October 27, 2011

Dr. Richard Passamaneck- Inventor

•BS & MS Engineering UCLA•PhD Aerospace Engineering USC•11 Years NASA Jet Propulsion Lab•Propulsion research utilizing solid rocket propellants•1982 Colorado School of Mines•Joint research with Dr. James Crafton Professor of Petroleum Engineering•Propellant research & ignition patent

History

PFS’ Approach

Optimize Energy and Work on Formation

• Known Burn Geometry/Ignition System• Known Propellant Characteristics;• Higher Energy/Longer Burn Durations;

• Verified Results

Propellant

Geometry Known Burn Geometry via Ignition

External IgnitionDeflagration - Known Geometry

Internal Ignition Detonation - Unknown Geometry

PFS’ Propellants: Overview

Propellant

Propellant Selection Criteria• Produces gas at a specific burn rate to cause fractures without

transitioning to a harmful detonation;• High energy content available to do work on formation released over

sufficient time to extend fractures;• Sufficient total gas volume production to produce and extend fractures

significantly into the formation; • Stable propellant with minimal “knee” to assure no transition to detonation

and safe deployment;• Environmentally safe with no combustion products which may be harmful

to the formation;• Ignition not pressure limited. Normal well bore temperatures do not effect

propellant performance

Team

Team•Worlds largest producer of tactical rocket motors and propellants:

-Sidewinder, Tomahawk, Patriot & Stinger Missiles Systems

•Built Bomb Calorimeter and Strand-Burners for testing

•Exclusive Agreement with Aerojet

a 3-D Column 1OctaneStimGun PropellantPFS Arcite PropellantPFS Arcadene PropellantTovite (TNT Substitute)

Volumetric Energy Comparison

Propellant

PropellantPer Shot Energy Comparison

3-D Column 1OctaneCommon Oil & Gas Industry PropellantsPFS Arcadene Propellant

Propellant Characteristics -

How It Burns

Bur

n R

ate

- in/

sec

0

1

2

3

4

Pressure - psi0 3500 7000 10500 14000

Burn Rate vs. Pressure for Arcite 386M Propellant

Ballistic Burn Model r = 0.04004 p^0.42

Measured Data and Muraour's Law Model

r = -0.610 + 3.050E-04 p

Typical Burn Curve

Propellant

ARCite 386M

Ballistic Burn Rate ModelR = 0.04004 p ^ 0.42

Propellant

0 2 4 6 8

10 12 14 16 18

0 2000 4000 6000 8000 10000 12000 14000 16000 Pr essure - psi

Ballistic Burn Rat e Model

R = 0.003 p 0.9

Measured Data and Muraour’s Law Model

R = -0.610 + 3.050E-4 p

StimGun

Arcite Ballistic Burn Rate Model R = 0.04004 p 0.42

Burn Rate Comparison

Burn Rate in/sec

Knee?

Knee

StressFracR=0.041p0.7

Knee?

Technical Overview

HOW DO WE ACHIEVE BETTER PROPELLANT TREATMENTS?

OVERVIEW OF WORK CONCEPTS

• “Best” Pressure Pulse

• Comparative Work Graph

Technical Overview

Technical Overview

Technical Overview

Technical Overview

Alamien HSW-2

Frac Gradient 0.7 psi/ft Frac Pressure ~4480psi460 msec

Gauge DataDownhole Pressure Gauge Data – North Sea Well

Frac Pressure ~ 7,000 psi

300 msecs

Technical Overview

OPTIMIZING TREATMENTS: GENERATION II

• Higher Burn Rates

• Increased Gas Generation or Output

• Quicker Pressure Rise Times to Initiate Fractures

• Higher Peak Pressures/Long Duration to “Optimize” Work

• Maintain Predictability and Repeatability (No Explosion)

Technical Overview

Burn Rate versus Pressure

Bur

n R

ate

0

3

6

9

12

Pressure1000 3000 5000 7000 9000 11000 13000

Arcite 386M Arcite 497Arcadene 454AArcadene 439

Technical Overview

Theoretical Relative Gas Volume Generation (Compared to Arcite 386M Baseline)

Perc

enta

ge C

ompa

rison

0.00%

100.00%

200.00%

300.00%

400.00%

Pressure1000 3000 5000 7000 9000 11000 13000

Arcite 386M Arcite 497Arcadene 454AArcadene 439

Technical ReviewPVI

Technical Overview

“Soft” Ignition Test with Electric Match One End Only

Technical OverviewDetonating Cord Ignition Test – Full Length Propellant

ControlFracTM

Propellant Cartridge (Mixed to Optimize)

•Multiple Applications

•Customized Burn Curves

•TCP, WL, CT, Slickline

•Horizontal/Vertical

•Varying Propellant MixGas Ports

PERFORATING GUN ENHANCEMENT

Technical Oveview

PERFORATING GUN ENHANCEMENT• Challenges: Propellant Damaging Guns• Propellant Design Concepts• Effects of Slope Break (Knee)• Choosing the Right Propellant • Correct Ignition

• Patented Solution - Control

Technical Overview

CHALLENGES: VIEWING THE VIDEO ON THE NEXT SLIDE, YOU WILL NOTE THAT WHEN PROPELLANT IS BURNED INSIDE A CLOSED VESSEL, IF THE WRONG PROPELLANT IS USED, OR IF IT IS INCORRECTLY CONFIGURED, A DETONATION WILL OCCUR, DESTROYING THE VESSEL.

