Artificial Lift Optimization & Well Cleanout Technology

CJS The Company & its Business Model

• CJS – Private Western Canadian company; head office in Calgary; Lloydminster service center

• Offers alternative artificial lift for challenged wells

• Aim to optimize production and minimize costs

• Intellectual property owner, manufacturer and an oilfield service company

• Products include FlatPak umbilical, ArmorPak umbilical, ArmorVak, HydraPak PCP, HydraPak HSP & ArmorPak ESP

• Production optimization for conventional and unconventional well configurations

• Dealing direct with the end user with a fully vertically integrated solution and accountability

Deviated / Horizontal Well Optimization

Landing the pump at “full true vertical depth” can optimize productivity and recovery

Driving pumps with rod-less systems will reduce the number and cost of interventions and well downtime

Specific Applications Include:

• Shallow to deep well depths

• Low to medium pressure wells

• Slant, deviated and horizontal wells

• Natural gas, light oil, heavy oil wells

• Low to medium fluid rate wells

• Permanent production systems and well cleanout intervention

CJS Target Wells Challenged Well Population

Hydraulic & Electric Artificial Lift Systems Optimize Pump Placement In Deviated and Horizontal Wells

Coiled Tubing (“CT”) Based Artificial Lift Deployment Technology

This CT based deployment technology consists of the following main components: • Pump System artificial lift prime

mover (Hydraulic/Electric) • Coiled tubing unit • Hydraulic or electric umbilical • Downhole pump (Reciprocating

pumps/PCP/ESP/Jet Pumps)

• Hydraulic & electric submersible motors

• Auxiliary lines for other services

(DH pressure gauge, chemical injection)

CT Artificial Lift Deployment Technology - ArmorPakTM Umbilical Is ...

• Umbilical coiled tubing (UCT) containing tubes to convey, actuate and receive production from downhole hydraulic & electric pumps

• A system that can include components to inject chemicals and receive downhole pressure and temperature data

• Is used to facilitate “rig-less” deployment of low maintenance artificial lift from conventional, unconventional, vertical, deviated and horizontal wells

• “Live well” deployment with ArmorPak to be available soon

• Used to install permanent production systems (ESP, HSP, HSPCP, JP) and to perform wellbore cleanouts (UCT Jet Pump Cleanouts)

• Conveyed using conventional coiled tubing units

• Patented and patent pending technology

CT Artificial Lift Deployment Technology – ArmorPak is…

• All metal banded umbilical for all well depths and thermal well applications

• Manufacturing performed in Canada by CJS

CT Artificial Lift Deployment Technology - ArmorPak is Conveyed With ...

• Conventional coiled tubing units

• Modified arch and injector components

• Specialized snubbing & blowout prevention systems

• CT unit modifications to permit fluid pumping operation

• Modified wellhead apparatus including tubing hanger

CT Artificial Lift Deployment Technology – ArmorPak BOP System

CT Artificial Lift Deployment - Typical Completion Stack

CT Artificial Lift Deployment Technology – Umbilical Configurations – FlatPak/ArmorPak Options

FlatPak Dual Jet Pump String

FlatPak Triple Hydraulic String with

smart technology

ArmorPak Triple Hydraulic with smart

technology

ArmorPak Dual ArmorVak String

ArmorPak Triple Hydraulic String

ArmorPak Electric ESP String

CT Artificial Lift Deployment Technology FlatPak / ArmorPak Field Service Operations

Texas

China Alberta, Canada

Arkansas

CT Artificial Lift Deployment Technology – Hydraulic Reciprocating Pump - HydraPak HSP System

Operation Summary Operation principle similar in nature to a conventional API Sucker Rod pump System benefits: • Rig-less, live well, rod less technology • Installation via conventional CTU • Operates in vertical, deviated and horizontal inclinations • Accessories include DH pressure gauges and chemical injection • Eliminates rod and tubing wear reducing well downtime • Pumps natural gas effectively, and operates in a “pumped-off” state – no gas locking. • Screens are used to control sand and formation fines • Scalable 0.5m3 – 15 m3 dependant on depth • OD 3.6” p • 2-10 year run life experienced in applications in Canada • 100 units installed (Devon -14 units, Encana – 9 units, Enerplus 9 units, Ember – 25 units, Apache, Husky etc.)

CT Artificial Lift Deployment Technology – Hydraulic Progressive Cavity Pump - HydraPak PCP System

Operation Summary

Operation principle utilises a PCP driven by

downhole hydraulic Motor

System benefits:

• Rig-less, live well, rod less technology

• Installation via conventional CTU

• Operates in vertical, deviated and horizontal

inclinations

• Eliminates rod and tubing wear reducing well

downtime

• Solids handling benefits of PCP technology’s

• Pump can be reversed to allow for flush out of

tubing and pump

• Integrated electrical conductor for DH

Pressure monitoring to prevent pump off

• Chemical injection capable at pump intake to

treat torque increases due to solids, scale, wax

etc.

• 8 units installed deployed in heavy oil and

CBM environment (Husky, Devon etc.)

