmst CalizaChonta Sand

Low ChontaSdBasalChontaSd

Raya Raya Raya Raya

Cushabatay Cushabatay Cushabatay Cushabatay

Condorsinga Condorsinga CondorsingaAramachay Aramachay AramachayChambara Chambara Chambara

Red Upper SS Fm Bed Mid Mudstone Fm

Group Lower SS Fm (2)Shinai MemberNoipatsite MbrEne SS Mbr

Copacabana CopacabanaTarma Tarma

DEV Cabanillas Cabanillas Cabanillas

OR

D Contaya Contaya Contaya Contaya

Ene

Cabanillas

Pucar (Pongo Mainique)Puca

r

Ambo

Cabanillas

Copacabana /TarmaGreen Sandstone

Ene Ene

Agua Caliente (1)

Absent

Sara

yaqu

illo

Red Beds

Evaporitic Unit

Agua CalienteAgua CalienteAgua Caliente

UcayaliCorrientes

AG

E

PARSEP

NE Peru

Maraon

Huallaga

Santiago

Parsep

Ipururo

Pozo

Pozo

Cachiyacu

PebasChambira

Yahuarango Yahuarango

TER

TIA

RY

Maraon Lo

wer

Puc

a

Yahuarango

Nieva

Upper Puca

Pozo

CR

ETA

CEO

US

Viv

ian

CachiyacuCachiyacu

Cho

nta

Upper Chonta Chonta shaleChonta

Agua CalienteAgua Caliente

Sarayaquillo

Chonta

Lower Chonta Lower Cetico

Raya

Cushabatay

Agua Caliente

TRIA

S

Evaporit ic Unit

Puca

r Pucar

JUR

AS

Sara

yaqu

il l

Red Beds Sarayaquillo

Sara

yaqu

illo

Red Beds

Ambo Ambo

Cabanillas

PER

M

CopacabanaCopacabana

Copacabana /Tarma

Ene Ene

Mitu

Contaya

CA

RB Tarma

Ambo

Cachiyacu

Vivian

Chonta

Cushabatay

Ambo Ambo

Lower Vivian

Chonta

Pucar

Sarayaquillo Sarayaquillo

Mitu

Raya

Cushabatay

Copacabana?

Pucar Pucar

Evaporitic Unit

Puca

r

Mitu Mitu

Ene Ene

Basement

Contaya

Ene

Mitu Mitu Mitu

Copacabana /TarmaGreen Sandstone

Ambo

Yahuarango

Upper Vivian

Cachiyacu

PARSEP

Ucayali South

Yahuarango

(1) Basal Chonta + Upper Nia Kaatsirinkari (2) Low er Nia Kaatsirinkari

PARSEP Ucayali North

and Ene

IpururoChambira

Chonta

Lower Vivian

Pozo ShalePozo Sand

Upper Vivian

20

Figure 5: Composite seismic line through the South-Central portion of the Ucayali Basin showing a) the magnitude of the Devonian-Ordovician (?) rift Basins, b) the onlap relationship of the Carboniferous Ambo onto the Eohercynian Unconformity, and c) the truncation of the Paleozoic sequences beneath the Nevadan Unconformity at the Base of Cretaceous

21

Figure 6: Seismic Line in the south central Ucayali Basin showing a significant amount of erosion on the pre Ambo sequences (Devonian) beneath the Eohercynian Unconformity (dk. blue reflector).

