Premier Geo-Exel Pan Pacific Power

Inc. Philippines Corporation

Energy Consultants & Specialists

Integrated Geoscientific Evaluation of the

Cagua-Baua Geothermal Project

Part 1: Executive Summary & Geothermal Model

By
DISCLAIMER: Pan Pacific Power Phils. Corporation
This report is presented on behalf of and for the benefit of the Department of Energy (DOE) of the
For the
Philippines and is subject to and issued in connection with the agreement on the “Geothermal
Service Contract (GSC)” with GSC No. 2011-12-028 between Pan Pacific Power Phils.
Corporation (PPPPC) and the DOE. No legal liability or responsibility is assumed by PPPPC for
the accuracy, completeness and usefulness of information contained in this report with respect to
its use by any third party. Reference herein to any specific commercial product, process, or
service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or
imply its endorsement or recommendation. This disclaimer shall apply notwithstanding that the
report may be made available to other persons for an application for permission or approval or to
fulfill a legal requirement.

Department of Energy Renewable Energy

Management Bureau Geothermal Energy
 Premier Geo-Exel Inc.
Energy Consultants & Specialists

DISCLAIMER:

This report is presented on behalf of and for the benefit of the Department of Energy (DOE) of the
Philippines and is subject to and issued in connection with the agreement on the “Geothermal
Service Contract (GSC)” with GSC No. 2011-12-028 between Pan Pacific Power Phils.
Corporation (PPPPC) and the DOE. No legal liability or responsibility is assumed by PPPPC for
the accuracy, completeness and usefulness of information contained in this report with respect to
its use by any third party. Reference herein to any specific commercial product, process, or
service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or
imply its endorsement or recommendation. This disclaimer shall apply notwithstanding that the
report may be made available to other persons for an application for permission or approval or to
fulfill a legal requirement.

1
 Premier Geo-Exel Inc.
Energy Consultants & Specialists

Table of Contents
EXECUTIVE SUMMARY........................................................................................1

1.0 INTRODUCTION............................................................................................6
1.1 OBJECTIVES.................................................................................................6
1.2 LOCATION AND ACCESSIBILITY.......................................................................6
1.3 TOPOGRAPHY AND DRAINAGE.......................................................................7
1.4 PREVIOUS GEOTHERMAL ENERGY EXPLORATION.........................................11

2.0 RESOURCE BOUNDARY & CAPACITY ESTIMATES..............................14

2.1 POWER DENSITY METHOD OF ESTIMATION..................................................14
2.2 MONTE CARLO SIMULATION........................................................................19
2.2.1 General...............................................................................................19
2.2.2 Cagua Anomaly (CA) Resource Area................................................21
2.2.3 CA Resource Extended Maximum Area............................................29
2.2.4 Baua-Sikaw Resource Area...............................................................33
2.2.5 Baua-Sikaw Resource Outflow Area..................................................39

3.0 SYNTHESIS OF INTEGRATED GEOSCIENTIFIC STUDIES....................43

3.1 FAVORABLE GEOLOGICAL AND GEOTHERMAL ENVIRONMENT..........................43
3.2 PREPONDERANCE OF THERMAL INDICATORS.................................................44
3.3 STRUCTURAL FRAMEWORK, MECHANICS AND PERMEABILITY..........................44
3.4 WATER TYPES AND SOURCES OF HYDROTHERMAL FLUIDS.............................45
3.5 SURFACE AND PROJECTED SUB-SURFACE RESERVOIR TEMPERATURES..........46
3.6 CG-1D & CG-2D PERMEABILITY & TEMPERATURE IMPLICATIONS..................47
3.7 INDICATIVE AND SIMULATED RESOURCE CAPACITIES......................................48

4.0 POSTULATED GEOTHERMAL MODEL....................................................51

5.0 RECOMMENDATIONS................................................................................55

2
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Energy Consultants & Specialists

List of Figures
Figure 1.1 Regional Map - Cagua-Baua Geothermal Project (Comexco,
1997)...............................................................................................9
Figure 1.2 Detailed GSC Map - PPPPC Cagua-Baua Geothermal Project
(DOE)............................................................................................10
Figure 1.3 SRT Isoresistivity Map at 500masl (Benito, 1991).......................13
Figure 2.1 Base of Conductor Isoresistivity Contour Map.............................16
Figure 2.2 Provisional Resource Boundaries for Power Density Calculations..
..........................................................................................................
17
Figure 2.3 Resource Capacity Estimates (Power Density Method)..............18
Figure 2.4 Inferred Extent of Reservoir Depths for Cagua Resource (Based
on CSMT Survey).........................................................................22
Figure 2.5 CG-1D Estimated Reservoir Depths and Temperature Profiles. .23
Figure 2.6 Modified Cagua Resource Areas for Monte Carlo Stored Heat
Simulation.....................................................................................24
Figure 2.7 Extended Maximum Resource Area of the Cagua Anomaly
Resource......................................................................................30
Figure 2.8 Baua-Sikaw Resource Area for Monte Carlo Stored Heat
Simulation.....................................................................................34
Figure 2.9 Inferred Extent of Reservoir Depths for Baua-Sikaw Resource
(Based on CSMT Survey).............................................................35
Figure 4.1 Postulated Geothermal Model – Cagua-Baua Geothermal Project.
..........................................................................................................
54

3
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List of Tables
Table 2.1 Summary of Input Parameters and Results of the Monte Carlo
Simulations of the Stored Heat – Cagua Main Resource Area....27
Table 2.2 Summary of Potential Power Output for the Cagua Main
Resource Area – Monte Carlo Simulation....................................28
Table 2.3 Summary of Input Parameters and Results of the Monte Carlo
Simulations of the Stored Heat – Cagua Extended Maximum
Resource Area..............................................................................31
Table 2.4 Summary of Potential Power Output for Extended Maximum
Boundary Cagua Resource Area – Monte Carlo Simulation........32
Table 2.5 Summary of Input Parameters and Results of the Monte Carlo
Simulations of the Stored Heat – Baua-Sikaw Resource Area....37
Table 2.6 Summary of Potential Power Output for Baua-Sikaw Resource
Area – Monte Carlo Simulation....................................................38
Table 2.7 Summary of Input Parameters and Results of the Monte Carlo
Simulations of the Stored Heat – Baua-Sikaw Outflow Area.......41
Table 2.8 Summary of Potential Power Output for Baua-Sikaw Resource
Outflow Area – Monte Carlo Simulation.....................................42

4
 EXECUTIVE SUMMARY
1. Surface geothermal exploration surveys were conducted over Pan Pacific
Power Phils, Inc. (PPPPC) Geothermal Service Contract (GSC) No. 2011-12-
028 concession block in Cagayan in October, 2015. The geoscientific
surveys, including geological and geochemical studies of Tekton Geothermix
Inc. and CSMT geophysical surveys by Premier Geo-Exel Inc., were
conducted over the Cagua-Baua Geothermal Project. These activities were
done as a compliance by PPPPC on its work program in its service contract
with the DOE.

2. This report is a consolidation of the results of the latest geoscientific studies

done in the Cagua-Baua Geothermal Prospect in 2015. The primary
objectives are to formulate a conceptual geothermal model based primarily on
the results of CSMT interpretations and geochemical studies and to provide
resource capacity potentials of the project through simulation processes and
calculations.

3. The project site is underlain by six (6) major stratigraphic units namely;
Palawig Formation (Pre-Oligocene), Gonzaga Formation (Late Oligocene to
Pliocene), Tabungon Formation (Late Oligocene to Pleistocene), Sierra
Madre Pluton (Miocene), Quaternary Volcanics (Pleistocene to Recent), and
Quaternary Alluvium (Recent) (Bayrante, et. al., 1991).

4. Terrain analysis of shaded relief images of Digital Elevation Model (DEM)

data covering the project site showed dominant NE-SW and NNW-SSE-
trending structures. The NE-SW structures are inferred thrust faults (dip SE)
and the NNW-SSE are strike-slip faults as manifested on regional features.
The general trend of the mapped structures is correlated to the effects of the
convergence of the Benham Rise to the island of Luzon (Bayrante, et al.,
1991 and Tekton Geothermix, 2015).

