Discoveries. 4.1 Aggregate Results

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1 Discoveries 4 The results in 2005 are encouraging and show that the incorporation of hydrocarbon volumes and reserves in Mexico s geological basins due to exploration activity has been better than in recent years. As in previous editions, this chapter reports the statistics of new discoveries arising from exploratory activity, with a list of the most important discoveries made in 2005 and it furnishes the geological, geophysical, petrophysical and engineering data that support them. The incorporations in 2005 amount to million barrels of oil equivalent in 3P reserves. In 2005, 1,640.2 million barrels of oil equivalent were produced, which means the replacement rate was 59.2 percent, the highest in recent years. The rate of replacing reserves with new discoveries has gradually increased from 14.4 percent in 2001 to 59.2 percent in These results show that the sustained investment in exploration in recent years is adding value through a gradual improvement in the reserves replacement rate, a strategy that should be continued, considering that the maturity period of exploratory projects implies several years. Exploration activity in 2005 accounted for approximately 12 percent of the investment budget, in which the drilling of exploratory wells, the acquisition of seismic information and carrying out geological studies were favored. This has made it possible, on one hand, to identify new areas of opportunity that have been incorporated into the portfolio of exploratory opportunities, and on the other, to reduce the degree of uncertainty of various project in such a way that investments could be focused on those with a better balance in terms of economic value and risk. The new discoveries include important findings of oil reservoirs in the offshore regions that will make it possible to restore the country s hydrocarbon production in the medium and long term. On the other hand, significant discoveries of non-associated gas reservoirs have been made in areas like Veracruz and Burgos, which will make it possible to continue increasing gas production in Mexico in the coming years. In the Veracruz and Burgos basins, maximum daily productions of 1,292.8 and million cubic feet of natural gas were attained in December 2005, and with the reserves discovered, it is clear that production will continue to rise. The case of the Veracruz Basin is exceptional, because production increased threefold from 2002 to The information presented explains the volume of reserves contributed by the discoveries and their composition in the different categories. Furthermore, there is a basin-level association for each one of the discoveries, which helps the reader follow the exploratory strategy over the year. More detailed statistical information about these elements is given at the end of the chapter. 4.1 Aggregate Results The incorporations of hydrocarbon reserves were higher than in 2004 because the exploratory activity discovered million barrels of oil equivalent in 3P reserves in the national territory. To this end, the exploratory campaign included land and offshore areas, with the drilling of exploratory opportunities in Mesozoic, Tertiary and Recent rock. Table 4.1 summarizes, at an exploratory well level, the reserves incorporated 29

2 Discoveries Table 4.1 Composition of the hydrocarbon reserves of reservoirs discovered in P 2P 3P Basin Well Crude Oil Natural Gas Crude Oil Natural Gas Crude Oil Natural Gas Oil Equivalent Field MMbbl Bcf MMbbl Bcf MMbbl Bcf MMbbl Total , Burgos Antiguo Antiguo Antiguo Antiguo Caravana Caravana Caronte Caronte Fitón Fitón Fósil Fósil Guillermo Prieto and Villa Cárdenas Cobres Kodiak Kodiak Níquel Níquel Paleoarcos Paleoarcos Patlache Patlache Patriota Yunque Platinado Platinado Rosal Rosal Simbad Simbad Tecoco Tecoco Yac Yac Southeastern Agave Agave Baksha Pit Chuc Kux Ichalkil Ichalkil Kach Kach Kastelán Kastelán Kayab Kayab Sinán Behelae Sinán Sikil Tiumut Tiumut Tson Tson Xanab Xanab Tampico ampico-misantla Arenque Merluza Mejillón Mejillón Veracruz Arquimia Arquimia Espejo Espejo Lizamba Soterillo Papán Huace Papán Papán

3 in the proved reserve (1P), proved plus probable reserve (2P) and the proved plus probable plus possible (3P) categories, while indicating the type of hydrocarbon associated with each discovery. In 2005, significant efforts were made in the exploration and incorporation of oil reservoirs, notably the work done in the Northeastern Offshore Region that permitted the incorporation of million barrels of oil equivalent in the 3P category with the discoveries in the Kayab and Tson fields and the drilling of the Pit block in the Baksha field. In the Southwestern Offshore Region, light and heavy oil reservoirs were discovered with the drilling of the Ichalkil-1, Xanab-1, Behelae-1 and Kux-1 wells, the latter two in the Sinán and Chuc fields, which made it possible to incorporate million barrels of oil equivalent in light oil reserves. The Kach and Sikil reservoirs, which mainly produce heavy oil, contribute million barrels of oil equivalent. Furthermore, a heavy oil reservoir was discovered in this region in Kastelán with 42.6 million barrels of oil equivalent. Jointly, the discoveries in 2005 have a 3P reserve of million barrels of oil equivalent. In the Northern Region, the most important incorporations are non-associated gas; during the period, a volume of billion cubic feet in 3P reserves was discovered. The Burgos Basin contributed with non-associated gas reserves in the Caronte-1, Fitón-1, Yac-1, Rosal- 1, Fósil-1, Antiguo-1, Paleoarcos-1, Kodiak-1, Níquel-1, Tecoco-1, Antiguo-8, Platinado-1 Simbad-1, Patlache- 101, Caravana-1, Cobres-1 and Yunque-1 wells, which contributed an aggregate volume of billion cubic feet of natural gas in 3P reserves, which corresponds to 76.3 million barrels of oil equivalent. The offshore portion of the Tampico-Misantla Basin managed to incorporate 3P reserves of billion cubic feet with the Mejillón-1 and Merluza-1 wells. In the Veracruz Basin, non-associated gas reserves were incorporated by the Soterillo-1, Espejo-1, Papán- 1, Huace-1 and Arquimia-101 wells, which jointly contributed a total of billion cubic feet in 3P reserves, or 66.3 million barrels of oil equivalent. The most important discovery was the Papán field with billion cubic feet of gas in 3P reserves, of which billion cubic feet of gas correspond to proved reserves. Table 4.2 Composition of the hydrocarbon reserves of reservoirs discovered in 2005 by basin and by region. 1P 2P 3P Basin Crude Oil Natural Gas Crude Oil Natural Gas Crude Oil Natural Gas Oil Equivalent Region MMbbl Bcf MMbbl Bcf MMbbl Bcf MMbbl Total , Burgos Northern Sureste Northeastern Offshore Southwestern Offshore Southern Tampico ampico-misantla Northern Veracruz Northern