G1 PCP 1022ft/lbs Cont. Torque @ 151 RPM / 20 GPM

CT Artificial Lift Deployment Technology – ArmorPak ESP- Rig-less ESP System

Operation Summary

Operation principle utilises conventional ESP technology

deployed via umbilical system

System benefits:

• Rig-less, live well, rod less technology

• Installation via conventional CTU

• Operates in vertical, horizontal and deviated inclinations

• Eliminates requirement for workover rigs and spool unit

• Reduced equipment mobilisation and associated cost

• Eliminates gas migration through the power cable

• Eliminates tubing connections reducing corrosion points

• First rig-less ESP installed for ConocoPhillips in Alaska

CT Artificial Lift “Jet Pump” Deployment Technology / Well Cleanout Technology – “ArmorVak”

Operation Summary Operation principle utilises conventional jet pump technology deployed via the umbilical system System benefits: • Rig-less, rod less, live well technology • Permanent / Semi Permanent pumping operation • Rig-less installation / well servicing via conventional CTU • Operates in vertical, deviated and horizontal inclinations • Facilitates cost effective underbalanced cleanouts • Eliminates cost and requirement for nitrogen and surfactant • Reduced equipment mobilisation and associated cost • Suited for production, frac return and well liner cleanouts • Pioneered in Alberta in CBM & CHOP’s environments • Suited for solids production challenges • Copes with gas production through system • High flow velocities in coil • Process proven with Top Tier oil and gas operators

Venturi Principal

CJS Heavy Oil Jet Pump Performance

Application History

• Canada & United States - Over 100 pump installations to date - Installations including vertical, deviated, horizontal oil and natural gas wells - Pump run lives up to many years - Successfully applied historical ArmorVak cleanouts - Reach in horizontal leg to over 3,000 meters - First rig-less “ArmorPak ESP” successfully installed for Conoco Phillips in Alaska

• China – Successful HydraPak PCP pump landing in a coal bed methane well • Applications for top tier Conoco, Devon, Shell, Nexen, Husky, Encana, Cenovus etc.

CT Artificial Lift Deployment Technology Customer Value

5

Reduced Costs “Rig-Less” CT Installation – Time efficiencies; Increased productivity; Considerable cost savings; Reduced footprint;

Increased safety “Rod-Less” – No mechanical wear, reduce well downtime, reduce intervals between service visits.

Increased Production “Optimum Pump Placement” – Better production dynamics, increased ultimate reserve recovery

“Live Well” – Eliminate wellbore damage, increase post workover production volumes

Improved Service Options Eliminate Gas locking with HSP reciprocating pumps / Facilitate backspin for PCP to flush / Increase solids carrying

capability with small diameter tubing / Protect the cable and eliminate power cable gas migration with ESP

Quality Control CJS solutions are vertically integrated offering the customer maximum operational control and accountability

Return on Investment When considering all revenue and cost optimization, assuming certain well conditions exist, a CJS system can save the

operator over $100,000 per year for a typical shallow Canadian operation

Cost Reduction Typical Canadian Comparison

CJS CT Deployed System

Installation Cost $15,000

Yr.1 Service Intervention Cost $ NIL

Yr.1 Rig Intervention Downtime Cost $ NIL

Yr.1 Replacement Tubulars Cost $ NIL

Yr.1 Suboptimal Production loss $ NIL

________

Total Cost to Producer $ 15,000

Traditional Rig Deployment

Installation Cost $ 15,000

3 x Service Interventions – Yr 1 $ 45,000

Lost Production Downtime Cost(note 1) $ 13,000

Yr.1 Replacement Tubulars Cost $ 10,000

Yr.1 Suboptimal Production loss(note 2) $ 44,000

________

Total Cost to Producer $ 127,000

Note 1. Assumes 3 weeks lost production time, 30bbl/day at $20 net per barrel

Note 2. Assumes 20% production loss on 30bbl/day well at $20 net per barrel

Artificial Lift Optimization & Well Cleanout TechnologyCJS �The Company & its Business ModelDeviated / Horizontal Well OptimizationCJS Target Wells�Challenged Well Population Coiled Tubing (“CT”) Based�Artificial Lift Deployment TechnologyCT Artificial Lift Deployment Technology - ArmorPakTM Umbilical Is ...CT Artificial Lift Deployment Technology – ArmorPak is…CT Artificial Lift Deployment Technology - ArmorPak is Conveyed With ...Slide Number 9CT Artificial Lift Deployment - Typical Completion StackCT Artificial Lift Deployment Technology – Umbilical Configurations – FlatPak/ArmorPak OptionsSlide Number 12CT Artificial Lift Deployment Technology – Hydraulic Reciprocating Pump - HydraPak HSP SystemCT Artificial Lift Deployment Technology –�Hydraulic Progressive Cavity Pump - HydraPak PCP SystemCT Artificial Lift Deployment Technology – ArmorPak ESP- Rig-less ESP SystemCT Artificial Lift “Jet Pump” Deployment Technology / Well Cleanout Technology – “ArmorVak”Venturi PrincipalCJS Heavy Oil Jet Pump PerformanceApplication HistoryCT Artificial Lift Deployment Technology�Customer ValueCost Reduction �Typical Canadian Comparison