5. The distribution of the thermal springs in the project area follows a typical
andesitic volcano model. Ascending magmatic vapors from a buried
degassing magma beneath Mt. Cagua rise to the surface in the Maasok
 solfatara and mud pools where it encountered shallow groundwater at high
elevation (856m) close to the crater of the andesitic volcano. SO4-rich springs
(Maasok, Paminta) are found at high elevations near the hot central core of
the system; with HCO3 waters (Kabinlangan) found at the margins of the field
and Cl waters at greater distances (~12 to 15km) at low elevations seeping
out in river beds (Manaring and San Jose).

6. The Sikaw hot spring found in the Mt. Baua vicinity falls in the mature neutral
Cl portion of the Cl-HCO3-SO4 plot. It has a dilute acid SO4 composition
typical of waters where only acidic steam rich in H2S condenses in surface
waters. The area where the springs discharge has extensive steaming altered
grounds denoting boiling conditions at depth.

7. The thermal springs and solfataras of both Mts. Cagua and Baua have
surface temperatures ranging from 40°C to 80°C. For the Cagua sector,
which have active solfataric activities, the best reservoir temperature
estimates can be gathered from gas or steam chemistry data. Well CG-1D
drilled in Cagua in the 1990’s, gas temperature estimates using TH2/Ar are
already in excess of 300oC (Clemente, 1990).

8. Geochemistry further suggests that the Baua-Sikaw area, with the numerous
and impressive hot springs and the extensive steam altered grounds, may be
related to a separate high temperature (>280 oC) geothermal system as
denoted by its very different and unique Cl/B ratio. The heat source driving
the system may be related to Mt. Baua or maybe to a local intrusive body
centered in the Sikaw area. (Tekton, 2015).

9. The primary outcome of geophysical CSMT survey is the delineation of two

(2) significant and distinctive low resistivity anomalies (</= 10 -m
isoresistivity contour). These are the Cagua Anomaly (CA) and the Baua-
Sikaw Anomaly (BSA), respectively. These anomalies clearly define separate
and unique resource configurations bounded by a flawless divide of areas
with high resistivity values. Current geoscientific indications show that the CA
 is noted to be associated with Mt. Cagua while BSA may be related to Mt.
Baua.

10. The interpreted features of these two geophysical anomalies, when combined
with available geological and geochemical data, strongly suggest the
presence of two separate high temperature geothermal resources within
the northern sector of the GSC concession block.

11. The resource boundaries for Cagua and Baua-Sikaw areas are basically
drawn from CSMT isoresistivity contours, following the outline of the base of
the conductor (BOC) delineated layer at about 1000mbsl. Two (2) striking
updomed structures centered at CA and BSA anomalies are revealed at this
depth. The conductors are domed separately in Mt. Cagua and at Mt Baua
where the apex is modelled at an elevation of about 900mbsl.

12. CA, which encloses the Mt. Cagua caldera collapse and the Maasok
solfataras, has an estimated area of 6km2. Well CG-1D, with a bottom hole
temperature of greater than 300°C was drilled at the center of this resource
by the then PNOC-EDC in the early 1990’s. Another deep geothermal well,
CG-2D, was drilled to the northwest of CG-1D.

13. The estimated 11km2 resource area of BSA comprises the delineated shallow
conductor north of Mt Baua and an eastward extension to include the Sikaw
solfatara region.

14. Using the “Power Density” method, that assumes a power value of
12MW/km2, the potential capacity of the Cagua anomaly is about 72MWe
while the Baua-Sikaw resources is about 130MWe, respectively.

15. Monte Carlo simulations established four (4) possible resource areas; two
each for Cagua and Baua-Sikaw, respectively. These areas are a) Main
Cagua Resource Area (5.06km2) with a stored heat capacity of 77.7MWe
(69.7MWe at P50) or b) Cagua Extended Maximum Boundary (12.54km2)
with a stored heat capacity of 109.9MWe (95.6MWe at P50) and c) Main
Baua-Sikaw Resource Area (5.48km2) with a stored heat capacity of
 63.1MWe (56.6MWe at P50) with; d) Baua-Sikaw Outflow Region (2.75km2)
with a stored heat capacity of 3.2MWe (2.9MWe at P50).

16. Logically, resource capacity estimates using Monte Carlo simulations are
evidently readily acceptable as a more reliable system than that of the Power
Density method. This is in particular if deep drilling information is present
where subsurface reservoir temperature profiles can be measured accurately
if used as basis for reservoir thickness determinations.

17. The interpretation and development of the Geothermal Model for the Cagua-
Baua Geothermal Project was based significantly with the results of CSMT
survey; coupled to a very large and substantial extent with the geological and
geochemical studies done on the numerous and impressive thermal
manifestations that abound in the project. Results of the two (2) deep
geothermal drilling done in the area in 1990 were also taken into
consideration.

18. Based on the results of the current geoscientific surveys, the postulated
geothermal model of Cagua-Baua Geothermal Project is proposed, depicting
two, separate and distinctive major upflow zones, the Cagua Upflow Zone
and the Baua-Sikaw Upflow Zone, respectively.

19. The upflow zone of the Cagua resource lies within the Cagua caldera
collapse. Well CG-1D drilled within the boundary of the anomaly had
measured bottomhole temperatures exceeding 300°C. The major outflow is
towards the southwestern direction. The sharp gradients of the bottom of the
conductive isoresistivity contour towards the northwest and southwest
directions delineate the margins of the Cagua resource.

20. The upflow region of the Baua-Sikaw geothermal system is modelled beneath
Mt Baua. It is depicted to have estimated reservoir temperatures of more than
280°C (Tekton Geometrix, 2015). The major outflow region is towards the
east as manifested by hot seepages of Sikaw hot springs along the Palawig
River.
21. A geophysical divide of high resistive layers separates the two (2) geothermal
upflow regions of CA and BSA, respectively. The absence of thermal
manifestations within this area and the uniqueness of the chemistry of waters
of the two anomalies further supports the hypothesis that the Cagua and
Baua-Sikaw hydrothermal areas are two (2) separate geothermal entities or
systems.

22. The primary recommendation is to conduct a follow up geophysical survey

over the CA and BSA thermal areas and adjacent areas utilizing a deep
probing geophysical tool such as MagnetoTellurics (MT). This is to determine
exactly the possible extent and geometry of the geothermal reservoir. In
addition, this is to investigate deeper beyond the depth-penetrating capacity
of CSMT equipment to determine the possible extent and thickness of the
reservoir, and finally, to confirm and clearly define the anomaly divide
between the CA and BSA.

23. Secondary but similarly important additional studies are: a). aerial photo
interpretation (1:15,000 scale) and LIDAR/LADAR delineation; b). semi-
detailed geological and structural mapping (post aerial photo interpretation
and/or LIDAR/LADAR structural delineation); c). fluid and gas sampling for
more accurate geothermometry studies d). isotopic investigations to study the
origin and recharge of the Baua-Sikaw and Cagua geothermal systems and
to determine the age of the geothermal fluids from both systems.

24. Results of these studies, together with the geophysical (MT) evaluation and
another Monte Carlo simulation for resource evaluations, will be the basis in
the conduct of a preliminary (pre-drilling) resource assessment of the Cagua-
Baua Geothermal Project.
1.0 INTRODUCTION
As part of its work program commitments to its Geothermal Service Contract (GSC
No. 2011-12-028) agreement with the Department of Energy (DOE), Pan Pacific
Power Phil. Corporation (PPPPC) engaged the services of Tekton Geothermix Inc. to
conduct geological and geochemical studies in Cagua-Baua in October, 2015.
Likewise, PPPPC employed Premier Geo-Exel Inc. (PGEI) to carry out a 100-
stations Controlled Source Magneto Telluric (CSMT) geophysical survey of the
Cagua-Baua Geothermal Project.