4 Discoveries In the Southern Region, the incorporation of reserves during the period was modest and it incorporated 9.5 million barrels of oil equivalent of light oil in the Tiumut- 1 and Agave-1001 wells. Nevertheless, significant results are expected for this region in Table 4.2 lists the 1P, 2P and 3P reserves at a basin level and their breakdown by region, while Table 4.3 summarizes, at a regional level, the reserves incorporated in the proved reserve (1P), proved plus probable reserve (2P) and the proved plus probable plus possible reserve (3P) categories, while indicating the type of hydrocarbon associated with each discovery. This section includes a statistical summary of the discoveries and a technical explanation of the most important fields discovered because of the reserves incorporated or their strategic qualities. There is a brief discussion of their principal geological, geophysical and petrophysical characteristics and their reservoirs, as well as the dominant fluid and their reserves. 4.2 Offshore Discoveries Offshore exploration has been centered on the Southeastern and Tampico-Misantla basins, especially in the Sonda de Campeche, Salina del Istmo and Litoral de Tabasco in the former and the Tampico offshore area in the latter. The exploration of the Northern part of the Sonda de Campeche corroborated the existence of additional volumes of heavy oil with wells like Tson-1, Kayab-1 and Pit-1, the latter in the Baksha field. Jointly, they incorporated 3P reserves of million barrels of oil equivalent. In the Center and South of the Sonda de Campeche light oil reserves were incorporated with the discoveries of the Ichalkil-1 and Kux-1 wells, which jointly added more than million barrels of oil equivalent. Additionally, heavy oil reserves were discovered by the Kach-1 and Kastelán-1 wells, respectively. In Table 4.3 Composition of the hydrocarbon reserves of reservoirs discovered in 2005 by hydrocarbon type. Crude Oil Natural Gas Heavy Light Superlight Associated Non-associated G-C* Wet Gas Dry Gas Total Category Region MMbbl MMbbl MMbbl Bcf Bcf Bcf Bcf Bcf 1P Total Northeastern Offshore Southwestern Offshore Northern Southern P Total Northeastern Offshore Southwestern Offshore Northern Southern P Total Northeastern Offshore Southwestern Offshore Northern Southern * G-C: Gas-Condensate Reservoirs 32

5 total, in the Sonda de Campeche, more than million barrels of oil equivalent in 3P reserves were discovered. Light oil reservoirs of the Upper and Middle Cretaceous were discovered in the Litoral de Tabasco, with the Xanab-1 and Behelae-1 wells, and jointly they total million barrels of oil equivalent. Additionally, the Sikil well incorporated heavy oil reserves. The total figure is 3P reserves of million barrels of oil equivalent. The most important discoveries made in 2005 are given below with the geological, geophysical, petrophysical, and engineering information of the wells drilled. Southeastern Basins Kayab-1 The well was drilled in territorial waters of the Gulf of Mexico, at approximately 135 kilometers Northwest of Ciudad del Carmen, Campeche. The purpose was to evaluate the Upper Jurassic Kimmeridgian, Lower and Middle Cretaceous and the carbonate Breccia of the Upper Cretaceous. The well reached a depth of 3,820 meters in a water depth of 154 meters. The result was the discovery of heavy oil in carbonated rocks of the Cretaceous. Figure 4.1 shows the location of this well within the Sonda de Campeche. Structural Geology The structure of this field is a narrow and elongated anticline, divided into three blocks. The seismic and geological interpretations indicated that the structure has been folded because of tectonic compression in a Northeast to Southwest direction and it is bounded on both sides by reverse faults, Figure 4.2. Stratigraphy The stratigraphic column drilled consists of sediments from the Upper Jurassic Kimmeridgian to the Recent. The Upper Jurassic Kimmeridgian consists of slightly shally microcrystalline to mesocrystalline dolomite with W N S E TUNICH BAKSHA 92 00' UBICACIÓN DEL BAKSHA AREA KAYAB -1 ZAZIL -HA NUMAN POHP POHP REG N LUM LUM ZAZIL-HA MALOOB ZAAP BACAB Northeastern Offshore Region NA KU KUTZ CANTARELL CANTARELL IXTOC IXTOC EK BALAM CHAC TAKIN m REGIÓN MARINA SUROESTE 145 KM 135 Km CD. DEL CARMEN DOS BOCAS FRONTERA Frontera Cd. del Carmen Gulf of Mexico km Figure 4.1 Location of the Kayab-1 well in territorial waters of the Gulf of Mexico. 33

6 Discoveries Tlak Block Lem Block -3,040 Kayab Block Figure 4.2 Structural configuration of the Upper Cretaceous Breccia top. The structure was formed by compressional tectonic activity. microfractures, compact shally wackestone with scarce fracturing deposited in a shallow marine environment. The Upper Jurassic Tithonian consists of partly sandy, shally and bituminous mudstone, showing a deep environment with restricted circulation. The Lower Cretaceous is represented by wackestone, with interspersed microcrystalline dolomite, intercrystalline porosity and fractures with regular oil saturation in fractures and dissolution cavities. The Middle Cretaceous is characterized by mudstone to wackestone with fracturing; oil saturation is evident in the open fractures. The Upper Cretaceous consists of partially dolomitized breccia. Fractures and dissolution cavities with heavy oil can be seen in this sequence. The Tertiary consists of interspersed shale with alternating thin layers of fine to medium grain sands, while the Recent consists of poorly consolidated clays and interspersed sands. Trap At the Cretaceous and Upper Jurassic level, the trap is a structural type with a noticeable Northeast-Southwest orientation and affected by reverse faulting to the North and South of the structure, Figure 4.3. Source Rock The geochemical studies carried out in the area determined that the hydrocarbon source rock is of the Upper Jurassic Tithonian age and is made up of black bituminous shale and dark gray shally limestone with a high concentration of organic matter and broad regional distribution. Seal At a regional level, the seal is made up of bentonitic, plastic and partially limestone shale of the Paleocene. Reservoir Various production tests were run that showed the presence of liquid hydrocarbons. The test run in the Lower and Middle Cretaceous produced heavy oil with 9 API degrees, while the test run in the Middle Cretaceous and in the Upper Cretaceous Breccia with the use of electrocentrifugal pumping produced heavy oil with 8 API degrees at a flow rate of 2,249 barrels per day. Figure 4.4 shows the computed well logs, indi- 34