Technical OverviewVideo Detailing Detonating Perf Gun Mock Up (Double

Click to Start Video)

Technical Overview

GOAL:

HOW DO WE PUT PROPELLANT IN A CLOSED VESSEL WITHOUT RUPTURE?

Technical Review

SOLUTION: CONTROL PRESSURE BY KNOWING PROPELLANT CHARACTERISTICS AND APPLYING KNOWN PROPELLANT DESIGN CONCEPTS

At = (As x r x ρ x Cstar)/(p x g)

The total aperture area (At) to achieve a desired pressure (p), can be related by taking into account propellant characteristic variables, namely:

(1) the burning surface area of the propellant (As); (2) the burn rate characteristics of the propellant, more specifically, the burn rate as a

function of pressure (r); (3) the density of the propellant (ρ); (4) the characteristic velocity of the propellant (Cstar); and (5) the gravitational constant (g)

Technical Review

HOW DO WE APPLY THIS TO PERFORATING GUNS?

Technical Review

• IN A PERFORATING GUN, THE FLOW AREA, At, IS FIXED. IT IS THE TOTAL AREA CREATED BY THE PERFORATING CHARGES;

• AS THIS FLOW AREA IS REDUCED FOR A CONSTANT PROPELLANT TYPE AND GEOMETRY, THE PRESSURE INSIDE THE GUN INCREASES;

• BECAUSE THE BURN RATE SLOPE CHANGES AT THE “KNEE”, RUNAWAY DEFLAGRATION OCCURS IF PRESSURES ABOVE THE KNEE DEVELOP WITHIN THE VESSEL, DAMAGING THE VESSEL;

• THIS RUNAWAY DETONATION OCCURS AS THE GUN PRESSURES APPROACH THE PROPELLANT SLOPE BREAK OR “KNEE” (SEE FOLLOWING SLIDE).

Technical ReviewGauge Data from Aperture Control Vessel Test

Arcite 386M

At Slope Break Pressure, Transitions to Detonation

Bur

n R

ate

- in/

sec

0

1

2

3

4

Pressure - psi0 3500 7000 10500 14000

Burn Rate vs. Pressure for Arcite 386M Propellant

Ballistic Burn Model r = 0.04004 p^0.42

Measured Data and Muraour's Law Model

r = -0.610 + 3.050E-04 p

Propellant

Slope Break Pressure

Technical Review

• A PROPELLANT WITH A SLOPE BREAK WELL IN EXCESS OF THE MAXIMUM SAFE PRESSURE WITHIN THE GUN ALLOWS THE TOTAL BURN EVENT TO TAKE PLACE ALONG THE CONSTANT BURN SLOPE PORTION OF THE BURN RATE CURVE;

• A PROPELLANT SUCH AS ARCADENE 439 HAS A HIGH PRESSURE SLOPE BREAK, MAKING IT AN IDEAL CANDIDATE TO BE USED IN A CLOSED VESSEL SUCH AS A PERFORATING GUN WHERE HIGHER MAXIMUM PRESSURES ARE REQUIRED (NOTE THE BURN RATE CURVES ON THE FOLLOWING SLIDE)

Technical Review

Burn Rate versus Pressure

Bur

n R

ate

0

3

6

9

12

Pressure1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 1200013000 14000

Arcite 386M Arcite 497Arcadene 454AArcadene 439

Technical Review

In Summary, THE SOLUTION:

The propellant characteristics and geometry can be used to safely achieve desired pressures within a vessel or perforating gun without exceeding the vessel’s maximum allowable stresses, without reducing the total energy by limiting propellant mass inside the gun; and

Knowing the total flow area, or size and number of shots per foot in a perforating gun, and deploying the correct propellant, safe and predictable peak pressures can be achieved within a perforating gun that do not result in gun damage.

Technical Overview

SOLUTION: VIEWING THE VIDEOS ON THE NEXT TWO SLIDES, YOU WILL NOTE THAT WHEN THE PROPER PROPELLANT IS USED INSIDE A CLOSED VESSEL OR PERFORATING GUN, A CONTROLLED DEFLAGRATION PRODUCING A DESIRED PRESSURE PULSE IS ACHIEVED.