These studies were done to be able to determine the following: a) geothermal

resource potential of the project b) to formulate a conceptual geothermal model of
Cagua-Baua c) to conduct resource estimates and d) to determine the type of power
generation that the geothermal prospect may be suitable for.

This report summarizes and assimilates the results of the geoscientific studies done
in Cagua-Baua Geothermal Project.

1.1 Objectives

 To conduct integrated resource assessment reports that will incorporate the

geological, geochemical and geophysical surveys done in Cagua-Baua
 To develop conceptual models of any geothermal reservoir and obtain
possible volumetric estimates
 To determine the possible existence or presence of a substantial geothermal
reservoir that could justify the deployment of a high capacity, conventional
power plant system for geothermal energy development
 To present the results of the Integrated Reports to the Department of Energy
(DOE) for stated and written acceptance

1.2 Location and Accessibility

The PPPPC contract area referred to as the Cagua-Baua Geothermal Project (C-
BGP), is located in northern Luzon, particularly within the municipalities of Santa
Ana, Gonzaga and Lal-lo, Cagayan province. The project area is approximately
69,800 hectares in total land area. The province geographically lies in the
northeastern tip of Luzon Island.

The project is bounded on the north by the Balintang Channel and the Babuyan
Group of Islands; on the east by the Pacific Ocean; on the south by the Isabela
Province; and on the west by the Cordillera Mountains.

Figures 1.1 and 1.2 show the regional and detailed maps of C-BGP, respectively.

The project site is easily accessible from Manila to Gonzaga and Santa Ana mainly
through the well-paved Maharlika National Highway and along newly-concreted
municipal highways. Mt. Cagua is accessible through different entry points in the
adjacent barangays. The barangay road in Magrafil, which was developed by PNOC-
EDC during their drilling campaign in 1990, is the main access road. Old logging
roads still exist but are no longer accessible by motorized, four(4)-wheeled vehicles
due to vegetation overgrowth.

1.3 Topography and Drainage

Cagayan is characterized by vast plains bordered by mountain regions. Rolling to

moderately steep foothills of the Sierra Madre and Cordillera Mountains separate the
valleys and mountain ranges.

The project site exhibits contrasting topography. Near the coast and along
floodplains of large river systems, subdued topographies or plains predominate.
These areas are developed into agricultural lands, particularly in the coastal plains
that abut against foothills. To the east, the topography becomes rugged and ground
elevations increase gradually, reaching approximately more than 1130masl at the
crest of Mt. Cagua ridge. Along and around this ridge are conical peaks that indicate
the development of lava domes.

The drainage systems within the area are generally trellis to parallel in character.
The major rivers are Baua, Palawig, Casambalangan, and Tangatan Rivers,
respectively. These drainage systems flow west-northwest and drain to the Babuyan
Channel. The Baua and Casambalangan Rivers dissect through the municipality of
Gonzaga, with the headwaters emanating from Mt. Baua and the Sierra Madre
mountain range. The Palawig and Tangatan Rivers drain the municipality of Sta.
Ana, emanating from the Palawig mountain range.
Figure 1.1 Regional Map - Cagua-Baua Geothermal Project (Comexco,
1997)
Figure 1.2 Detailed GSC Map - PPPPC Cagua-Baua Geothermal Project (DOE)
 1.4 Previous Geothermal Energy Exploration

The Philippine National Oil Company - Energy Development Corporation

(PNOC•EDC) conducted geothermal energy exploration of the Mt. Cagua prospect
between 1988 and 1989. Semi-detailed geological and structural mapping,
geochemical studies and geophysical surveys in the form of Schlumberger
Resistivity Traversing (SRT) and limited Vertical Electrical Soundings (VES) were
carried out by PNOC-EDC geoscientists.

The results of SRT and VES measurements delineated a low resistivity anomaly that
encloses the main thermal manifestations in the vicinity of Cagua Volcano (Bayrante,
et. al., 1990).

The SRT done in 1988-89 was re-interpreted by Benito (1991) using 1D and 2D
modeling. The results show an elongated conductive layer that covers most parts of
the Mt. Cagua area as resistivity anomalies. Two upflow zones were inferred; one is
connected with the geothermal system at Mt. Cagua Volcano, which has been
identified in an earlier survey by PNOC-EDC, and the other to the geothermal
system associated with the eastern Mt. Baua Volcano.

Figure 1.3 shows the SRT isoresistivity map at 500masl as re-interpreted by Benito
in 1991.

Vertical electrical soundings (VES) were later conducted by Comexco and the DOE
in 1997. Results of the VES survey confirmed the SRT anomaly boundaries as
suggested by Benito in 1991.

Subsequent drilling of two exploratory wells, CG-1D and CG-2D, were completed in
Mt. Cagua by PNOC-EDC as a result of the geoscientific exploration done. Although
CG-1D revealed the presence of an active heat source with maximum recorded
temperatures above 300°C, both wells did not indicate sustainable permeability
qualities, most likely due to poorly-defined structural drilling targets rather than a
reflection of the permeability characteristics of the Mt. Cagua geothermal system as
a whole.

Locations of CG-1D and CG-2D are also shown in Figure 1.3.

The most current geoscientific studies carried out in C-BGP are the geological and
geochemical studies done by Tekton Geothermix Inc. and the geophysical survey
(CSMT) accomplished by Premier Geo-Exel Inc., both done in 2015.
Figure 1.3 SRT Isoresistivity Map at 500masl (Benito, 1991)
2.0 RESOURCE BOUNDARY & CAPACITY ESTIMATES

2.1 Power Density Method of Estimation

Solfataras and fumaroles are impressive surface thermal manifestations that are
strong indicators of a promising high temperature geothermal resource. As these are
often located or manifested close to the hottest region of a geothermal system, these
are also included in the delineation of resource boundaries during the initial phase of
geothermal exploration and evaluation.

The resource boundaries for Cagua and Baua-Sikaw areas are basically drawn from
CSMT isoresistivity contours, following the outline of the base of the conductor
(BOC) delineated layer at about 1000mbsl. Delineation of the resource boundaries is
also in consideration and correlation with the impressive surface thermal
manifestations abounding in these areas.

The BOC isoresistivity contour map of the project is shown in Figure 2.1.

The Cagua resource, which encloses the Mt. Cagua caldera collapse and the
Maasok solfataras, has an estimated area of 6km2. Well CG-1D, with a bottom hole
temperature of greater than 300°C was drilled at the center of this resource in the
early 1990’s.

The estimated 11km2 resource area of Baua-Sikaw comprises the delineated

shallow conductor north of Mt Baua and an eastward extension to include the Sikaw
solfatara.

The provisional resource boundaries for Cagua and Baua-Sikaw are shown in
Figure 2.2.

During the early stages of geothermal exploration and development, as a standard

and accepted practice, geochemists normally invoke “power density” to estimate the
resource and capacity of a geothermal system. This is usually expressed in terms of
“MW/km2”. Several authors have their own estimates of “MW/km 2”. A few suggested
that typical power density estimates used during the exploration stage are 10-15
MW/km2. Recent statistical analysis by Wilmarth and Stimac (2015), using
distribution of power densities of 66 geothermal fields worldwide, yielded a median
value of population density of 12MW/km2.

Using the power density method, at a power density value of 12MW/km2, the
potential capacity of the Cagua anomaly is about 72MWe while the Baua-Sikaw
resources is about 130MWe, respectively.

The resource boundaries and capacity estimates using the power density method for
Cagua and Baua-Sikaw are shown together in Figure 2.3.

Monte Carlo simulation for capacity estimates for both potential geothermal
resources are discussed in detail in Section 2.2.
Figure 2.4 Base of Conductor Isoresistivity Contour Map
Cagua-Baua Geothermal Project
Figure 2.5 Provisional Resource Boundaries for Power Density Calculations
Cagua-Baua Geothermal Project
Figure 2.6 Resource Capacity Estimates (Power Density Method)
Cagua-Baua Geothermal Project
 2.2 Monte Carlo Simulation
2.2.1 GENERAL

The sizing of the field development of a geothermal resource is usually based on the
probable amount of heat in the reservoir contained in the fluid and rock in-place for a
particular volume of reservoir. The amount of stored heat in a reservoir volume
depends on the area and the thickness of the geothermal resource. It is also
dependent of the initial temperature and the final temperature at the end of its
productive life. Other parameters that influence the amount of stored heat are the
physical properties of the reservoir rock and the type of fluid in the rock volume.