7 Tlak -1 Lem-1 Kayab-1 Figure 4.3 Seismic cross section showing the compressional structural style at the Mesozoic level. Core-1 BRKS ,500 Core-2 PP - IV ( m) m) Qo Qo : 2249 : 2249 BPD, BPD, Qg : Qg : CFD, OIL PC/D, ACEITE 9 º API, Ptp = 341 PSI, Est Est = = ¾ ¾, EPS, SISTEMA SYSTEM BEC,, FREQ. FREC Hz. Hz. K.M , ,700 Figure 4.4 Petrophysical evaluation showing the interval tested and cores evaluated. 35

8 Discoveries cating the oil and gas producer interval where the production test was run with an oil production rate of 2,249 barrels per day, for an average porosity and water saturation of 5 and 25 percent, respectively. Reserves The 3P original volume of oil is 1,900.1 million barrels, while the 3P reserves total million barrels of oil equivalent. Tson-1 The well was drilled in territorial waters of the Gulf of Mexico, at approximately 121 kilometers Northwest of Ciudad del Carmen, Campeche, with a total vertical depth of 4,230 meters and it produced heavy oil. The purpose was to evaluate the potential of the Upper Jurassic Kimmeridgian, Lower and Middle Cretaceous and Breccia of the Upper Cretaceous that had been drilled by Ceeh-1 well in an adjacent block. Figure 4.5 shows the location of the field within the Sonda de Campeche. Structural Geology This block is part of the anticline structural complex trend, bounded on the West and North by reverse faults. The block has been expelled because of compressive tectonics and the seismic interpretation reveals that it is affected by the same thrust fault as the adjacent block drilled by Pohp-1 well, Figure 4.6. Locally, the structure is semicircular with normal and internal faults that divide the structure into smaller blocks. Stratigraphy The geological column consists of sediments that go from the Upper Jurassic Oxfordian to the Recent. The Upper Jurassic Oxfordian consists of sandy limolite, quartz sandstone shale and shally mudstone, w N S E TUNICH BAKSHA 92 00' UBICACIÓN DEL BAKSHA AREA ZAZIL -HA NUMAN POHP POHP ZAZIL-HA MALOOB ZAAP TSON-1 REGIÓ LUM LUM NO BACAB NA Northeastern Offshore Region KU KUTZ CANTARELL CANTARELL IXTOC IXTOC EK BALAM CHAC TAKIN m 145 KM 117 Km CD. DEL CARMEN DOS BOCAS FRONTERA Frontera Cd. del Carmen Gulf of Mexico km Figure 4.5 Location of the Tson-1 well in territorial waters of the Gulf of Mexico. 36

9 Figure 4.6 Structural configuration of the Upper Cretaceous Breccia top. The structural complexity has given rise to compartmentalization of the structure. partly bituminous with traces of oil, and slightly dolomitized wackestone. The Upper Jurassic Kimmeridgian consists of compact shally wackestone, with scarce fracturing, that was deposited in a shallow marine environment. The Upper Jurassic Tithonian is composed of micro- to mesocrystalline dolomite with secondary porosity in fractures and dissolution cavities saturated with heavy hydrocarbons. There are mesocrystalline dolomite oolitic intervals with good primary and secondary porosity, intergranular and fracture porosity and high heavy hydrocarbons impregnation. The Lower Cretaceous consists of micro- to meso-dolomite with intercrystalline porosity, with traces of hydrocarbons, impregnated fractures and others cemented by calcite, with interspersing of bioclast shally mudstone. The Middle Cretaceous is characterized by mudstone to wackestone with open fracturing in two directions and oil saturation. The Upper Cretaceous is composed of microdolomite and partially dolomitized clast Breccia, with heavy oil in fractures and dissolution cavities. The Tertiary is represented by shale interspersed with fine to medium grain sandstone and the Recent is made up of poorly consolidated clays and sands. Trap At the Upper Cretaceous level, the trap is a structural type produced by Lower Miocene age compressional forces, with a Northeast lie and affected by reverse faulting caused by compressive tectonics, Figure 4.7. Source Rock The most important hydrocarbon source rock is of the Upper Jurassic Tithonian age and is made up of organic material in the black bituminous shale and dark gray shally limestone with abundant organic matter and broad regional distribution. Seal At a regional level, the seal is made up of bentonitic, plastic and partially limestone shale of the Paleocene. 37

10 Discoveries Figure 4.7 Seismic cross section showing the compressional structural style and compartmentalization of the structure. Figure 4.8 Computed well logs indicating the oil and gas producing intervals. 38

11 Reservoir The Upper Cretaceous reservoir is composed of a Breccia with microcrystalline dolomite fragments and intraclast mudstone-wackestone and partially dolomitized bioclasts. The porosity is secondary and intercrystalline in fractures and dissolution cavities. The average porosity is 8 to 9 percent and the average water saturation is 35 percent. The Upper Jurassic Kimmeridgian reservoir is made up of carbonated, dolomitized oolitic carbonates, with an average porosity and water saturation of 5 and 50 percent, respectively. The production test run in the Upper Jurassic Kimmeridgian resulted in a production rate of 2,764 barrels per day of 9 API degrees oil, using the ESP system. On the other hand, oil production of 3,002 barrels per day of 8 API degrees was obtained in the Upper Cretaceous Breccia, also using the ESP system. Figure 4.8 shows the computed well logs indicating the producing intervals of oil and gas. Reserves The 3P original volume of oil in the Cretaceous reservoir is 1,813.3 million barrels and million barrels in the Jurassic reservoir. The 3P reserves estimated for the Cretaceous reservoir amount to million barrels and 21.1 million barrels of oil equivalent for the Jurassic. Nab Maloob Kaxan m Kach-1 Alak -1 Abkatún Ku Cantarell 200 m 100 m Ayín Ichalkil-1 Sinán Uech Nak-1 Misón -101 Chuc Tumut -1 Wayil-1 Zinic -1 May Frontera Cd. del Carmen Figure 4.9 Location of the Ichalkil-1 well in territorial waters of the Gulf of Mexico. 39