22

In Late Devonian, the large Arequipa granitic terrain docked into the western South American Continent. The Pisco Abancay deflection is more or less coincidental with the north boundary of this block and the southern boundary is in turn marked by the Africa deflection in northern Chile (Anadarko, 1999). The docking of this large terrain probably produced the Eo-Hercynean compression in the Late Devonian and resulted in a major unconformity underlying sediments of Carboniferous age (Figure 6). The Eo-Hercynean compressional event affected the Ucayali Basin directly as it produced a swarm of northsouth oriented faults. Many of them are left lateral transpressive, and accommodated the Arequipa Massif as it docked into place. These north-south faults are very important as they established the structural grain of the weakness in the basement of the Ucayali Basin and have been reactivated in one fashion or another every time the area was subject to diastrophism. For instance the north-south grain has been affected by structural inversion through wrenching, caused by Andean compressive episodes in the Late Cretaceous and Tertiary. The Permo-Carboniferous is next in the succession and is found resting unconformably over the Devonian Cycle (Figure 6) and/or Ordovician sediments and Basement in the uplifted areas. Rocks of this age have a widespread distribution throughout the Andean Range, the subsurface of the Peruvian eastern basins, and in the Brazilian Acre and Solimoes Basins. In the Peruvian basins, the earliest Carboniferous sedimentation began with the Ambo Group, which was deposited as continental to shallow marine, fine-grained sandstones, with interbedded siltstones, gray shales, and occasional thin coal beds. These sediments are followed vertically by the thin transgressive, clastic-rich Tarma Formation, which is overlain, usually conformably, by the normally thick, massive shelf carbonates of the Copacabana Formation. The Tarma-Copacabana Group is widely distributed in most of the Andean basins. It is predominantly a marine carbonate sequence although the cycle begins with a basal fine- to coarse-grained sandstone, the Green Sandstone Unit. This is overlain by a thick sequence of dark gray, fossiliferous limestones (wackestones, packstones and grainstones), and thin interbeds of dark gray shales and anhydrites. The unit contains several intervals with characteristic fusulinid forams of Permian age. The Copacabana limestones covered most of Sub-Andean Peru with the exception of the Contaya Arch and several other structural highs, where the Cretaceous overlies rocks of lower Paleozoic age. The Copacabana Formation in turn, was conformably overlain by the Ene Formation, a sequence containing black organic rich shales, dolomites and minor sandstones. 4.2.2 Andean System The Andean System was initiated simultaneously with the beginning of subduction along the Pacific margin. A major change in the tectonic regime along the northwestern border of the South-American plate promoted isostatic rearrangements. In a global scale, the initial phase of the Andean System developed during the Pangaea break up (M. Barros & E. Carneiro, 1991). The development of the Andean subduction zone during late Permian to early Triassic times is supported by geological information gathered by Audebaud, et. al. (1976) along the Peruvian Eastern Range, where they recognized a Permo-Triassic continental volcanic arc. The volcanic Lavasen Formation, which is seen in outcrops unconformably underlying the Mitu

23

Group to the west of the Huallaga Basin (Serie A: Carta Geologica Nacional, INGEMMET Bulletin No. 56, 1995) could be a remnant of this arc. The Lavasen Formation is also found intruding older rocks such as the Ambo Formation. Its lower member is a volcanic-sedimentary sequence with interbedded red clastics. The upper member is comprised of thick lava flows and breccias. In a study done for PARSEP on the Tectonic Framework of Basin Evolution in Peru (A. Tankard, 2001), Tankard correlates the Juru Orogeny with the onset of our above-defined Andean System. Towards the end of the Permian, relaxation of the earlier extensional basin forming stresses that culminated in the deposition of the late Permian aged Formations were interrupted by a regional uplift and a pronounced unconformity that marks a first order sequence boundary after Ene-Red Bed Group accumulation. This event is believed by Tankard (2001) to correspond to the Juru event identified in the Acre and Solimoes Basins of the Brazilian upper Amazon. Tankard (2001) describes a three-part cycle of basin formation and sedimentation that is repeated throughout the Phanerozoic of South America. Typically each cycle consists of (1) an early phase of rift-controlled subsidence and deposition of relatively coarser-grained clastics, (2) abandonment of individual fault controlled subsidence and yoking together of the various depocenters into a shallow epeiric basin, and deposition of a widespread cover of finer clastics and potential petroleum source rocks, and (3) a marked change in the stress fields resulting in structural inversion, uplift and Orogeny. The Late Permian Middle Jurassic tectono-stratigraphic cover accumulated in a compartmentalized basin complex. This is demonstrated seismically in Figure 7 and in map form, in Figure 8 (Late Triassic Middle Jurassic). The cover succession consists of Mitu red beds in isolated rift segments, accumulation of finer-grained Pucar clastics, limestones and evaporites, and termination in the widespread Sarayaquillo blanket. Initiation of subsidence and deposition of the Mitu Formation is attributed to a process of orogenic collapse following the late Hercynican Juru Orogeny. A regional supratidal sabkha environment developed at the transition between the Pucar and Sarayaquillo Formations, which marks the beginning of the continental and shallow marine deposition. Of stratigraphic significance to the western Ucayali/Ene Basin area is the evaporitic unit associated with the sabkha deposition. This unit has been tentatively named the Callanayacu Formation by Advantage who completed extensive fieldwork in the fold and thrust belt between the Huallaga and southern Maraon Basins (Advantage 2001). In the Peruvian Fold and Thrust Belt this evaporitic unit can be traced over a distance of at least 700 km. These deposits were intersected in subsurface by the Oxapampa 7-1 and Chio 1X wells in the central part of the Ucayali Basin (Appendix 2e to 2h), and by the Putuime 1X well of the Santiago Basin in its north. In between, extensive deposits of evaporites have been identified in outcrop in the Huallaga Basin, and in the Fold Thrust Belt of the westernmost Ucayali Basin. With further regression of the Jurassic sea the Pucar and Callanayacu Formations were overlain by Middle to Late Jurassic continental red beds of the Sarayaquillo Formation.