The Monte Carlo simulation calculates the stored heat in-place in the reservoir using
the probabilistic method to determine the most likely size of the development in
terms of electrical generation for 25-30 years.

The stored heat in-place in the Cagua-Baua Geothermal Project reservoir using the
equations below was used to determine the most likely size of the development of C-
BGP.
    
Q  A  h   Cr   r  (1   )  (Ti  T f )   si    (1  S w )  (hsi  hwf )   wi    S w  (hwi  hwf ) 

where:
where: QQ == stored
stored heat
heat
AA == areal
areal extent
extent of
of the
the reservoir
reservoir
hh == average
average reservoir
reservoir thickness
thickness
Ø = porosity
Ø = porosity
TTii == initial
initial average
average reservoir
reservoir temperature
temperature
TTff == base temperature
base temperature
CCrr == specific
specific heat
heat of
of the
the rock
rock at
at reservoir
reservoir conditions
conditions
rrsisi,r
,rwiwi == steam
steam andand water
water density
density at
at reservoir
reservoir temperature
temperature
hhsisi,h
,hwiwi == steam
steam andand water
water enthalpies
enthalpies at at reservoir
reservoir temperature
temperature
hhwf = water enthalpy at base temperature
wf = water enthalpy at base temperature
SSww == relative
relative water
water saturation
saturation

 Q  Rf  c 
E 
 F L 

where:
where: EE == power
powerpotential
potential
QQ == total
totalstored
storedheat
heat
RRff == recovery factor
recovery factor
(fraction
(fractionof
of stored
storedheat
heatassumed
assumedto
tobe
be extractable)
extractable)
hhcc == conversion
conversionfactor
factor
FF == power
powerplant
plantcapacity
capacity factor
factor
LL == power plant life
power plant life
 2.2.2 CAGUA ANOMALY (CA) RESOURCE AREA

The volume of the reservoir was determined from the probable area and the
thickness of the resource as defined by the CSMT boundaries and the temperature
distribution or profile inferred from the measured temperature of the exploration well,
CG-1D.

The top of reservoir as interpreted from CSMT coincides with the bottom of the low
resistivity conductive layer. The 220oC formation temperature at CG-1D was also
measured within this depth horizon.

The top of reservoir was estimated by CSMT to be at 300mbsl with the maximum
reservoir depth at 2700mbsl. The minimum depth of the reservoir was estimated
from CG-1D at 1800m vertical depth from the surface with a 400m buffer for the
drainage volume below the minimum depth.

The minimum thickness of the reservoir in the Cagua geothermal resource was
estimated to be 1000m with a maximum thickness of 2400m. Conservatively, the
most-likely thickness was estimated to be 1700m.

Figure 2.4 is a cross section profile showing the inferred extent of reservoir depths
for the Cagua resource. Figure 2.5 shows CG-1D estimated reservoir depths and
temperature profiles.

The Cagua geothermal resource has a maximum area of 6.49km2 and a minimum
area of 3.08km2. The most-likely area is 5.06km2 as shown in Figure 2.6.
 Top
Top of
of Reservoir:
Reservoir: -- 300m,
300m, MSL
MSL

Minimum
Minimum Depth
Depth of
of Bottom:
Bottom: -1300m,
-1300m, MSL
MSL

Mostlikely
Mostlikely Depth
Depth of
of Bottom:
Bottom: -2000m,
-2000m, MSL
MSL

Maximum
Maximum Depth
Depth of
of Bottom:
Bottom: -2700m,
-2700m, MSL
MSL

Minimum
Minimum Thickness:
Thickness: 1000m
1000m
Most-likely
Most-likely Thickness:
Thickness: 1700m
1700m
Maximum
Maximum Thickness:
Thickness: 2400m
2400m

Figure 2.7 Inferred Extent of Reservoir Depths for Cagua Resource (Based on CSMT Survey)
 CG-1D
CG-1D DownholeTemperature
DownholeTemperature and
and Pressure
Pressure Profiles
Profiles
Temperature,
Temperature, (( oC)
o
C)
00 50
50 100
100 150
150 200
200 250
250 300
300 350
350 400
400

00

500
500

500
500

Sea
Sea Level
Level 00

1000
1000

-500
-500
Top
Top of
of 2-phase
2-phase
1500
1500 Zone
Zone

MSL)
(m., MSL)
Ave
Ave Temp
VD)

Temp
(m., VD)

310
3100CC
0
-1000
-1000
Depth, (m.,

Depth, (m.,
2000
2000
Minimum
Minimum Depth
Depth of
of Bottom
Bottom of
of Reservoir
Reservoir 331
33100CC
Depth,

Depth,
-1500
-1500

2500
2500

Most-likely
Most-likely Depth
Depth ofof Bottom
Bottom of
of Reservoir
Reservoir 356
3560CC
0
-2000
-2000

3000
Average
Average Drillable
Drillable Depth
Depth
3000

(Drainage
(Drainage Volume)
Volume)
-2500
-2500

3500
3500 Maximum
Maximum Depth
Depth of
of Bottom
Bottom of
of Reservoir
Reservoir

-3000
-3000

4000
4000
 Pressure,
Pressure, (MPag)
(MPag)

Figure 2.8 CG-1D Estimated Reservoir Depths and Temperature Profiles

 Cagua Geothermal Resource Areas Figure 2.9 Modified
Cagua Resource Areas for
(Used
(Used in
in the
the Monte
Monte Carlo
Carlo Stored
Stored Heat
Heat Simulation)
Simulation) Monte Carlo Stored Heat
2018000
2018000 Simulation

CG-2D
CG-2D

2017000
2017000
6.49
6.49 km
km22
(Maximum)
(Maximum)

CG-1D
CG-1D 5.06
5.06 km
km22
(m)
Northing, (m)

2016000
2016000
(Most-likely)
(Most-likely)
Northing,

3.08
3.08 km
km22
2015000
2015000 (Minimum)
(Minimum)

2014000
2014000

2013000
2013000

404000
404000 405000
405000 406000
406000 407000
407000 408000
408000 409000
409000
 Easting,
Easting, (m)
(m)

The average values of other input parameters including rock properties (i.e., rock density and rock thermal conductivity)
were also used for the stored heat calculations. These values are the norms used in calculations for most of Philippine
geothermal areas in a volcanic setting.

Volcanic rocks density ranges are from 2600 to 2750kg/m3. The reservoir porosity was estimated to be in the range of 4 to
8%, which represents the average porosity of reservoir formation with relatively low permeability.

The fluid density is taken from the range of reservoir fluid temperatures at 220 to 356oC. The most-likely temperature would
be 310oC as deduced from the downhole temperature data of CG-1D as well as the fluid and gas chemical data of the well.

The recovery factor was estimated from the relationship between porosity and recovery factor based on the average values
taken from various operating geothermal fields in the Philippines. The average recovery factor was estimated to be at 20%.

The conversion factor was taken from the average conversion factor of existing geothermal power plants which is a function
of the reservoir temperatures. The range of value was between 10.5 to 11.8% for a Cagua geothermal power plant.

The load factor of most of the operating geothermal plants ranges from 80 to 100% with an average of about 92%.

The rejection temperature was taken to be 180oC. This temperature would be the minimum temperature of the geothermal
fluid to flow to the surface without causing significant mineral deposits in the separators and waste water lines.
The plant life of geothermal power plants with no major maintenance activity would be between 25 to 30 years. Existing
geothermal plants still operate beyond 30 years but had major maintenance and repair activities on the power plants. For
the power plant to be installed at the Cagua geothermal area, a plant life of 30 years was used in the stored heat
calculations.

The input parameters summary used as a basis for the Monte Carlo simulation for the Cagua main resource area is shown
in Table 2.1.