12 Discoveries Physical limit at 4,970 vmbr Ichalkil-1 Figure 4.10 Structural configuration of the Upper Cretaceous Breccia top. The structure was formed by compressional tectonic activity. Ichalkil-1 Structural Geology This well is located in territorial waters of the Gulf of Mexico, at approximately 76 kilometers Northwest of Ciudad del Carmen, as can be seen in Figure 4.9. It forms part of the new exploratory discoveries of light oil in naturally fractured carbonated rocks of the Cretaceous. The sedimentary environment corresponds to carbonated, open sea facies. It was drilled to a vertical depth of 5,010 meters in Upper Jurassic Tithonian rock. The water depth is 32.5 meters and it produced light oil at 33 API degrees in the Lower and Middle Cretaceous. The Ichalkil structure is a smooth anticline cut by two reverse faults that give rise to three blocks with little difference in height between them. To the West, there is structural nose that rises to a reverse fault that limits the field, Figure Stratigraphy The well penetrated through rocks from the Upper Jurassic Tithonian to the Recent. The rocks deposited during the Mesozoic are mostly carbonated related to UC MC F.L. 4,940 LC UJT Figure 4.11 Structural cross section of the Ichalkil field showing the anticline structure and the lower physical limit of the reserves. 40

13 a transgressive regional framework. In the Upper Jurassic Kimmeridgian, the sedimentary environment has shallow characteristics and becomes deeper in the Upper Jurassic Tithonian and open sea carbonated in the Cretaceous. The Tertiary largely consists of a thick column of marine siliclastic sediments and is represented by interspersed shales and alternating thin layers of sandstone with different grain sizes. Trap The reservoir trap of the Lower and Middle Cretaceous is structural and is represented by an asymmetric East- West anticline with a normal closure fault to the Western end and as the main closure of the entire structure; the conventional limit is the top of 4,940 meters below sea level, Figure porosity of 5 percent, water saturation is 26 percent and it contains light oil of 33 API degrees. Figure 4.12 shows the computed geophysical logs indicating the intervals evaluated. Reserves The 3P original volume of oil is million barrels. The 2P and 3P crude oil reserves are estimated at 25.5 and million barrels, respectively. The natural gas reserves are 15.9 and 62.9 billion cubic feet. In terms 0. GR (GAPI) GRKT (GAPI) m 4700 UC AHT90 (OHMM) N m Source Rock 4750 m MC The most important hydrocarbon source rock is of the Upper Jurassic Tithonian age and is made up of organic material in the black to dark gray bituminous shale and dark gray shally limestone with abundant organic matter and broad regional distribution m 4800 LC N N-2C Seal At a regional level, the seal is made up of Paleocene bentonitic, plastic and partly calcareous shale with a thickness that ranges from 180 to 200 meters, with extensive lateral distribution Reservoir The reservoir is located in the Middle and Lower Cretaceous and is composed of mudstonewackestone and packstone bioclasts, with sandy quartz flows and feldspars from mud to very fine sand in size. Figure 4.12 shows the petrophysical evaluation of the intervals drilled. According to the geophysical logs, cores and drilling cut samples, the reservoir has a gross thickness of 252 meters, 4971 m UJT 5000 N Figure 4.12 Well logs showing the proved intervals in the Middle Cretaceous and the base of the Lower Cretaceous. 41

14 Discoveries Le Ixtal Taratunich Ixtoc Batab Abkatún Och Toloc Pol Caan Ayín Alux Uech Behelae-1 Kax Chuc Kay Gulf of Mexico Sikil-1 Citam Bolontikú Sinán Kab Hayabil Misón Kix May Yum Teekit Xanab Frontera Yaxché Dos Bocas 0 20 km Figure 4.13 Location of the Xanab-1 well in territorial waters of the Gulf of Mexico at 23 kilometers Northwest of the Terminal Marítima Dos Bocas, Tabasco. of oil equivalent, the 2P and 3P reserves total 28.8 and million barrels. Xanab-1 It is located in territorial waters of the Gulf of Mexico; it is off the coast of Tabasco and approximately 23 kilometers Northwest of the Terminal Marítima Dos Bocas, Figure The water depth is 24 meters and the total well depth was 6,476 meters. The Xanab field is located within the Coatzacoalcos Geological Province, and structurally it is over the southern portion of the Pilar de Akal. The purpose was to corroborate the existence of hydrocarbon reserves in the Lower, Middle and Upper Cretaceous rocks, and it turned out to a producer of 33 API degrees of light oil. Structural Geology The structure is the continuation of a structural trend with a mostly Northeast to Southwest lie, where the Kuche-1 and Baats-1 wells are located. The structure is an elongated anticline in a Northwest to Southeast direction; it is bounded by two normal faults and is affected by saline intrusion, Figure Stratigraphy The well cut a stratigraphic column of rocks from the Upper Jurassic Tithonian to the Recent. The Upper Cretaceous is composed of mudstone-wackestone with primary intercrystalline porosity and secondary in fractures with oil saturation, with planktonic foraminifers of the external shelf. The Middle Cretaceous is made up of mudstone-wackestone with primary intercrystalline porosity and secondary in fractures with oil saturation, and the Lower Cretaceous consists of mudstone-wackestone with primary intercrystalline porosity and secondary in fractures with oil impregnation. Trap The trap is structural with normal closure on the Eastern and Western flanks and against two normal faults 42

15 km Figure 4.14 Structural configuration of the Upper Cretaceous Breccia top. The structure was developed by compressional tectonic activity. Figure 4.15 Structural cross section showing the anticline structure that was derived by the compressional forces. 43

