© 2018 Revelant LLC. All rights reserved. Patent Pending

PROBLEM: Diamondback's problem is severe paraffin deposits treated daily/monthly with expensive chemicals and occasional hot water treatments and still requiring stripping when the well is pulled. Each workover requires 1-7 days just to deal with the paraffin before focusing on the cause of the workover. After running out of options, Diamondback elected to try the Enercat Tools on several of their worst wells in the Bloxom Field in Upton County south of Midland and conducted a controlled test for a 3-month period. Initially this was a multi-pay stacked vertical play later turning into the company's first horizontal unconventional field targeting the Wolfcamp B and Lower Sprayberry Shale. These wells are all in exponential decline and required batch treatments with cloud points at 0-3000 feet.. SOLUTION: The solution to Diamondback's paraffin problem was to test the Enercat™ Tool in 7 of their wells with severe paraffin problems, 2 of which were horizontals and remaining 5 were vertical. Four parameters were followed:

1. Test wells pulled to install 1 Enercat™ Tubing Tool in each well above the intake and below the seating nipple. 2. No paraffin chemical treatment while the tools are in the ground, only corrosion chemical pumped in test wells. 3. Pre-test and post-test fluid samples were collected from the wellhead analyzed for trend changes. 4. Backpressure valve were regularly checked for paraffin accumulation.

RESULTS: The primary result of the test was that the 7 test wells all showed little or no paraffin deposits. Additionally, no paraffin mitigation was required and paraffin did not negatively affect the performance of the 7 wells. Rods were pulled in each well after the 3-month test period to determine physical evidence of results. This was supported by detailed notes in reports and photos. While pulling rods on the test wells, the rig was able to get on 2 wells in a day, which is a dramatic change from the pre-Enercat™ time of 1-7 days just to deal with the paraffin and get the rods and the tubing out of the hole. When Diamondback looked at the trajectory of paraffin build up even with conventional chemical method, where you have paraffin caked on after 3 months (Figure 2, left photograph) and the Enercat method where it is free and clear (Figure 2, right photograph), they realized that these two trajectories were going in completely different directions. As a result, they decided to continue to utilize Enercat technology in wells where they have severe paraffin problems to mitigate paraffin formations, prolong time between failures and ultimately reduce operating expenses. Looking at the method where it is free and clear--those two trajectories are going in completely different directions

CUSTOMER: DIAMONDBACK ENERGY

PROBLEM: PARAFFIN

LIFT TYPE: 7 ROD PUMPS WELLS, VERTICAL AND HORIZONTAL

LOCATION: BLOXOM FIELD, MIDLAND BASIN, UPTON COUNTY, TEXAS

PRE-ENERCAT PRODUCTION: 5-20 BOPD

“Looking at the trajectory of paraffin build up with conventional chemical

method where you have paraffin caked on after 3 months and the Enercat method where it is free

and clear--those two trajectories are going in

completely different directions.”

© 2018 Revelant LLC. All rights reserved. Patent Pending

Figure 1 The best Enercat™ story of the test was the effect of the Enercat™ Tool on the Crystal #1 well (see before, and after Enercat™ photographs in Figure 2 below). The well was down, no pumping for a week prior to the work over before Enercat™ Tool installation. After pumping hot water down the well, Diamondback had to strip the well. They had to replace many of the fiberglass and metal rods and 20+ joints of the tubing. It was a disaster and a true test of the Enercat™ Tool. The photographs on the left were taken during the workover to install the Enercat™ Tubing Tool. Photographs on the right show the spectacular results after the 3-month post-Enercat test period.

Before Enercat™ Installation After Enercat™ Installation Figure 2

© 2018 Revelant LLC. All rights reserved. Patent Pending

ECONOMICS: Figure 1 shows a graph of 5-year projected cost trends treating paraffin with and without an Enercat™ Tool. The blue curve shows the cost of the Enercat™ tool. It is purchased, installed and there are no other costs. In addition, its life is >10 years. The yellow curve is based on what Diamondback pays for conventional paraffin mitigation. This includes, all due to paraffin buildup: batch treatment with some form of wax crystal modifier, cost of workover, flat time, rig workover costs, hot watering, dealing with paraffin before Diamondback can even get to the cause of the well failure, and equipment failure (e.g., hack sawing fiberglass rods, rod replacement, etc.) and replacement. Averaging this over the total wells in a field and then annualizing it produces the yellow curve.

Figure 1

“Based on cost savings alone, the Enercat™ Tools pay out in about 1.5 years. At about 3 years we are 2 times the expenses ahead and at year 5 we have saved a factor of 3 times what we would have spent on expenses. This is looking at the Enercat™ Tool only from an operating cost perspective. In reality, increased production due to the Enercat™ can be significant, commonly 20% and even up to 100%. In addition, production is usually stabilized.”

Diamondback's testimony

REFERENCES:Berkebile, M. and Krummel, A. PhD., Case Study on Mitigating Paraffin Buildup in Upton County, Texas -- Harnessing Innovative Technology to Prevent Paraffin Buildup from Causing and Contributing to Well Failures: Permian Basin Congress 2018, New Artificial Lift Designs & Production Optimization Technologies,American Business Conference, January 23-25, 2018, Houston, Texas.