The results of the Monte Carlo simulation of the stored heat for the Cagua main resource area is summarized in Table 2.2.
Table 2.1 Summary of Input Parameters and Results of the Monte Carlo Simulations of the Stored Heat –
Cagua Main Resource Area
 Sector Power Potential (MWe)
Minimum Most Likely Maximum
8.6 77.7 291.4
Main Cagua
Resource Area P90 P50 P10
34.3 69.7 131.4
Table 2.2 Summary of Potential Power Output for the Cagua Main Resource Area – Monte Carlo Simulation
 2.2.3 CA RESOURCE EXTENDED MAXIMUM AREA

The high temperatures (>320oC) measured in CG-1D indicated that the possible heat source underneath the Cagua
volcano is undergoing cooling and has not yet substantially cooled compared to other Philippine geothermal fields. It is
possible that sufficient temperatures for steam production may exist beyond the postulated boundary of the resource as
defined by the CSMT low resistivity anomaly. This may be due to heat conduction of the surrounding rock formation and
also probably by convection as suggested by the deep (i.e., deeper than 1000m from the surface) resistivity anomaly which
extend to the south and southeast towards the Baua-Sikaw anomaly.

The reservoir boundary could extend further south and southeast of the southern flanks of Cagua volcano considering that
the horizontal temperature gradient of (-) 22.3 to (-) 26.5oC per km would be similar to other Philippine geothermal fields.

Figure 2.7 shows the possible extended maximum boundary of the Cagua resource area.

A Monte Carlo simulation of the stored heat was made for the Cagua resource with extended maximum area of 12.54km2.
The same input parameters used in the calculations in the Cagua resource main area such as fluid and rock properties as
well as the other parameters including reservoir thickness, recovery factor, conversion factor, abandonment temperature,
plant factor and the plant life, were used in the simulation for the Cagua extended maximum resource boundary.

The input parameters summary used as a basis for the Monte Carlo simulation for the Cagua extended resource area is
shown in Table 2.3.
The results of the Monte Carlo simulation of the stored heat for the Cagua extended resource area is summarized in Table
2.4.
 Cagua
Cagua Geothermal
Geothermal Resource
Resource Areas
Areas
Extended
Extended Maximum
Maximum
(Used
(Used in
in the
the Monte
Monte Carlo
Carlo Stored
Stored Heat
Heat Simulation)
Simulation)
2018000
2018000

CG-2D
CG-2D

2017000
2017000

CG-1D
2016000
2016000
CG-1D 5.06
5.06 km
km22
(Most-likely)
(Most-likely)
Extended
Extended
(m)
Northing, (m)

Boundary
Boundary
Northing,

2015000
2015000

3.08
3.08 km
km22 12.54
12.54 km
km22
(Minimum)
(Minimum) (Maximum)
(Maximum)
2014000
2014000

Figure 2.10 Extended

2013000
2013000 Maximum Resource Area of
the Cagua Anomaly Resource

2012000
2012000

404000
404000 405000
405000 406000
406000 407000
407000 408000
408000 409000
409000 410000
410000
Easting,
Easting, (m)
(m)
Table 2.3 Summary of Input Parameters and Results of the Monte Carlo Simulations of the Stored Heat –
Cagua Extended Maximum Resource Area
 Sector Power Potential (MWe)
Minimum Most Likely Maximum
Extended 12.1 109.9 449.4
Maximum
P90 P50 P10
Boundary Cagua
44 95.6 196.5
Resource Area
Table 2.4 Summary of Potential Power Output for Extended Maximum Boundary Cagua Resource Area –
Monte Carlo Simulation
 2.2.4 BAUA-SIKAW RESOURCE AREA

The Baua-Sikaw geothermal resource as delineated by the CSMT low resistivity anomaly is located northeast of the Cagua
resistivity anomaly. It has a maximum area of 8.19km2 for the main reservoir and an additional area of 2.75km2 for the
outflow area towards the Sikaw thermal manifestations. The main reservoir has an estimated minimum area of 3.97 km2
and a most-likely area of 5.48 km2.

Figure 2.8 shows the Baua-Sikaw resource area CSMT low resistivity boundaries and the outflow region.

The thickness of the Baua-Sikaw reservoir was based on the shallowest depths of the bottom of the low-resistivity
conductive layer and a maximum drillable depth of 3000m. A 500m buffer to the maximum drillable depth was assumed to
take into account the drainage volume of the reservoir.

The maximum thickness of the reservoir in the Baua-Sikaw geothermal area was estimated to be 2400m. The most-likely
thickness was 1500m based on the deeper bottom of the conductive layer to the maximum drillable depth. The minimum
thickness of the reservoir of 700m, was taken from the deeper bottom of the conductive layer to same depth of the bottom
of the minimum reservoir thickness in the Cagua geothermal area.

Figure 2.9 is a cross-sectional profile across the Baua-Sikaw anomaly showing the estimated depths and thicknesses of
the reservoir.
There is no exploration well yet drilled in the Baua-Sikaw geothermal area where reservoir formation temperatures could be
directly measured. At the interim, reservoir source fluid temperatures could be deduced from geothermometers from the
thermal surface manifestations in the Baua-Sikaw geothermal area. Likewise, gas geothermometry is not currently
available.
 Baua-Sikaw Geothermal
Geothermal Resource
Resource Areas
Areas Figure 2.11 Baua-Sikaw
(Used
(Used in
in the
the Monte
Monte Carlo
Carlo Stored
Stored Heat
Heat Simulation)
Simulation) Resource Area for Monte
2021000
2021000 Carlo Stored Heat Simulation

2020000
2020000 Maximum
Maximum
8.19
8.19 km
km22
(m)
Northing, (m)

2019000
2019000
Northing,

Outflow
Outflow Area
Area
2.75 km
2.75 km22
Minimum
Minimum
2018000
3.97
3.97 km
km22
2018000

2017000
2017000
Most-likely
Most-likely
5.48
5.48 km
km22

2016000
2016000

411000
411000 412000
412000 413000
413000 414000
414000 415000
415000 416000
416000
Easting,
Easting, (m)
(m)
 Shallow
Shallow Outflow
Outflow
Shallowest
Shallowest Top
Top of
of reservoir:
reservoir: -300m,
-300m, MSL
MSL
Deeper
Deeper Top
Top of
of reservoir:
reservoir: -600m,
-600m, MSL
MSL

Minimum
Minimum
Minimum
Minimum Depth
Depth of
of Bottom
Bottom of
of Reservoir:
Reservoir: -1300m,
-1300m, MSL
MSL

Most-likely
Most-likely
Most-likely
Most-likely Depth
Depth of
of Bottom
Bottom of
of reservoir:
reservoir: -2100m,
-2100m,MSL
MSL

Maximum
Maximum
Maximum
Maximum Depth
Depth of
of Bottom
Bottom of
of reservoir:
reservoir: -2700m,
-2700m, MSL
MSL
Minimum
Minimum Thickness:
Thickness: 700m
700m
Most-likely
Most-likely Thickness:
Thickness: 1500m
1500m
Maximum
Maximum Thickness:
Thickness: 2400m
2400m

Figure 2.12 Inferred Extent of Reservoir Depths for Baua-Sikaw Resource (Based on CSMT Survey)
The fluid geothermometer from the Sikaw hot springs suggest that the temperature
of the source fluid may be more than 280oC. This is a high temperature value for a
resource fluid; immediately suggesting that the Baua-Sikaw resource may be a
separate geothermal system from the Cagua geothermal system. This hypothesis is
clearly supported by CSMT isoresistivity configurations where a high resistivity “wall”
separates the two major resource areas. As such, the gas geothermometers from
CG-1D well in the Cagua resource cannot be used as a basis for temperature
profiles for the Baua-Sikaw resource area.

A most likely temperature of 280oC and a maximum of 320oC was used in the Monte
Carlo simulations of the stored heat for the Baua-Sikaw geothermal resource.

