1. Economic Conductivity ForResin Coated Proppants Daryl Johnson

2. Outline Hierarchy of proppant conductivity Why resin coat proppants? Proppant Flowback Control Economic Conductivity The CARBOBOND Family of Resin Coated Proppants The CARBO Advantage Questions 3. Proppant HierarchyHighestEUR,Production,IRR HighestConductivity Highstrength(minimizescrush) Uniformsizeandshape (maximizesfrac porosityandpermeability)Tier1 HighConductivity Thermalresistant(durable,minimizesdegradation) Ceramic Engineered,ManufacturedProduct Mediumstrength Tier2 MediumConductivity IrregularsizeandshapeResinCoatedSand Lowstrength Tier3 LowConductivity IrregularsizeandshapeSand NaturallyOccurringProduct 4. Why resin coat a perfectly good proppant? Resin coating extends the applicable stress range of the uncoated substrate Encapsulates overstressed proppant grains, preventing fines migration Spreads the effective stress out over a larger contact area Curable coatings lock the proppant in place & maintain conductivity Prevent proppant flowback Prevent prop pack rearrangement Reduce prop pack embedment Strengthens the proppant pack Resin coating protects the proppant grain Coating protects the substrate from chemical attack by Mud Acid (HCl:HF) and downhole production treating chemicals Coating is less abrasive and protects downhole and surface production equipment 5. Improving White Sand Substrate Performance 140 Realistic Conductivity vs. Closure Stress 120(Resin-Coated Sand vs. Uncoated White Sand)RealisticConductivity(md*ft) 100 ResinCoatedSand80 WhiteSand604020 0 0 20004000 6000800010000 12000 ClosureStress(psi)GeneratedusingPredictK v11.0 Frac:xf 500ft,height 150ft PropConc. 1lb/sq.ft Rate 2000mscf/d,Cond.Yield 10bbl/mmscf BHP 1500psi,T 250degrrees F 6. RCS Economic Conductivity 1800 120 Cumulative & Incremental Production at One YearIncrementalCumulativeProduction 1600(Granite Wash Study)CumulativeProduction(mmcf)100 1400 WhiteSand40/70 1200CARBOBONDRCSC40/70 80IncrementalRCSCum.Gain (mmcf) 100060 800RCSproducesanincremental5% 600 moregas(~84mmcf). 40 40020 200 00050100150 200250 300350 Time(days) GeneratedusingPredictK v11.0 7. RCS Economic Conductivity0.55Incremental NPV of CARBOBOND RCS over White Sand at One YearIncrementalNPV(MillionsofDollars)0.45 (Granite Wash Study)0.35 IncrementalNPV0.250.15Payout in less than one RCS creates ~$480,000 ofmonth present value at one year0.050501001502002503003500.050.15Time(days) GeneratedusingPredictK v11.0 Prices:$65/bbl,$5/mcf Prop:2,862,000lbs@currentprices 8. Resin Coated Lightweight Ceramic Advantage 200 180 Conductivityvs.ClosureStress (UncoatedISPvs.CoatedLW) 160Conductivity(mdft) 140 120 100 RCLWCeramic 80 UncoatedISPCeramic 60 40 20 0 0200040006000 800010000 1200014000ClosureStress(psi) GeneratedusingPredictK v11.0 Frac:xf 500ft,height 150ft PropConc. 1lb/sq.ft Rate 2000mscf/d,Cond.Yield 10bbl/mmscf BHP 1500psi,T 250degrrees F 9. RC Lightweight vs ISP Economic Conductivity 1400140Cumulative&IncrementalProductionatOneYear IncrementalCumulativeProduction 1200120CumulativeProduction(mmcf) 1000100CARBOBONDLITEUncoatedISPCeramic80080(mmcf)IncrementalRCCum.Prod.Gain60060400 CARBOBOND LITE produces an40incremental 7% more gas (~87 mmcf)20020000 50100 150200250300350GeneratedusingPredictK v11.0Time(Days) Frac:xf 500ft,height 150ftPropConc. 1lb/sq.ft,150,000lbspropRate 2000mscf/d,Cond.Yield 10bbl/mmscfBHP 1500psi,T 250degrrees FClosureStress:10000psi 10. RCLightweightCeramicEconomicConductivity0.5IncrementalNetPresentValueofCARBOBOND LITE overUncoatedISPIncrementalNPV(millionsofdollars)0.4 CARBOBOND LITE creates~$425,0000.3ofpresentvalueatoneyear IncrementalNPVoverISP0.20.1 Payoutinlessthanonemonth0 050 100 150 200 250 3003500.1 Time(Days)GeneratedusingPredictK v11.0Prices:Oil $55/bbl,Gas $5/mcfCurrentproppant prices 11. The CARBOBOND Family of Resin Coated Proppants 12. CARBO Resin Coated Proppants2005 -2008JUNE 2010 JULY 2010 PRESENT CARBO China CARBOs first USA First CARBOBONDBuilding threemanufactures resin-resin-coatingLITE stimulation additional resincoated proppants for operations begin in treatments coating lines Eurasian marketsNew Iberia, LA 1 B lbs/yr by YE 12 13. CARBOBOND Resin Coated Ceramic Products CARBOBOND LITE 20/40 and 30/50 mesh available Expanded usable range through 14,000 psi 17% volumetric advantage over RC ISP Compatible with complex fracturing fluidsCapability to resin coat all products inthe CARBO ceramic line 14. CARBOBOND Resin Coated Sand Products CARBOBOND RCS-C Curable resin-coated premium white frac sand CARBOBOND RCS-P Precured resin-coated premium white frac sand Expands the usable closure stress range over premium white sand Moves up the Economic Conductivity pyramid Compatible with complex fracturing fluids Currently manufacturing 40/70 mesh products 15. CARBOBOND Performance Outstandinginverticalorhorizontalwells Made from highest quality substrates Will not bond in the wellbore Curable coating prevents proppant flowback Wells able to produce at higher sustained rates Delivery to well site insures quality to the field bin Compatible with complicated fracturing fluids 16. Economic Conductivity PyramidHighestEUR,Production,IRR HighestConductivity Highstrength(minimizescrush) Uniformsizeandshape (maximizesfrac porosityandpermeability)Tier1 HighConductivity Thermalresistant(durable,minimizesdegradation) Ceramic Engineered,ManufacturedProduct Mediumstrength Tier2 MediumConductivity IrregularsizeandshapeResinCoatedSand Lowstrength Tier3 LowConductivity IrregularsizeandshapeSand NaturallyOccurringProduct 17. The CARBO AdvantageThe first resin-coated proppants that come with: CARBOs industry leading technology and quality CARBOs outstanding technical support CARBOs state-of-the-art manufacturing CARBOs unmatched distribution network CARBOs superior customer service 18. Thank YouForYour Time and Attention! Questions?