16 Discoveries in the Northwestern and Southeastern portions. The Northeastern block has a fault closure to the south, while the rest of the structure has a normal closure. The Southeastern block has a 400 meter closure and the Northwestern block has a fault closure of 700 meters, Figure XANAB-1 Seal The rock seal is made up of a sequence of partly bentonitic shale with a thickness ranging of about 200 meters and extensive lateral distribution of argillaceous sandstone of the Paleocene. Source Rock The source rock is of the Upper Jurassic Kimmeridgian age and is composed by dark gray to black bituminous shale, which is laminar and calcareous, with a broad regional distribution. Reservoir The Upper, Middle and Lower Cretaceous reservoir is largely composed of mudstonewackestone in argillaceous parts of light gray Figure 4.16 Petrophysical evaluation showing the interval tested in Cretaceous carbonates and the cores evaluated. foraminifers, with oil saturation in interangular porosity. The net thickness is 34 meters, with average porosity and water saturation of 5 and 25 Mejillón-1 percent, respectively. The initial oil rate estimate is 4,310 barrels per day of light oil of 33 API degrees. The Mejillón-1 well is geographically located in the territorial waters of the Gulf of Mexico, on the Continental The computed well log is shown in Figure 4.16, indicating the oil and gas producing interval and the cores Shelf, at 15 kilometers from the coast, to the East of evaluated. Barra de Tuxpan, Veracruz, Figure Geologically, it is located on the Southeastern portion of the Tuxpan Reserves Shelf, to the South of the Esturión, Marsopa, Atún, Bagre, Morsa and Escualo field trends, which produce The 3P original volume of oil is million barrels. light oil and gas. The well was drilled in a water depth The 1P, 2P and 3P reserves are 6.8, 12.9 and 46.1 million barrels of oil equivalent. ture located 39 kilometers to the South of the Atún of 50 meters and the purpose was to evaluate the struc- field, 44

17 N W E S Arrecife Medio Isla de Lobos Tiburón Tintorera Carpa Esturión Marsopa Gulf of Mexico Tuxpan Bagre Atún Morsa Escualo POZA RICA Poza Rica Tecolutla Cangrejo Mejillón Km. Figure 4.17 Location of the Mejillón-1 well in territorial waters of the Gulf of Mexico, within the Tampico-Misantla Basin. and identified by 3D seismic studies. The total depth was 3,450 developed meters, and it is a producer of gas and condensate at 57 API degrees. Structural Geology The 3D seismic interpretation of the Lankahuasa Norte cube made it possible to visualize an elongated structure 12 kilometers long formed by a remnant paleotopographic of the Middle Cretaceous in a Northwest-Southeast direction, which forms part of the structure that permitted the trapping of hydrocarbons, Figure Stratigraphy The sedimentary column drilled by the well goes from the Middle Cretaceous to the Recent. The reservoir rock is the El Abra formation and mostly corresponds to carbonates of packstone and grainstone of bentonitic foraminifers with dissolution porosity and a lower proportion of intra- and interangular porosity, which are occasionally connected by fractures. The samples collected show sub-area exposure surfaces that give rise to dissolution cavities associated with collapsed breccia. The diagenetic processes are important and they control the rock quality. Trap This is an elongated structure formed by paleoreliefs in a Northwest-Southeast direction, with closure in four directions. There is a sharp dip corresponding to the shelf slope towards the Eastern part of the structure, Figure

18 Discoveries Mejillón-1 Cangrejo-1 Mero-1 S Figure 4.18 Visualization of the El Abra formation top in the Middle Cretaceous, which corresponds to a structure formed by a paleorelief. Seal Reservoir The seal of the El Abra reservoir largely consists of argillaceous Tertiary rocks that are regionally extended in the area. The El Abra reservoir is mostly formed by miliolid packstone and grainstone. The reservoir top is located at a depth of 3,151 meters. The gross thickness is 50 SW Mejillón-1 NE Tertiary Tertiary CElAbra Figure 4.19 Seismic line showing Mejillón-1 well and the growth fault that slips over the carbonated platform. 46

19 meters, and the average porosity and water saturation is 13 and 21 percent, respectively. It is a gas-condensate reservoir with 57 API degrees of specific gravity. The production flow rate measured per day through a 5/8 choke was 649 barrels and 21 million cubic feet of gas. Reserves The 3P original volume of oil is 5.1 million barrels. The estimated reserves in the 1P, 2P and 3P categories are 6.4, 12.9 and 18.1 million barrels of oil equivalent, respectively. 4.3 Onshore Discoveries It is geographically located approximately 100 kilometers Northwest of Reynosa, Tamaulipas and geologically it is in the Western portion of the Burgos Basin, Figure 4.20, within the Paleocene belt in the proximity of the Gigante field. The purpose was to evaluate the hydrocarbon potential in the system of channels and barrier bars corresponding to the Eocene Wilcox Play, where Antiguo-1 turned out to be a producer of non-associated natural gas. Structural Geology The well is located in a block that is bounded by two normal faults, one to the East and one to the West. The North and South closures are due to structural characteristics, Figure Stratigraphy The well was drilled to cut a geological column from the Wilcox Paleocene to the Weches Eocene, with a total depth of 2,492 meters. As is typical in the Burgos The most important onshore discover- N ies are located in the Burgos, Sabinas W E and Veracruz basins of the Northern Re- S gion and in the Southeastern Basins of Nuevo Laredo the Southern Region. The total reserves incorporated in the entire land portion amount to million barrels of oil equivalent, while the reserves in the 1P and 2P categories are 74.6 and 96.4 million barrels of oil equivalent, respectively. A detailed explanation of the most important discoveries in 2005 is given Polar Antiguo-1 below. Nuevo Laredo Bonita-1 Levita-1 Burgos Basin Antiguo-1 Presa Falcón Azul-1 Jacal-1 Herreras Reynosa Camargo Reynosa Matamoros Gulf of Mexico Figure 4.20 Map showing the location of the Antiguo-1 well in the Burgos Basin. 47

20 Discoveries Figure 4.21 Amplitude extraction map with superimposing of the structural configuration and the Wilcox Eocene sand limits. W Antiguo-1 E Figure 4.22 Seismic cross section showing the structural situation and reflector of the Antiguo-1 well producing interval. The structural characteristics are an extensive tectonic with growth faulting. 48