For the Baua-Sikaw geothermal resource, the other parameters (rock properties,
recovery factor, conversion efficiency, plant life, and abandonment temperature)
used in the calculations in the stored heat simulations for Cagua were also used in
Baua-Sikaw stored heat calculations.

The Baua-Sikaw geothermal resource has a most-likely power potential of 63.1MWe

(56.5MWe at P50) based on the result of the Monte Carlo simulation.

The input parameters summary used as a basis for the Monte Carlo simulation for
the Baua-Sikaw resource area is shown in Table 2.5.

The results of the Monte Carlo simulation of the stored heat for the Baua-Sikaw
resource area is summarized in Table 2.6.
 VOLUMETRIC STORED HEAT RESERVE ESTIMATES
Cagua-Baua-Sikaw Geothermal Prospect-Baua-Sikaw Resource Area (01May2017)
Initial reservoir condition (Liquid Reservoir)-Areas based on 2015 CSMT Survey
INPUT VARIABLES (USER UNITS MOST MIN MAX MEAN SD PROBABILITY
DEFINED/DERIVED) LIKELY DISTRIBUTION
Liquid phase volume
AREA km 2 5.479 3.967 8.189 5.878297 triang
THICKNESS (liquid zone+500m) m 1500 700 2400 1533.333 triang
ROCK DENSITY kg/m 3 2700 2650 2750 2700 triang
POROSITY 0.06 0.02 0.06 lognorm
RECOVERY FACTOR 0.08 0.25 0.165 uniform
ROCK SPECIFIC HEAT kj/kg o C 0.9 0.8 1.0 0.9 triang
o
TEMPERATURE C 280 220 320 273.3333 triang
3
FLUID DENSITY kg/m 764.59 764.59 =f(temp)
CONVERSION EFFICIENCY 0.13 0.10 0.15 0.127542 =f(temp), tri
FLUID SPECIFIC HEAT kj/kg o C 5.18 5.18 =f(temp)
PLANT LIFE years 25 25 single value
LOAD FACTOR 0.92 0.8 1.0 0.91 triang
o
REJECTION TEMPERATURE C 180 180 single value

OUTPUT VARIABLE
POWER CAPACITY
Total MWe (liquid) 62.5

Area
Most likely 63.1
Minimum 7.1
Maximum 277.5

P90 28.4
P50 56.6
P10 107.1

Table 2.5 Summary of Input Parameters and Results of the Monte Carlo Simulations of the Stored Heat –
Baua-Sikaw Resource Area
 Sector Power Potential (MWe)
Minimum Most Likely Maximum
7.1 63.1 277.5
Baua-Sikaw
Resource Area P90 P50 P10
28.4 56.6 107.1

Table 2.6 Summary of Potential Power Output for Baua-Sikaw Resource

Area – Monte Carlo Simulation
 2.2.5 BAUA-SIKAW RESOURCE OUTFLOW AREA

Geothermal fluids from a deeper geothermal reservoir comes out to the surface in
the Sikaw area as hot springs and other thermal manifestations. Provisionally, for
purposes of this resource capacity simulation, the Sikaw area is treated as the
outflow region of the Sikaw geothermal resources.

The geothermal fluids reach boiling temperatures due to pressure as the fluids flow
to the surface. Usually, the geothermal fluids at shallow levels of the reservoir in the
outflow area are two-phase in character – fluid and steam; with the steam
component, higher than the fluid component. It becomes liquid-dominant once the
steam condenses due to mixing with cooler fluids from elsewhere. The fluid
temperature depends on the amount of pressure drop in the fluid and cooling due to
mixing of cooler fluids from shallow aquifers. Usually, the temperature of the
geothermal fluids at shallow levels of the reservoir, particularly, in the outflow area is
still substantially high enough (150 to 230oC), to be utilized for electricity generation
using a Rankine binary power cycle whose working fluid could be an organic fluid,
like iso-pentane, or an aqua-ammonia solution as the working fluid to run the
secondary fluid turbine (Kalina cycle).

The estimated area of the outflow region in the Baua-Sikaw geothermal resource is
about 2.75km2, thinning out in outflow breadth as the geothermal fluids flow further
out from the main reservoir source. In most Philippine geothermal fields, the
thickness of the outflow region varies from as much as 1000m or less to a minimum
thickness of 300 to 400m, assuming that the fluid temperature is greater than 120oC.

The thickness of the reservoir was estimated to be 800m as the maximum and 300m
as the minimum in the Monte Carlo simulations of the stored heat in the outflow area
of the Baua-Sikaw geothermal resource. The most-likely thickness was 600m. It was
assumed that the reservoir fluid was already in the liquid phase.

Figure 2.8, page 34 shows the Baua-Sikaw resource area CSMT low resistivity
boundaries and the outflow region. Figure 2.9, page 35 is a cross-sectional profile
across the Baua-Sikaw anomaly showing the estimated depths and thicknesses of
the reservoir.

The same rock properties (rock density and thermal conductivity) similar to that used
for the calculations for the Baua-Sikaw main reservoir were also used in the
calculation of the stored heat for the outflow region, except for the porosity which
was increased to 6 to 8% from 4 to 8%. Porosity characteristics could be higher in
the outflow area of the reservoir.

The abandonment temperature was lowered from 180oC to 120oC since a binary
cycle geothermal plant is suitable for the outflow region development for electricity
generation.

Other factors such as recovery factor, plant factor and plant life used in the
calculations were similar to the factors used in the calculations for the main Baua-
Sikaw resource.

The input parameters summary used as a basis for the Monte Carlo simulation for
the Baua-Sikaw resource area is shown in Table 2.7.

The outflow area of the Baua-Sikaw geothermal resource has a most-likely power
potential of 3.3MWe (2.9MWe at P50) which could provide sufficient heat for a 3.0
MWe binary cycle geothermal power plant.

The results of the Monte Carlo simulation of the stored heat for the Baua-Sikaw
resource area is summarized in Table 2.8.
 VOLUMETRIC STORED HEAT RESERVE ESTIMATES
Cagua-Baua-Sikawermal Prospect-Cagua Resource Area (01May2017)
Initial reservoir condition (Liquid Reservoir)-Areas based on 2015 CSMT Survey
INPUT VARIABLES (USER UNITS MOST MIN MAX MEAN SD PROBABILITY
DEFINED/DERIVED) LIKELY DISTRIBUTION
Liquid phase volume
AREA km 2 2.752 2.752 2.752 2.75219 triang
THICKNESS (liquid zone+500m) m 600 300 800 566.6667 triang
ROCK DENSITY kg/m 3 2700 2650 2750 2700 triang
POROSITY 0.08 0.02 0.08 lognorm
RECOVERY FACTOR 0.115 0.08 0.15 0.115 =f(por)
ROCK SPECIFIC HEAT kj/kg o C 0.9 0.8 1.0 0.9 triang
o
TEMPERATURE C 170 140 230 180 triang
FLUID DENSITY kg/m 3 886.55 886.55 =f(temp)
CONVERSION EFFICIENCY 0.08 0.06 0.11 0.082323 =f(temp), tri
FLUID SPECIFIC HEAT kj/kg o C 4.41 4.41 =f(temp)
PLANT LIFE years 25 25 single value
LOAD FACTOR 0.92 0.8 1.0 0.91 triang
o
REJECTION TEMPERATURE C 120 120 single value

OUTPUT VARIABLE
POWER CAPACITY Total M We (liquid) 3.2

Most likely 3.2

Minimum 0.5
Maximum 11.6

P90 1.5
P50 2.9
P10 5.2

Table 2.7 Summary of Input Parameters and Results of the Monte Carlo Simulations of the Stored Heat –
Baua-Sikaw Outflow Area
 Sector Power Potential (MWe)
Minimum Most Likely Maximum
Baua-Sikaw 0.5 3.2 11.6
Resource Outflow
P90 P50 P10
Area 1.5 2.9 5.2

Table 2.8 Summary of Potential Power Output for Baua-Sikaw Resource

Outflow Area – Monte Carlo Simulation
3.0 SYNTHESIS OF INTEGRATED GEOSCIENTIFIC STUDIES

Evidences of the existence of an active and significant geothermal system in the

Cagua-Baua Geothermal Project is supported, sustained and related to the following
geological, geochemical and geophysical physiognomies:
 Favorable geological and geothermal environment
 Preponderance of thermal indicators of an active geothermal system
 Structural framework, mechanics and permeability
 Water types and sources of hydrothermal fluids
 Surface and projected sub-surface reservoir temperatures
 CG-1D and CG-2D permeability and temperature implications
 Indicative and simulated resource capacities

3.1 Favorable geological and geothermal environment

Through the years of Philippine experience in geothermal exploration,

development and production, prospectors and major players in steam field
development have defined three (3) major geological environments
contributing to the development of geothermal resources. These are as
follows: a). along volcanic belts; b). along active major faults and other
structures, and; c). along massive plutonic occurrences. The most important
among these three environments is a). along volcanic belts, for high-
temperature, producing and potentially exploitable geothermal fields found
near Quaternary volcanoes (e.g. Mt. Cagua and Mt. Baua).