24

Figure 7: Seismic line OR-95-08 in the northern Contaya Arch area showing the evolution of a Late Permian to early Mesozoic extensional basin through the use of different datums (flattenings) (after PARSEP, 2002)

Unflattened section

Flattened on Base Cretaceous Unconformity

Flattened on Pucar Formation

Mitu

Mitu

Mitu Ene

Ene

EneCopacabana

Copacabana

Copacabana

Pucar

Pucar

Pucar Sarayaquillo

Sarayaquillo

Sarayaquillo Cretaceous

Cretaceous

Cretaceous

25

Figure 8: (After Tankard, 2001) Late Triassic Middle Jurassic paleogeography. The locus of sedimentation was the extensional tract between the Contaya (csz) and Shionayacu (ssz) shear zones. Isopachs show that the stratigraphy terminated abruptly against NE-striking faults, and for this reason they are described as basin sidewall faults. psz, Pucalpa shear zone; sol, Solimoes Basin.

26

Termination of the Sarayaquillo deposition coincides with the later part of the Jurassic, which is represented by the regional Nevadan unconformity over which lies sediments of Cretaceous age. This is a boundary generally well recognized on seismic, below which the Jurassic is seen to thicken westward and locally subcrop with considerable angularity. Cretaceous deposition was initiated in the greater Maraon/Ucayali Basin during Neocomian-Aptian times and was characterized by a westerly thickening wedge of fluvial to marginal clastics occasionally punctuated by carbonate sedimentation. The Cretaceous epeiric sea deposition terminated during the Late Cretaceous with the arrival of the first pulses of the Andean Orogeny (Peruvian and Incaic Phases) at which time through to Middle Eocene time, molasse-styled deposition dominated the Basin. This was punctuated during the Late Eocene to Early Oligocene by a marine transgression that resulted in the deposition of the Pozo Formation, which is restricted to the northern basins and to the north Ucayali. Molasse deposition resumed in the Late Oligocene, which culminated during the Miocene Quechua deformation and has continued through to the present. 4.3 GEOLOGY OF THE UCAYALI/ENE PROJECT AREA 4.3.1 Project Overview PARSEP constructed a digital database from geological/geophysical data gathered from an extensive set of old and recent exploration activities that were made available to the group through the Perupetro technical archives. It was this database that was updated and subsequently used as the basis for the geological interpretation of the Ucayali/Ene Basin. The main database consists of wire-line logs and data from 40 new field wildcats and over 15,000 km of 2D seismic data. The seismic data set provided for the Ene Basin was of an earlier processed version than the one used by Elf in their evaluation of the Block 66 and was of considerably less quality. As a result, the Elf interpretation was utilized for the evaluation of the Ene Basin area. The Ucayali project is largely comprised of five subprojects: a) Collection and standardization of geological information; b) The stratigraphic cross-section grid project utilizing the data from (a); c) Collection of SEGY seismic data, navigational data corrections and tying the various data sets; d) Geophysical interpretation; and e) Structural profiles.

a) Collection and standardization of geological information Geological well data and tops were collected and put into an ACCESS data base that was used as the preliminary data set for interpretation. This information was gathered from literature and PARSEP correlated well logs. The database was continually updated reflecting changes and additions as the interpretation progressed. The final ACCESS database is included as Appendix 5 in this report and LAS files of the composite wells logs used for the interpretation as Appendix 6. In the Maraon Basin study done by PARSEP (2002), numerous geological maps were created from a similar type database and presented as enclosures in the report. The tectonic style, significant pre-Cretaceous uplifts and erosion, lack of significant well control and the biased sampling of what