Technical ReviewVideo I Detailing Safe Burn in Perf Gun Mock Up

(Approximately 30 second duration)

Technical ReviewVideo II Detailing Safe Burn in Perf Gun Mock Up

Technical ReviewVideo III Perforating with Propellant Mock Up

Pressure Modeling1234567

8910111213141516171819202122232425262728293031323334353637383940

A B C D E F G H I J K L M

UNITS PRESSURE PSI 5000 6000 7000 8000 9000 10000 12000 14000 16000 18000 20000Natural Log of Pressure --- 8.5172 8.6995 8.8537 8.9872 9.1050 9.2103 9.3927 9.5468 9.6803 9.7981 9.903

DO NOT CALCULATE PRESSURES BEYOND: 25000 PSIG

BURN INSIDE TO OUTSIDE INCLUDE END AREA NID IN 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25LENGTH (Enter 0 if no inside burn) IN 26.82 28.72 30.42 31.95 33.37 34.7 37.1 39.25 41.2 42.98 44.65INSIDE SURFACE AREA IN^2 21.064 21.064379 21.064379 21.064379 21.064379 21.064379 21.064379 21.064379 21.064379 21.064379 21.064379

BURN OUTSIDE to Inside INCLUDE END AREA NOD IN 2 2 2 2 2 2 2 2 2 2 2LENGTH (Enter 0 if no outside burn) IN 26.82 28.72 30.42 31.95 33.37 34.7 37.1 39.25 41.2 42.98 44.65OUTSIDE SURFACE AREA IN^2 168.515 180.453 191.134 200.748 209.670 218.027 233.106 246.615 258.867 270.051 280.544

TOTAL AREA for INSIDE and OUTSIDE IN^2 189.579 201.517 212.199 221.812 230.734 239.091 254.171 267.679 279.932 291.116 301.609Total Length IN 26.82 28.72 30.42 31.95 33.37 34.7 37.1 39.25 41.2 42.98 44.65Total Propellant Volume IN^3 82.941 88.817 94.074 98.806 103.197 107.310 114.732 121.381 127.411 132.916 138.080ρ - Density LB/FT^3 0.0602 0.060 0.060 0.060 0.060 0.060 0.060 0.060 0.060 0.060 0.060Cstr (constant) FT/SEC 4634 4634 4634 4634 4634 4634 4634 4634 4634 4634 4634gc (gravitational constant) - FT LB/LBF SEC^2 32.174 32.174 32.174 32.174 32.174 32.174 32.174 32.174 32.174 32.174 32.174

Burn Rate IN/SEC 5.7656 6.5088 7.2114 7.8811 8.5232 9.1418 10.3201 11.4342 12.4960 13.5141 14.4949Exponent --- 0.6672 0.7475 0.8155 0.8743 0.9262 0.9727 1.0530 1.1210 1.1798 1.2317 1.2782

N/A 7500 PSIG PROP TYPE ( 1, 2 or 3) 3 ARCADENE 439

At - Calculated Throat Area IN^2 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316 0.0316Discharge Coefficient: --- 0.643 0.643 0.643 0.643 0.643 0.643 0.643 0.643 0.643 0.643 0.643Actual Throat Area IN^2 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491 0.0491Burn Time SEC 0.1734 0.1536 0.1387 0.1269 0.1173 0.1094 0.0969 0.0875 0.0800 0.0740 0.0690dP/dAt --- 3429482 3326170.8 3240607.7 3169204.1 3106094 3049526.2 2954679 2876025.3 2809468.6 2752562.9 2701406.7

ORIFICE DIAMETER for 60 ORIFICES IN 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500 0.2500NUMBER OF ORIFICES 60

This document is property of Propellant Fracturing &

Stimulation, LLC and is not to be reproduced in whole or in part. It is not to be divulged to any third

party or used on any other project and shall be returned upon

request.

CALCULATION of PRESSURE vs. PROPELLANT LENGTH for PRESSURE VESSEL TESTS for- ARCADENE 439

AREA OF PROPELLANT BURNING

PROPELLANT BURN RATE

ORIFICE DIAMETER for BOTH INSIDE and OUTSIDE SURFACE BURNING for 60 ORIFICES

Enhancement Tool

Perforating Gun

Propellant in Lower Portion of Gun

Summary

(1) PFS Patents: - External Burn with Simulator: 5,295,545- Long Burning Propellant: 7,073,589- Linear Ignition: 7,409,911B2- Restrictor Plug: 7,487,827- Closed Vessel Propellant Burn (Patent Pending)- Additional Provisional Patent Applications Filed

• Exclusive with Propellant Supplier (Aerojet);• Simulator Developed in Conjunction with Schlumberger;• Testing & Fabrication Facility with PV Test Capability;• ATF/State Dept. Registration and Approved Facilities Storage;• DOT 1.4C for Ease of Shipment