Volcanic belts refer to regions of active and inactive volcanism where

geothermal activities are dominantly confined along foothills or the base of
younger Quaternary volcanoes. Along these volcanic centers there are deep
tectonic fissures responsible for the trapping of magma reservoir and ascent
of high-temperature magma fluid (Malapitan & Reyes, 2000).
The northernmost volcanic belt in the Philippines is the Santa Ana Belt. The
Cagua-Baua volcanic complex is part of this belt. The belt originates in
the Batanes Group of Islands terminating at the northernmost tip of Central
Cordillera. It passes through the central portion of the Northern Luzon
Cordillera (Luzon Central Cordillera) from the central northern Luzon before
swinging westerly traversing western Luzon Island and then abruptly
terminated by the Tablas Lineament in the south to include Marinduque
Island (Luzon Central Belt).

3.2 Preponderance of thermal indicators

There are at least five (5) documented groups of thermal manifestations in the
Cagua area. These are the Maasok hot springs near the crater; Magrafil in
the northwest; Manaring, 5km north-northeast; San Jose, 10km north-
northeast; Kabinlangan, 3km northwest and Paminta, 2km north-northwest of
the crater.

At least two (2) more thermal indicators were recently mapped during the
course of the Tekton and PGEI surveys. These are the Mt. Baua solfatara
and thermally-altered grounds and Sikaw group of hot springs. Both areas are
situated 10 to 15km east of Mt. Cagua. The characteristics of these
manifestations appear to be more impressive than those in Mt. Cagua in
terms of water types, heat sources and preliminary temperature indicators.

At least one (1) unmapped area of thermal grounds located to the northeast
of Mt. Baua apparently exists. Due to its proximity to Mt. Baua rather than to
Mt. Cagua and its possible position with respect to the “anomaly divide”, this
area may most likely be associated with Mt. Baua.

3.2 Structural framework, mechanics and permeability

The eastern portion of North Luzon is characterized by different physiographic

features. The Sierra Madre, a Tertiary volcanic arc, represents the north-
south trending mountain range. Offshore to the north, the Northern Luzon
Straight constitute the south trending belt of active volcanoes (Santa Ana
Belt) and the northern extension of Manila Trench and North Luzon Trough.
The East Luzon Trough lies about 100km to the east.

The Cagua-Baua geothermal project lies northwest of the Sierra Madre

Mountain Range. It is bordered to the south by the strike-slip Dummon River
Fault and the structurally-controlled depression called Paret Embayment. To
the west, it is bounded by the east-west Sicalao-Casigayan anticlinal ridge
that separates the Cagayan Basin from the Aparri sub-basin.

The project is part of a structurally-active region. Evidences and presence of

thermal manifestations on the surface strongly suggests the status and level
of the available permeability that the regional and local structures in the
project area provide.

3.3 Water types and sources of hydrothermal fluids

The distribution of the thermal springs in the Mt. Cagua geothermal prospect
area follows the typical andesitic volcano model, where SO4-rich springs
(Maasok, Paminta) are found at high elevations near the hot central core of
the system; with HCO3 waters (Kabinlangan) found at the margins of the
field, and Cl waters at greater distances (~12 to 15km) at low elevations
seeping out in river beds (Manaring and San Jose).

The Maasok solfatara falls within the steam-heated waters formed by the
absorption of lower temperature H2S containing “geothermal vapors” into
groundwater. This thermal feature is usually found at high elevations close to
upflow or hotter portions of known geothermal resources.

Useful geo-indicators of their parent fluid can only be gathered from their gas
chemistry composition.
The Sikaw hot spring found in the Mt. Baua vicinity falls in the mature neutral
Cl portion of the Cl-HCO3-SO4 plot. It has a dilute acid SO4 composition
typical of waters where only acidic steam rich in H2S condenses in surface
water. The area where the springs discharge has extensive steaming altered
grounds denoting boiling conditions at depths.

3.4 Surface and projected sub-surface reservoir temperatures

The thermal springs and solfataras of both Mts. Cagua and Baua have
surface temperatures ranging from 40°C to 80°C.

The Manaring springs which lie near the full equilibrium line of the Na-K-Mg
ternary plot diagram gave an initial reservoir temperature estimate of 134oC.
However, discharge waters of Well CG-1D gave measured downhole
temperatures in excess of 300oC. The discrepancy between the surface
temperature (Manaring spring) and that of the actual well reservoir
temperature of CG-1D, can be attributed to the cooling off and subsequent re-
equilibration of the geothermal brine after migrating for a great distance
(~12km) from the postulated upflow region to the Manaring spring site.

The immature Kabinlangan warm spring gave a TKNa estimate of 293oC,

which is much closer to the bottom hole temperature of CG-1D of 340oC.

The neutral Cl Sikaw hot springs plot in the partial equilibrium portion of the
Na-K-Mg ternary plot diagram, giving a reservoir temperature estimate of
282oC. This is a very high resource temperature estimate, indicative of a
significant, deep geothermal brine with much higher temperatures (>282oC) at
depth.

The quartz geothermometers applied to the chloride samples also yielded

much lower temperatures of only close to 100oC. Such subsurface
temperature estimates are characteristic of highly-contaminated geothermal
waters with cold ground waters, where re-equilibration at lower temperatures
has already occurred.

For the Cagua-Baua Geothermal Project, which have active solfataric

activities, the best reservoir temperature estimates can be gathered from gas
or steam chemistry data. For well CG-1D gas temperature estimates using
TH2/Ar are already in excess of 300oC (Clemente, 1990).

3.5 CG-1D & CG-2D permeability & temperature implications

Well CG-1D may well be drilled towards the postulated upflow region of the
Cagua anomaly where bottom hole temperatures exceeding 300oC were
accurately recorded. However, evaluation and consideration of well-defined
structural targets for permeability objectives may also have been clearly
overlooked or plainly disregarded. Current well planning and designing
practices for geothermal drilling always take into consideration maximum
intersection of structural targets to the point of attaining or targeting infinity
permeability objectives. This can be attained by drilling (blindly) along fault
planes where maximum permeability has been proven to exist. This may
sometimes take priority than aiming for maximum temperature targets or
goals when drilling for a geothermal exploration well.

A review of the location of Well CG-2D showed that it was already far outside
the easterly boundaries of the Cagua low resistivity confines as interpreted
from CSMT survey data. As suggested earlier by the alteration minerals of
the well, it may well be drilled farther away from the limits of the outflowing
geothermal brine of the Cagua resource.

The very low permeability and well temperature of 180oC encountered in CG-
2D may well be expected due to the point or location where the well was
drilled with respect to the Cagua low resistivity anomaly. The postulated
northeasterly outflow zone is even further away to the east of the well’s
position. Again, the tight permeability characteristics displayed by the well
reflects misjudgment or lack of consideration of valid structural targets for
maximum permeability effects or results.

Results of the poor permeability indications of these wells do not necessarily

reflect the overall permeability status of the Mt. Cagua geothermal system. At
the interim, with the advent of advanced and developed well design
procedures and drilling targets optimization, a review of the Cagua wells
previous permeability targets need to be conducted to evaluate again the
causes behind the poor permeability characteristics of these wells in a drilling
technology point of view.