21 Basin, the sequence is mostly composed of alternating layers of shale and sandstone. The geological model proposed for the producing sand is interpreted as a channel filled with eroded sands and a complex of barrier islands. Trap The trap is stratigraphically structural in rocks that correspond to multiple sequences of sandstone and shale of the Wilcox Eocene formation, as shown in Figure Source Rock The hydrocarbon source rock is made up of shale corresponding to the Wilcox Paleocene formation. The rock has good source rock characteristics, with a considerable accumulation of type III organic material and ranges of total organic carbon of between 13 and 43 percent and a moderate potential generator index. Seal According to the interpretation of the geophysical well logs, the seal rock corresponds to a column of shale with scarce interspersing of sands in thicknesses of approximately 40 meters. Reservoir The reservoir is located between 2,310 and 2,320 meters and it corresponds to the Wilcox Eocene formation. Commercial production of non-associated natural gas was established in this interval, with an initial production of 5 million cubic feet of natural gas and 46 barrels of condensate per day. This producing reservoir consists of light and dark gray sandstone with fine, rough, regularly sorted quartz grains, consolidated in argillaceous material and calcareous cementing. The average porosity and saturation is 21.3 percent and 25.6 percent, respectively. The interpreted well log is shown in Figure 4.23, indicating the gascondensate producer interval. Figure 4.23 Well logs evaluated, showing the producer interval and the result of the production test carried out. 49

22 Discoveries Reserves The gas and condensate reserves correspond to sandstone in the Wilcox Eocene formation. The 3P original volume of gas is 31.1 billion cubic feet. The estimated 1P, 2P and 3P reserves are 2.3, 10.2 and 22.7 billion cubic feet of natural gas, respectively. Antiguo-8 It is located approximately 100 kilometers Northwest of Reynosa, Tamaulipas, within the area of the Burgos Integral Business Unit, Figure The purpose was to evaluate the hydrocarbon potential associated with the Antiguo-1 well in the system of channels and barrier bar islands corresponding to the Wilcox Eocene Play, where it turned out to be a producer of non-associated natural gas. Geologically it is located in the Paleocene belt in the vicinity of the Gigante field. Structural Geology Structurally, it is in the structural trend of the Jaujal and Explorador fields, which are limited by two large faults in a Northwest-Southeast direction and there is a regional lie to the East, Figure Stratigraphy The well penetrated the geological column from the Wilcox Paleocene formation to the Recklaw Eocene N W E S Nuevo Laredo Polar-1 Antiguo-8 Nuevo Laredo Levita-1 Bonita-1 Azul-1 Jacal -1 Presa Falcón Reynosa Matamoros Herreras Reynosa Camargo Gulf of Mexico Figure 4.24 Map showing the location of the Antiguo-8 well in the Burgos Basin. 50

23 Figure 4.25 Map of RMS amplitude anomalies showing the reserves limits of the sand 1,878. formation, with a total depth of 2,492 meters. The geophysical model in the 1,878-1,896 meter interval corresponds to the Wilcox Eocene formation and is part of the upward fining grain parasequences. It is related to the progradation sea channels through the barrier islands, as is shown in Figure Source Rock ranges of total organic carbon of between 13 and 43 percent and a moderate potential generator index. Seal Rock According to the interpretation of the geophysical well logs, the seal rock corresponds to shale with a thickness of approximately 120 meters. The hydrocarbon source rock in this area corresponds to shale belonging to the Wilcox Eocene formation; it has good source rock characteristics, with a considerable accumulation of type III organic matter and Trap The structure is contained in a combined trap limited by two normal faults with a Northeast-Southwest lie, 51

24 Discoveries Figure 4.26 Map of facies of the producing sand 1,878 corresponding to the Wilcox Eocene formation. N Antiguo-8 S Figure 4.27 Seismic cross section showing the seismic-structural interpretation and including the producing horizon of the 1,878-1,896 meters of the Eocene age in the Wilcox formation. 52

25 GR (GAPI) DENS (gr/cc) PP1 TVD M CALI (IN) GAS (ugas) PP2a PP2b DEPTH M AO90 (OHMM) SW (Dec) PHIE (Dec) NPHIds (V/V) KTT (md) AT30 (OHMM) AT60 (OHMM) AT90 (OHMM) PT 3 ( m) 20/64", P= 2275 psi, Qg= 4.29 MMcfd, Qc= 128 bpd, Qa= 0 PayFlag () RHOBds (G/C3) K_NP (md) PHI_NP(dec) VCL (Dec) PHIE ( Dec) BVW (Dec) m GL= 227 u, DENS. From 1.45 Ato1.42 gr/cc Figure 4.28 Petrophysical evaluation including the producer interval with the results of the production test. while in stratigraphic terms, it is located in the separated portion of the expansion zone, Figure Reservoir Commercial production of non-associated natural gas was established in the 1,878-1,896 meter interval corresponding to the Wilcox Eocene formation, with an initial production of 4 million cubic feet of natural gas and 128 barrels of condensate per day. The producing reservoir consists of light gray sandstone with rough, regularly sorted quartz grains, with an average porosity of 20 percent, permeability of 3 millidarcies and water saturation of 39 percent. The computed well logs are shown in Figure 4.28, indicating the gas and condensate producing interval. Reserves The well is a producer of gas and condensate in sandstone of the Wilcox Eocene formation. The 3P original volume of gas is 30.4 billion cubic feet. The estimated 1P, 2P and 3P natural gas reserves are 8.6, 14.0 and 24.3 billion cubic feet, respectively. Platinado-1 It is located approximately 63 kilometers Northwest of Reynosa, Tamaulipas; Figure The purpose of the well was to incorporate wet gas reserves in sandstones of the Queen City Eocene play. The interpretation of the structure was done by using 2D seismic information and 3D seismic information was used only the Southern flank. Structural Geology Structurally, the well is located in the structural trend of the Fogonero-1 and Nauyaca-1 wells and to the South, it correlates with the Eastern producing block of the Santa Anita field. The structure is cut to the West by a growth fault in a Northwest-Southeast direction. In general, there is good structural relief and there is a fault that limits the structural trend to the South. Stratigraphy The well penetrated the geological column made up of sediments from the Lower Eocene Wilcox forma- 53