27

was tested by those few wells, were not conducive to the creation of meaningful geological maps from well data. As a result, only seismic was utilized for generation of the maps in this project. The one exception was an isopach of the Cretaceous, which was created simply to show the regional thinning of the mapped interval from north to south in the Ucayali Basin. This map is presented in Figure 19 within section 4.3.2.8

b) The stratigraphic cross-section grid project - The cross-section grid consists

of ten regional stratigraphic sections (Enclosure 1b), which was designed to include almost all the wells in the Basin. The sections were created to construct the regional stratigraphic framework of the Basin, particularly within the pre-Cretaceous section and are referred to extensively in the stratigraphy section 4.3.2, and presented as Appendices 2a to 2j in this report.

c) Collection of SEGY seismic data, navigational data corrections and tying the

various data sets This section is discussed in detail in the Geophysics Section 5.0 of this report.

d) Geophysical interpretation The geophysical interpretation was done in two

parts, the northern Ucayali which extends from the southern Maraon Basin to just north of the Oxapampa wells in the western part of the Basin and north of the La Colpa well in the eastern part of the Basin. The division represents a discontinuity in two largely continuous data sets of almost equal size. Additionally, changes in geology between the northern and southern Basins resulted in different reflectors and intervals in both areas to be mapped. In the northern Basin, TWT maps were made on, Pozo, Base Cretaceous, Copacabana, and Contaya and isochrons of the Pozo to Base Cretaceous, Base Cretaceous and Top to Base of the Jurassic salt intervals, while in the south, TWT maps were made on the Upper Cretaceous (near Chonta), Base Cretaceous, Tarma, Devonian and Basement and isochrons Cretaceous, Upper Cretaceous to Tarma and Top Devonian to Basement. These maps are all discussed in detail with the Geophysical Section 5.0 of this report. Three other geophysical maps are included in this report that were done independently of the regional geophysical mapping project. They were a TWT map on the top of the Ene (Figure 12) created largely to show the distribution of the Formation throughout the Basin, an isochron of the Ambo section in the southern Ucayali (Figure 9) to emphasis the probable Ambo source kitchen area for the Camisea area and a lower Cretaceous channel map (Figure 45) in the area of the Mashansha well in the southern Ucayali Basin

e) Structural profile project The structural profile study for the Ucayali/Ene

Area was completed through the compilation of the available seismic data, exploratory wells, geological field data and maps, and the PARSEP seismic mapping. Generally speaking, the six dip sections through the Basin were constructed by tying the geological field data from the Ingemmet quadrangle maps in the Andean fold and thrust belt to the west, with the seismic and well data in the sub-surface of the Ucayali Basin to the East. Additionally, both geological and geophysical interpretations available through various reports within the Perupetro archives were also utilized in areas of minimal PARSEP data coverage. The geological profiles are presented in Enclosures 3a to 3f

28

and discussed in detail in section 4.3.3 . One additional section, (Figure 22) is also presented in this report as a representative structure profile through the Ene Basin, 1f, that has been taken from Elfs Final report on Block 66 (Elf, 1996).