3.6 Indicative and simulated resource capacities

The Cagua-Baua Geothermal Project is an attractive geothermal energy

resource associated with active magmatic heat sources of a volcanic system.
Manifestations of this heat source are present at the caldera and flanks of Mt.
Cagua and along the Palawig River in Sikaw area, close to Mt. Baua volcano.

The resource boundaries for the Cagua and Baua-Sikaw areas are basically
drawn from CSMT isoresistivity contours following the outline of the base of
conductor (BOC) at about 1000mbsl.

The Cagua resource, which encloses the Mt. Cagua caldera collapse and
Maasok solfataras, has an estimated area of 6 km2.

The estimated 11km2 resource area of Baua-Sikaw comprises the delineated

shallow conductor north of Mt Baua and eastward extension to include the
Sikaw solfatara.

The “Power Density” method is the preferred method for resource capacity
estimations for geothermal exploration areas sans drilling information and
basis. The accepted power density value for Philippine geothermal setting is
12MW/km2. Simplified calculations will give the potential capacity of the
Cagua anomaly at about 72MWe while the Baua-Sikaw resources is about
130MWe, respectively.

A more detailed and in-depth resource capacity estimations was done for the
Cagua and Baua-Sikaw resource areas using Monte Carlo simulations for
stored heat capacity calculations. Monte Carlo simulations were attempted in
both areas in consideration of the availability of deep geothermal drilling data
in Cagua. Coupled with CSMT profiling and resistivity interpretations, the
Cagua resource area came out to have a higher reservoir resource than the
Baua-Sikaw resource area, contradictory to the “Power Density” estimates.

The reservoir volume in Cagua was higher than that of Baua-Sikaw due to the
temperature profile provided by CG-1D well, exacting a “thicker” resource as
proven by the well-defined and measured CG-1D temperature profile. In the
event that drilling information will be available for the Baua-Sikaw area,
estimations for the resource potential for Baua-Sikaw will significantly
increase. This is confidently expected as current indicative reservoir
temperature estimates using thermal manifestations alone for Baua-Sikaw
provided significantly high values up to 280oC.

Monte Carlo simulations provided four (4) possible resource areas for both
Cagua and Baua-Sikaw. These areas together with the estimated resource
capacities are as follows:
Main Cagua Resource Area 77.7MWe (70.7MWe at P50)
OR
Cagua Extended Maximum Boundary 109.9MWe (95.6MWe at P50)

AND
Main Baua-Sikaw Resource Area 63.1MWe (56.6MWe at P50)
Baua-Sikaw Outflow Region 3.2MWe (2.9MWe at P50)
Logically, resource capacity estimates using Monte Carlo simulations are
evidently readily acceptable as a more reliable system than that of the Power
Density method. This is in particular if deep drilling information is present
where subsurface reservoir temperature profiles can be measured accurately
if used as basis for reservoir thickness determinations.
4.0 POSTULATED GEOTHERMAL MODEL

The interpretation and development of the geothermal model for the Cagua-Baua
Geothermal Project was based significantly with the results of CSMT survey; coupled
to a very large and substantial extent with the geological and geochemical studies
done on the numerous and impressive thermal manifestations that abound in the
project.

The primary outcome of geophysical CSMT survey is the delineation of two (2)
significant and distinctive low resistivity anomalies (</= 10-m isoresistivity contour).
These are the Cagua Anomaly (CA) and the Baua-Sikaw Anomaly (BSA),
respectively. These anomalies clearly define separate and unique resource
configurations bounded by a flawless divide of areas with high resistivity values.
Current geoscientific indications show that the CA is noted to be associated with Mt.
Cagua while BSA may be related to Mt. Baua.

The principal geological elements on the geothermal model for CA/BSA are of
course the numerous and extraordinary thermal manifestations that can be easily
associated with the existence of a significant geothermal system in the area. Most
significant of these are the Maasok Solfataras in CA and the Sikaw thermal
manifestations in BSA, respectively.

The most prominent thermal feature of CA is the Maasok Solfataras bounded by the
Cagua caldera collapse. The existence of the Maasok Solfataras and mud pools is
indicative of an area of elevated temperatures. Due to this and other significant
geological considerations, two (2) exploratory geothermal wells, CG1D and CG2D
were drilled in the 1990’s by the then PNOC-EDC.

BSA is characterized by numerous vents, fumaroles, bubbling pools and warm to hot
springs significantly scattered within the area. The most prominent thermal
manifestations of BSA are the Sikaw solfataras, group of hot springs and altered
grounds.
Geochemical studies suggest that the CA thermal waters follow the typical
hydrogeochemical model of a geothermal system found in volcanic andesitic
terrains. Ascending magmatic vapors from a buried degassing magma beneath Mt.
Cagua rise to the surface in the Maasok solfatara and mud pools where it
encountered shallow groundwater at high elevation (856m) close to the crater of the
andesitic volcano (Tekton, 2015).

Geochemistry further suggests that the BSA hot springs and the extensive steam
altered grounds may be related to a separate high temperature (>280oC) geothermal
system as denoted by its very different and unique Cl/B ratio. The heat source
driving the system may be related to Mt. Baua or maybe to a local intrusive body
centered in the Sikaw area. (Tekton, 2015).

Based on the results of the current geoscientific surveys, the postulated geothermal
model of Cagua-Baua Geothermal Project is proposed, depicting two, separate and
distinctive major upflow zones, the Cagua Upflow Zone and the Baua-Sikaw
Upflow Zone, respectively.
.
The upflow zone of the Cagua resource lies within the Cagua caldera collapse. Well
CG-1D drilled within the boundary of the anomaly had measured bottomhole
temperatures exceeding 300°C. The major outflow is towards the southwestern
direction. The sharp gradients of the bottom of the conductive isoresistivity contour
towards the northwest and southwest directions delineate the margins of the Cagua
resource.

The upflow region of the Baua-Sikaw geothermal system is modelled beneath Mt

Baua. It is depicted to have estimated reservoir temperatures of more than 280°C
(Tekton Geometrix, 2015). The major outflow region is towards the east as
manifested by hot seepages of Sikaw hot springs along the Palawig River.

A geophysical divide of high resistive layers separates the two geothermal areas.
The absence of thermal manifestations within this area and the uniqueness of the
chemistry of waters of the the two anomalies further supports the hypothesis that the
Cagua and Baua-Sikaw hydrothermal areas are two (2) separate geothermal entities
or systems.

Figure 4.1 shows the postulated geothermal model of the Cagua-Baua Geothermal
Project.
Figure 4.13 Postulated Geothermal Model – Cagua-Baua Geothermal Project
5.0 RECOMMENDATIONS
The primary recommendation is to conduct a follow up geophysical survey over the CA and BSA thermal areas utilizing a
deep probing geophysical tool such as MagnetoTellurics (MT). This is to determine exactly the possible extent and geometry
of the geothermal reservoir. In addition, this is to investigate deeper beyond the depth-penetrating capacity of CSMT
equipment to determine the possible extent and thickness of the reservoir, and finally, to confirm and clearly define the
anomaly divide between the CA and BSA.

Secondary but similarly important additional studies are the following:

1. Aerial photo interpretation (1:15,000 scale) of the resource areas and adjacent localities prior to fieldwork.
LIDAR/LADAR delineation will also be done, if cost warranted.

2. Semi-detailed geological and structural mapping (post aerial photo interpretation and/or LIDAR/LADAR structural
delineation) within the Baua-Sikaw and Cagua resource boundaries.

3. Fluid and gas sampling in both resource areas and adjacent localities for more accurate geothermometry studies

4. Isotopic investigations to study the origin and recharge of the Baua-Sikaw and Cagua geothermal systems and to
determine the age of the geothermal fluids from both systems.

5. Results of these studies, together with the geophysical (MT) evaluation will be the basis in the conduct of a
preliminary (pre-drilling) resource assessment of the Cagua-Baua Geothermal Project.