26 Discoveries N W E S Nuevo Laredo Polar-1 Nuevo Laredo Levita-1 Bonita-1 Jacal-1 Azul-1 Platinado-1 Presa Falcón Reynosa Matamoros Herreras Reynosa Camargo Gulf of Mexico Figure 4.29 Map showing the location of the Platinado-1 well at 63 kilometers Northwest of Reynosa, Tamaulipas. tion to the Upper Eocene Jackson formation, with a total depth of 4,250 meters. The facies recognized at the reservoir level are depositary systems of progradation beach and barrier islands. the presence of growth faults due to compressive tectonics. Reservoir Seal According to the interpretation of the geophysical well logs, the seal rock corresponds to shale with a thickness of more than 100 meters. Trap It is a combined trap with fault closure to the West and a dip in the other directions. As can be seen in Figures 4.30 and 4.31, the structure shows Commercial production of natural gas was established in the 3,235-3,255 meter interval corresponding to the Queen City Eocene formation, with an initial production of 1.8 million cubic feet of natural gas per day. This producing reservoir consists of light and dark gray sandstone with fine, rough, regularly sorted quartz grains, consolidated in argillaceous material and calcareous cementing, with average porosity and saturation of 17 and 58 percent, respectively. The computed well log is shown in Figure 4.32, indicating the non-associated gas producing interval. 54

27 PLATINADO-1 Figure 4.30 Depth configuration of the producing sand corresponding to the Queen City formation of the Eocene. Acuario-1 Rancherías-1 Platinado Queen City Top Figure 4.31 Seismic interpretation showing the structural style in which the Platinado-1 well is located. The tectonic is compressional with growth faults. 55

28 Discoveries GRds (GAPI) GAS (ugas) PP1 () N1 () GR_N1ds (API) DENS (gr/cc) PP2 () N2 () GR_N2ds (API) DIP (DEG) PP3 () TVD M CALI (IN) DEPTH manifestation core M pt1 core AO90 (OHMM) SW (Dec) PHIE (Dec) NPHIds (V/V) K_BURGOS VCL (Dec) AT60 (OHMM) PayFlag () RHOBds K_N1ds (md) PHIE (Dec) hydrocarbon AT30 (OHMM) PHI_N1ds K_N2ds (md) BVW (Dec) x-over AT90 (OHMM) PHI_N2ds K_NP (md) sand PHI_NP (dec) shally sand pt2 net pay clay pt3 hydrocarbon water PT3 ( m) 10/64", P=2600 psi, Qg= MMcfd, Qa= 90 bpd, Ar= Tz N1 ( m) 3244 m GL= 578 u, DENS. From 1.92 to 1.88 gr/cc Figure 4.32 Petrophysical evaluation with the results of the production test made at interval 3,235-3,255 meters in the Queen City formation of the Eocene. N W E S Reynosa Francisco Cano Reynosa Villa Cárdenas Cobres-1 Guillermo Prieto Gulf of Mexico km Figure 4.33 Map showing the location of the Cobres-1 well to the Southeast of Reynosa, Tamaulipas. 56

29 Reserves Structural Geology The well incorporated natural gas reserves in sandstones in the Middle Eocene Queen City formation. The 3P original volume of gas is billion cubic feet. The estimated 1P, 2P and 3P reserves are 3.4, 3.4 and 63.5 billion cubic feet of natural gas, respectively. The well is located in a block within a structure lying in a Northeast-Southwest direction; the East and West portions are limited by normal faults, with a fall to the East, Figure Stratigraphy Cobres-1 The Cobres-1 well is located approximately 100 kilometers Southeast of Reynosa, Tamaulipas, Figure 4.33, within the Euro-Galaneño 3D seismic study. The purpose was to corroborate wet gas reserves in two sandstone horizons in the Frío Marino play of the Oligocene. The well penetrated the geological column composed by sediments of the Frío Marino formation of the Middle Oligocene to sediments of the Middle Miocene Oakville formation, outcropping sediments of the Pliocene-Pleistocene and reaching 4,000 vertical meters. The geological model proposed for the producing sand consists of a complex of barrier islands cut by distributor channels, Figure Figure 4.34 Structural configuration in depth showing the reserve limits of the sand 2,930 where the production test number four was carried out. 57

30 Discoveries Figure 4.35 Map of facies with presence of barrier bar and distributary channels at a stratigraphic level corresponding to interval 2,946 of the production test number four. Seal Rock According to the analysis of the geophysical well logs, the seal rock corresponds to shale with a thickness of approximately 40 meters. Trap sandstone of the Frío Marino formation, with rough, regularly sorted quartz grains, with an average porosity of 18 percent, permeability of 3 millidarcies and water saturation of 57 percent. The computed well logs are shown in Figure 4.37, indicating the two gas and condensate producing intervals. The gas contained in the reservoir determined by mean of production test number four is in a structural trap, limited by normal faults, Figure Reservoir The producing reservoir (2,945-2,955 and 2,930-2,938 meters) is made up of light and dark gray Reserves The well is a producer of gas and condensate in sandstone of the Frío Marino Oligocene formation. The 3P original volume of gas is 41.2 billion cubic feet. The estimated 1P, 2P and 3P reserves are 3.2, 20.4 and 34.3 billion cubic feet of natural gas, respectively. 58

31 NE Euro-101 Euro-1 Cobres -1 SW Producer horizon PT-4 3,166 m 3,600 m 4,300 m Figure 4.36 Seismic cross section showing the seismic-structural interpretation at the producing horizon level and the sand 2,429 horizon of the Oligocene in the Frío Marino formation. Figure 4.37 Petrophysical evaluation showing the producer interval and the results of the field tests. 59

32 Discoveries Veracruz Basin Structural Geology Papán-1 The well was drilled 65 kilometers Southeast of Veracruz, Veracruz, Figure 4.38, and it is geologically located in the Veracruz Basin. The purpose was to evaluate the Northern part of the basin, the sands of sequence 6.9 of the Upper Miocene that form discontinuous and sub-parallel horizons of sands associated with turbidite basin floor fans, which are producers in the Apértura, Lizamba, Playuela, Vistoso, and Cocuite fields. The well turned out to be a producer of natural gas and in 2005 it incorporated the highest volume of non-associated gas. Structurally, it corresponds to the Eastern flank of an anticline. The sandy sequence of the reservoir was deposited under a sand flow mechanism that was developed in the final synchronic stage associated with the anticline folding. The amplitude anomaly obtained from the seismic information shows relative concordance with the curve levels and a decrease in the amplitude in the center of the field caused by the reduction in the incidence of seismic waves in which lower seismic information density was obtained due to the presence of the Joachín town, Veracruz, as is shown in Figure Veracruz N W E S Gulf of Mexico Playuela Alvarado Apértura Cocuite Papán-1 Lizamba Tierra Blanca Cosamaloapan Tres Valles Figure 4.38 Map showing the location of the Papán-1 well at 65 kilometers Southeast of Veracruz, Veracruz. 60