4.3.2 Stratigraphy of the Ucayali/Ene Area One of the intentions of this study was to standardize the stratigraphy of the Ucayali Basin as presented in Figure 4. The most critical and difficult aspect of this exercise was the tying of correlations between the northern Ucayali Basin and the Mainique Gorge/Camisea area of the southern Ucayali Basin. In the later, important modifications were introduced by Shell (1997) within the Permian and Cretaceous stratigraphic sections after the Camisea gas discoveries. The modifications made by PARSEP are in line with our intent to present a consistent digital database to facilitate mapping and interpretation. Discussions are presented where previous assumptions and conclusions were found to be contradictory (or in question) through our evaluation of the data. The intention is to keep the stratigraphy as simple as possible without introducing unknown or contradictory names. Unfortunately, at the termination of this project there are still a number of unanswered questions relevant to stratigraphy that may form the basis for future studies. The composite stratigraphic column present in the Ucayali Basin includes a thick sedimentary succession of early and late Paleozoic, Mesozoic and Cenozoic age (Figure 4) and the stratigraphic cross-sections presented in the report show the widespread distribution of all these units throughout most of the Basin. It is interesting to note, however, that the sections show no single area drilled to date, with a complete stratigraphic section preserved. Where this may be found is in the foredeep area just east of the Fold Thrust Belt west of the Pisqui - Rashaya Sur Aguaytia structural trend, and in the deep basinal area of the northern Ucayali Basin south and west respectively of the Cushabatay and Contaya highs. The Camisea discoveries of the southern Ucayali Basin in the 80s, allowed for detailed stratigraphic studies to be completed that defined the extension and termination of the early Cretaceous units and the stratigraphy in the Cretaceous/pre-Cretaceous section overlying the Copacabana Group. These discoveries introduced a controversy that we do not intend to solve with the present means allocated to the project. In this report, PARSEP uses Shell (1997) Cretaceous age units with name modifications below the Vivian and its late Permian age units and names overlying the Copacabana Group. The major characteristics of these stratigraphic intervals that are presented in this report for investigators not familiar with the data, are from the knowledge gained after the Camisea discoveries and updated through the additional work done by Shell in the late 90`s. Additionally, the lesser-known deeper Paleozoic stratigraphy is reviewed and condensed, since it also constitutes a potential play type throughout much of the Basin. The following section discusses the Ucayali Basin mega-sequences Paleozoic, Late Permian to Jurassic (Rift/Sag Phase), Cretaceous and Tertiary beginning first with a brief section on Basement.

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4.3.2.1 Basement Few descriptions on Basement rocks have been presented in the greater Ucayali Basin area. One reference, however describes the Basement east of the Contaya Arch across the border in Brazil (Ingemmet 1997, Bull 101,) at Xingu Complex which is composed of granitic and dioritic gneisses and metamorphics with a K/Ar age of 911 13 and 877 42 my. Several wells in the Basin penetrated Basement such as in the Agua Caliente 1X well north of the Shira Mountains and the Platanal 1X, La Colpa 1X, Shahuinto 1X, Runuya 1X, Sepa 1X and Mashansha 1X wells east of the Shira Mountains in the south Ucayali (stratigraphic cross-sections 2, 4, 7, 8 and 10). In the Ene Basin area, Basement has been described from outcrops to its west as being Precambrian crystalline and possible sedimentary to metasedimentary rocks. 4.3.2.2 Ordovician The pre-Andean System begins with the Ordovician cycle and is represented by the Contaya Formation, a unit of gray and black laminated hard slates, which overlies Basement. A maximum thickness of 4500m has been reported for the cycle in the Eastern Range of southern Peru. The Contaya Formation outcrops in the Contaya Arch (150m thick) and 35km south of the Oxapampa wells in the northern and southern Ucayali Basin, respectively. It has been drilled in the Agua Caliente 1X well and possibly in the Cashiboya South well (stratigraphic cross-sections 2, 3, and 4) and its presence is interpreted by seismic across the northern Ucayali Basin. Other than the occurrence south of the Oxapampa wells referred to above, no Contaya aged rocks have been recognized in the Ene Basin area. 4.3.2.3 Silurian Next in the succession is the Silurian cycle which is represented by argillites, flysch and tillites, and can reach thicknesses up to 1000m in southern Peru (Laubacher, 1978). A portion of the monotonous clastic sequences drilled by Panguana 1X and Sepa 1X wells in the southern Ucayali may represent this cycle (stratigraphic cross-sections 2 and 4) although the actual date of these sediments is unknown. The Silurian depositional cycle ends with an erosional episode that is the result of tectonic movement during the Caledonian/Taconian Orogeny in the Peruvian Oriente. The Silurian cycle merges with that of the Devonian Cabanillas Group that has been deposited in the Madre de Dios, Ucayali and Maraon Basins. 4.3.2.4 Devonian - Cabanillas Group Sediments of Devonian age have a widespread distribution reaching a thickness of up to 2000m in the south of Peru, while in northern Peru the maximum thickness seen is 1000m. Rocks of the Cabanillas Group of Devonian age constitute a well defined unit in the study area, and are found in outcrops in the Mainique Gorge and in the Sepa 1X and Panguana 1X wells in the south, and the Rashaya Sur 1X and Cashiboya 1A wells in the north (stratigraphic cross-sections 2, 4, 9 and 10). The presence of this unit is interpreted by seismic throughout much of the subsurface in both the southern and

