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Efficient completions

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Application of Radial Drilling Technology has rapidly developed during past years, an overview

Radial Drilling Technology has been applied since the late 1990s.
RadTool was established in 2007 to:
Allow the use of the Technology with standard coiled tubing units Expand the use of the Technology to high angle and flowing wells Reduce the time and installation associated costs

Over the past 4 years, radial drilling services by several service companies were performed for both major and independent E&P companies. mainly in the FSU, US, Canada and South America (Tantneft, LukOil, TNK-BP, KazMunaiGas, Repsol, ENAP) in more than 350 wells with significant productivity improvement results RadTool has multiple patents pending covering numerous aspects of the operation

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RadJet Drilling Technology R a d J e t vs. Established Completion/Stimulation Methods

Cost efficient application to complete vertical wells

Achieve comparable production rates as multilateral wells and horizontal wells Reduced formation damage risk - alternative for traditional perforating Extended horizontal penetration (300 ft) - reach beyond near wellbore damaged zone Connecting vertical permeability channels (Kv), alternative for acid wash and matrix acidizing Controllable length and direction of penetration (perpendicular deviation from the vertical wellbore). Alternative to traditional injection and disposal applications

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The Radial Drilling Process consists of 3 steps, directed to perforate 50mm diameter lateral holes at selected depths and azimuth*

Step #1: Milling a hole in the casing with rotating drill bit (driven by downhole motor)

Step #2: Blasting a lateral hole into the formation with high fluid pressure inside a nozzlehead, leading to a high exit velocity jet
T 1 F 2 F 1
F1: Penetrating force F2: Accelerating force T1: Tension on flex hose Penetration/acceleration and angle hold is a function of the force difference where: F2 > F1 T1 is constant

Perpendicular deviation

The jet nozzle is held back by the coil tubing and surface control thereby maintaining constant tension on the flex hose in the lateral. This tension, with the exit point at the casing allows only straight line departure from the deflector shoe as long as the tension is maintained.

Step #3: Washing out the hole (50mm diameter) by pulling back the nozzlehead

* Per RDS/Radtech Marketing Information

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Mechanism of penetration

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Va+Vb = straight pull (Ps) Reverse jets provide pull

Ps T

Retension provides tension (T)

Straight line penetration perpendicular to the exit

Mechanism of penetration:

Superficial erosion
Failure resulting from pore-elastic tension Cavitation

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Mechanism of penetration: calculation of the force in the pulling direction (jetting)

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Deflect-O-Mill

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Deflect-O-Mill

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Pump-N-Lock

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Pump-N-Lock

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Pump-N-Lock

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Key benefits of Radial Drilling: extended penetration compared to traditional perforation

Get Beyond Formation Damage

Perfs 24 to 48Penetration Vs

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Key benefits of the Radial Drilling Technology Applications

Improved line drive in waterflooding or enhanced oil recovery through laterals. Injection profiles. Horizontal sweep efficiency over the traditional patterns is achieved

Lower drawdown during production:

a horizontal well = larger contact area; therefore, same production rate can be achieved at a lower pressure drawdown Useful in combatting sand production and gas or water coning

Effective in:
high-productivity conventional reservoirs low-permeability, layered reservoirs heavy oil deposits low viscosity / No mud pits required (no environmental side effects)

Time and cost efficient application (drilling 4 laterals takes 2 to 3 days)

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More Advantages from Radial Drilling

Less wells means Less Surface Equipment Less Pumps Less Lifting Costs Less Environmental Impact

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Key benefits of the Radial Drilling Application

Enhanced efficiency in field development due to larger drainage area of radial completed vertical wells

500 Acres field 20 Acre Spacing What is the most efficient way to secondary recovery?

25 Quads @ $100k $2.5MM 25 wells @ $500k $12.5MM

Scenario #1 Go to 10 Acre Spacing

Scenario # 2 Quad Radials

SAVING >$11 MM

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Post drilling recommendations

Post Radial Drlling well response depends on several factors, including 1) well selection, 2) remaining recoverable reserves 3) reservoir parameters (porosity, permeability, etc)

Post drilling activities:

Swabbing Swabbing is a means of cleaning of the used drilling fluids and is recommended to avoid damaging reactions with the formation. This activity will often cause the reservoir fluids to start flowing after an inactive period during the radial drilling operations Acidizing Depending on the formation, an acid wash can be applied after drilling each lateral by using the Radial Drilling system (with a modified nozzlehead) to convey the chemicals into the laterals Hydrochloric acid (HCL) in carbonate reservoirs Hydrochloric acid (HCL) in carbonate-cemented sandstone A mixture of Hydrofluoric acid (HF) and HCL in lowcarbonate sandstones

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Typical Radial Drilling Surface Rig-up

Coil tubing from unit guided to gooseneck

Work-over rig and riser

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Worldwide Radial Drilling * productivity enhancement results

More than 350 wells are radial drilled Worldwide by Companies such as Radial Drilling Services, RadTech International and Well Enhancement. * The table below depicts some incremental production results:
Formation Carbonates Carbonates Carbonates Carbonates Sands Sands Sands Sands Sands Carb/sands Carbonates Carbonates Carbonates Sands Geographic Area Western Urals, Russia Kansas USA Kansas USA Punta Arenas Chile Punta Arenas Chite Punta Arenas Chile Punta Arenas Chile Bolivia Atyrau, Kazakhstan Patagonia, Argentina Tatarstan, Russia Russia Russia, Tatarstan Punta Arenas Chile # wells 10 1 1 1 1 1 1 1 20 18 50 3 1 1 Before Radial Driling Oil Gas Water bopd mcfd bwpd 327 1.2 0 5.7 0 20 8.2 34 410 216 1277 124 14 0 0 1.7 10 0 96 0 0 0 0 0 0 0 0 0 64 n/a n/a 0 0 0 0 0 0 0 0 0 0 144 Oil bopd 715 8 3 39 0 38 51 84 1161 390 3321 297 182 0 After Radial Drilling Gas Water Oil/Gas mcfd bwpd % incr. 0 12 108 0 860 0 0 0 0 0 0 0 0 0 67 n/a n/a 0 0 0 0 0 0 0 0 0 0 611 119% 567% 980% 584% 796% 90% 522% 147% 183% 81% 160% 140% 1200% 324% Remarks Rehabilition project Testing potential Testing potential Drainage improvement Drainage improvement Drainage improvement Acid injection thru radials Deep well test (3251m) Rehabilition project Optimization project Long term contract Rehab. test in Russia Radials with acid work Injectivity testing (water)

* Published & Circulated Results from Radial

Drilling Services/RadTech International Marketing Information