33 1780 Loc. Huace-1 Probable Area Probable Area 1700 F 1690 Papán-1-1 Figure 4.39 Amplitude anomalies showing in red the areas of oil saturated sands within the Papán field Stratigraphy The well is located in the Veracruz Tertiary Basin that regionally corresponds to a large depression where terrigenous shale, sandstone and conglomerate sediments were deposited. The sedimentary systems interpreted regionally correspond to environment of submarine fans, basin floor fans, deltas, progradations and channels, whose ages range from the Paleocene to the Recent. Figure 4.40 Detail of the seismic line 2,890 showing the high amplitudes of the producer turbidity sand in the Papán field. 61

34 Discoveries CORRELATION RESISTIVITY DEN-NEUT M HYDROCARBON POROSITY K PAY LITHOLOGY 1692 m PT m Evaluation average values Sw=35-40 % Ø = % Rt= 8-40 O.m K= 210 md Core average values Ø= 27 % K= 560 md Figure 4.41 Petrophysical evaluation showing the interval tested and the petrophysical parameters evaluated. The stratigraphic column drilled by the well corresponds to sedimentary rocks from the Upper Miocene to Recent, and they are mostly composed of shale and some sandstone horizons. Tr a p This is a combined trap, with a more marked structural component, which permits entrapment of hydrocarbons in the upper part of the anomaly. The stratigraphic component is a wedging towards the structural accumulation where the presence of sands was controlled by sedimentation in the structural paleorelief in the lower part of the continental shelf and on the basin floor, as can be seen in Figure Reservoir The reservoir is stratigraphically located in the Upper Miocene, consisting of a body of sand that is wedged to the West against a structural high. The porosity ranges from 23 to 30 percent and the water saturation is 35 to 40 percent. The production tests carried out in the 1,692-1,701 meter interval corroborated natural gas in the Upper Miocene horizon, with initial production rates of 1.9, 3.2 and 4.7 million cubic feet of gas per day. The interpreted well log is shown in Figure 4.41, indicating the oil and gas producer interval. Reserves Seal The group of reservoirs discovered by the Papán1 and Huace-1 wells adds an 3P original gas vol- The seal rock consists of an interstratified sequence of shale of the Miocene age with broad regional distribution. ume of billion cubic feet. The 1P, 2P and 3P reserves estimated for the Papán field are 237.9, and billion cubic feet of natural gas, respectively. 62

35 N W E S Frontera Coatzacoalcos Villahermosa Tiumut km Figure 4.42 Location of the Timut-1 well, 88 kilometers Southeast of Villahermosa, Tabasco. Southeastern Basins Stratigraphy Tiumut-1 Located in the Cinco Presidentes Integral Business Unit of the Southern Region, the well is 88 kilometers Southeast of Villahermosa, Tabasco, Figure Two sands bodies were identified that incorporate reserves within the sedimentary sequence in the Plio-Pleistocene and two in the Upper Miocene. Structural Geology The well was drilled to the Upper Miocene level in a symmetric anticline structure, sectioned in the Northern part by discordance. The main axis lies Northwest- Southeast and the Southeast flank is affected by a fault. Additionally, there is a normal closure formed by a dip structure and stratigraphic closure by sand wedging, Figure The stratigraphic column is formed by a thick sequence of clay-sandstone of the Plio-Pleistocene to the Upper Miocene, with fluvial-deltaic environments of bars with a deltaic front in the Plio-Pleistocene, Figure 4.44, and turbidite slope fans in the Miocene. The sand bodies are fine to medium grain, slightly argillaceous and well sorted. Trap The trap has a largely structural component, as can be seen in Figure Source Rock The source rock of most of the fields in the Macuspana sub-basin is clay with organic content of the Neogene and principally of the Miocene. 63

36 Discoveries T-4250 N T-4225 T-4228 L-5400 W E S T-4200 LA CENTRAL-5 ACUNAMIENTO LA CENTRAL-6 L-5375 T LOC-T-92 L-5350 L-5425 LOC-T-52 L L-5400 L-5314 LOC-T-32D L L-5375 LA CENTRAL-3 TIUMUT-1 F-1 T-4275 L-5350 LA CENTRAL-4 T-4250 F L-5325 F-3 T-4225 T m Figure 4.43 Structural plan of the producing sand A-8 top in the Upper Miocene. Distributary Channels Barriers Deltaic Front Barrier Island Deltaic Plain Swamps Coast Line Deltaic Front Figure 4.44 Conceptual geological model of the deposit environments in the Plio-Pleistocene and Upper Miocene in the area of the Tiumut-1 well. N 64

37 Seal Tiumut-1 The seal is formed by bodies of plastic shale of the Tertiary interspersed with sand bodies. Reservoir The reservoirs are in siliclastic rocks of the Plio-Pleistocene and Upper Miocene. In the Plio-Pleistocene, the average sand porosity is 16 percent and the average water saturation is 30 percent. The average porosity is 13 percent and the saturation is 20 percent in the Upper Miocene. The production tests gave rise to initial production rates of 290 barrels of volatile oil of 48 API degrees and 3 million cubic feet of gas per day. Figure 4.46 shows the interpreted well logs at the Plio-Pleistocene and Upper Miocene producer intervals. Reserves The group of reservoirs discovered by the Tiumut- 1 well adds an 3P original volume of 23.1 million barrels of oil and 33.1 billion cubic feet of gas. The Figure 4.45 Seismic cross section showing the stratigraphic-structural nature of the trap. 1P, 2P and 3P crude oil reserves are 1.2, 2.6 and 5.0 million barrels, respectively. The 1P, 2P and 3P natural gas reserves are 3.0, 12.4 and 14.4 billion cubic feet, respectively. Figure 4.46 Petrophysical evaluation showing the intervals tested in the Plio-Pleistocene and Upper Miocene. 65