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northern Ucayali Basin. The presence of Cabanillas aged rocks in the Ene Basin area is likely although this has never been conclusively confirmed (Elf, 1996). The Cabanillas Group is comprised of dark gray mudstones, shales, siltstones and sandstones. The mudstones are dark gray, micaceous, and iron-rich, weathering to red with a sulfurous stain. Generally, the unit is considered to have been deposited in moderately deep water as turbidite and hemi-pelagic deposits, which change upwards into sediments representative of shallow water deposition. In outcrops to the west of the Camisea fields, the upper section is represented by coarsening upward sequences recording episodes of progradation from shelf to deltaic sedimentation and eventually into sediments representative of a shallow basin environment. Each period of progradation ends in a flooding event that deposits a potentially organic-rich source rock facies that characterizes the Cabanillas sediments. The Cabanillas is absent in the northern Shira Mountains-Agua Caliente and to the east of this area in the Platanal-Shahuinto-Mashansha area (stratigraphic cross-sections 7, 8 and 10). 4.3.2.5 Early Carboniferous - Ambo Group Figure 9: Isochron map of the Ambo Group in the southern Ucayali Basin

Possible Ambo Basin Hingeline

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In the Peruvian basins, the earliest Carboniferous sedimentation began with the Ambo Group. The Ambo Group is well known in the southern portion of the Basin where it is generally found overlying the Devonian Cabanillas Group and/or Basement. A gross thickness of 813m in the south diminishes to less than 300m in the La Colpa well area (stratigraphic cross-sections 7, 9 and 10). Its distribution in the northern portion of the Basin is not well known. From the seismic mapping completed by PARSEP, the Ambo Group is seen to thicken dramatically from north to south in the southern Ucayali Basin (Figure 9) with the Ambo sediments onlapping the underlying unconformity surface on Devonian and/or older horizons. In the area of the Mashansha well and to its north, the Ambo is very thin and in some areas, completely absent where basement paleo-highs exist. Moving from this area to south in the Camisea area, the Ambo section thickens dramatically to where over 600msec of Ambo section can be mapped overlying the Devonian. It is currently interpreted that the Camisea fold and thrust belt may be controlled by a major hingeline that was active during Ambo deposition as the Ambo section is seen to increase dramatically in thickness in close proximity to the termination of the Camisea fold and thrust belt. Additionally, it is believed that in the area of thick Ambo deposition, the Ambo was also one of the principal detachment surfaces for the decollement structures in the Camisea area. The Ambo consists predominantly of coarse and fine-grained terrigeneous sandstones with interbedded siltstones, gray shales, and with coal or organic rich interbeds deposited as continental to shallow marine and fluvial deposits. The coal and organic rich beds represent the initial transgression of the early Carboniferous Ambo Group. The unit includes a tidal/estuarine inter-deltaic lower section, a deltaic middle section and an inter-deltaic upper section. The middle deltaic portion has commonly TOCs of 1.0 and locally over 8.0, and 18.0 wt% mainly humid organic matter with potential gas and oil generation capabilities. The Ambo Group is identified as the main source rock of the Camisea gas/condensate fields. These sediments are overlain by the thin transgressive, clastic-rich Tarma Formation (with its widely distributed basal Green Sandstone unit). The Ambo identified in the Ene Basin corresponds to a shallow siliciclastic platform from upper offshore facies to dominant delta front deposits (Elf, 1996). In its more distal facies, the Ambo consists of amalgamated storm beds that contain greenish sands containing coaly debris. 4.3.2.6 Late Carboniferous to Early Permian - Tarma/Copacabana Group The Tarma/Copacabana Group is by far the most widely distributed pre-Cretaceous unit in the sub-Andean basins, including the Ucayali and Ene Basins. Generally it is difficult to place an exact upper contact for the Tarma Group and the two units together are consequently often referred to together, as the Tarma/Copacabana Group. A separation of the Tarma and Copacabana groups can be established locally where the Tarma Group includes more clastic interbeds as in the Mainique Gorge area of the southern Ucayali Basin. The lower unit of the Tarma Group is a clastic unit that includes green sandstones, red siltstones, silty mudstones and anhydrite beds reaching 80 m. in thickness. The basal clastic unit of this interval is called the Green Sandstone member, which typically has good porosity and good reservoir potential. It is a green to brown, fine to very coarse cross-bedded, moderately sorted, glauconitic

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Figure 10: An example of a 50 to 60 meter anhydrite unit within the upper Copacabana section that has been repeated by a thrust fault. The log on the right is the hanging wall section and the one on the right, the footwall section. Note: The repeated section has been removed in the Huaya 3X well in the stratigraphic stratigraphic cross-sections 1 and 2.

