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New Oil and Gas Drilling and Production Technologies

Radius Energy, LLC

May, 2013

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Growth in Horizontal Drilling in Recent Years

Jan-0

3

May-03

Aug-03

Nov-03

Feb-04

Jun-0

4

Sep-04

Dec-04

Mar-05

Jul-0

5

Oct-05

Jan-0

6

Apr-06

Jul-0

6

Nov-06

Feb-07

May-07

Aug-07

Nov-07

Mar-08

Jun-0

8

Sep-08

Dec-08

Apr-09

Jul-0

9

Oct-09

Jan-1

0

Apr-10

Aug-10

Nov-10

Feb-11

May-11

Sep-11

0%

10%

20%

30%

40%

50%

60%

70%

80%

Horizontal / Directional Drilling

Vertical Drilling

Source: Baker Hughes North American Land Rig Count

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Horizontal Wells

Horizontal wells are often better suited for developing layered , tabular deposits (resource plays) such as coalbed methane and shale

Now well established, this process provides a lower cost resource development process .

   …………… But………….

Horizontal wells still often present unique drilling and production related problems.

New technology may be available to further reduce the cost of drilling and producing horizontal wells.

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PROBLEM 1 - Vertical wells have sump (“rat hole”) to place pump

• Liquid separates in vertical section; falls to sump

• Sump is below producing formations; No fluid head pressure to hinder production

Liquid falls into Sump (“Rat-Hole”)

Gravity Separation:Gas rises to surface

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BUT - Horizontal wells have no rat hole – Pump must be placed directly in production stream

• Any gas production causes interference with pump’s ability to pump liquid

• Inefficient pumping causes liquid level to build; High bottom-hole pressure hinders production

Gas Interference

Pump is unable to “pump” gas – Fluid level raises

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SOLUTION: Selective create a seal below

the pump to temporally form an isolated pumping chamber :

1) Form seal2) Pump liquid3) Release Seal

Normal Operation:Sealing Device OPENPump OFF

Pumping Cycle:Sealing Device: CLOSEDPump ON

Sealing Device: OPEN

Sealing Device: CLOSED

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PROBLEM 2 – Electric pump cable can become damaged when being installed in deviated well

Electric Submersible Pump (ESP)

Electric Cable exposed to damage

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SOLUTION: Use “Wet Connect” to install

pump cable inside of discharge tubing after pump is in place.

Pump-down plug pulls cable into tubing – even into horizontal sections

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PROBLEM 3 – Solids may settle along bottom of horizontal well – Blocking flow or inlet to pump

Solids settle along bottom of well, blocking flow and inlet to the pump

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SOLUTION: Slowly rotate tubing with

eccentric tail joint to keep solids agitated and in suspension. Suspended solids removed from well along with other production liquids.

Helically shaped tail-joint “wipes” the circumference of well bore to agitate solids

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SUMMARY -

A number of new technologies can be applied to aid in the deliquification of horizontal wells. Gas interference can be eliminated by cycling the pumping and gas producing periods. A number of tools and methods can be used to isolate the pump from the flow of gas. By setting the frequency of the pumping cycle to a relatively short interval of time, there is little effect to the performance of the well.

For more information, please contact:

Joseph A. Zupanick, PERadius Energy Services, LLC

(304) 688-6556Joe.Zupanick@RadiusEnergy.com