Figure 11: West to East seismic line through the Panguana well showing a) how the Copacabana has been erosionally reduced beneath the Base Cretaceous unconformity and b) The anomalously thick section of pre-Ambo sediments intersected in the Panguana well. The Basement pick is very interpretive and base largely on the results of the Panguana 1X well.

HUAYA 3X

2100

2200

2300

2400

2500

2600

2700

HUAYA 3X

1600

1700

1800

1900

2000

2100

2200

THRUST FAULT I

THRUST FAULT I

ENE

COPACABANA

MITU?

ANH

Chonta

TarmaAmbo

Devonian

Basement

Base Cretaceous/CopacabanaChonta

TarmaAmbo

Devonian

Basement

Base Cretaceous/Copacabana

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and chloritic sandstone. There is a sharp contact between the Green Sandstone and the underlying Ambo Group. The green colored clastics diminish upwards and the upper part of the Tarma Group comprises micritic wackestones and dark gray mudstones establishing a gradational contact with the overlying carbonates of the Copacabana Group. The carbonates become a sequence of thick units of dark gray micritic and sparite carbonates, white to light brown crystalline dolomites, cross-bedded oolites, wackestones and cherts with distinctive fusulinid rich horizons in the upper part (Mainique Gorge, Agua Caliente and San Alejandro 1X wells). The group also include some clean 1 to 3 meter-thick anhydrite beds, occasionally 5 m thick, as in the upper Tarma Group in La Colpa 1X well and in the bottom 2/3 in the San Martin 1X well. In the 1950-2050m interval of the Huaya 3X well a 50-60m thick anhydrite unit was intersected within the Copacabana section and is repeated between 2430-2500m by a thrust fault at 2200m (Figure 10). Thickness varies from 640 - 960m in the northern portion of the Ucayali Basin (see wells Huaya 3X, La Colpa 1X, Runuya 1X and Agua Caliente 1X in stratigraphic cross-sections 2 and 4) to 860 - 940m in outcrop in the Mainique Gorge and Atalaya areas (stratigraphic cross-section 9) and 990m in the Camisea San Martin 1X well (stratigraphic cross-sections 4 and 9), in the southern Ucayali Basin. Locally, the unit is partially reduced by erosion along the crests of Paleozoic aged structures such as in the Coninca 2X well were the Tarma/Copacabana has a thickness of 333m (stratigraphic cross-section 3) and in the Panguana 1X well where it has been reduced to 166m as demonstrated in stratigraphic cross-section 9 and seismically in Figure 10, or it has been completely stripped by erosion as in the Cashiboya area, (stratigraphic cross-section 1). In the area over the Contaya arch where there is no Copacabana, it is presently unknown whether the Contaya Arch was a positive feature during Copacabana deposition, (the result of an earlier tectonic uplift and the unit was not deposited as suggested by Mathalone (1994)) or whether it is simple a result of uplift and complete erosion as referred to in the examples above. If the latter is true, the Contaya Arch became a positive feature in Late Permian time. The Copacabana contains organic-rich dark gray to black mudstones deposited under flooding or anoxic conditions with source rock characteristics. Dolomitic wackestones interbedded with brown sandstones at various levels in the whole unit produce strong to faint oil smell in fresh broken surfaces. These intervals have TOC of 2.0 wt% and are mature for oil and gas generation in the Mainique Gorge, Shell (1997). Near the top, the carbonates are bioturbated and burrowed and are found underlying the basal Ene Formation mudstone, with no evidence of karsts or breccias. In the Huaya 3X well there is a common presence of dolomites observed near the anhydrite beds. These dolomites are brown gray and dark gray, locally vugular, micritic, oolitic and pelletoidal, which are remnants