HYDRO SLOTTING PERFORATION (HSP) INTEGRATED WITH … … · Oil Well Consulting, LLC (OWC)...

Oil Well Consulting, LLC (OWC) Proprietary and Confidential Information

Rev. 0.CSept. 2016

AN INTRODUCTION TO OIL AND GAS WELLS RECOVERY

AND INCREASED PRODUCTION TECHNOLOGY BY USING

HYDRO SLOTTING PERFORATION (HSP)

INTEGRATED WITH

ENHANCED OIL RECOVERY INTENSIFICATION

(OWC EOR)

A revolutionary technology of increasing oil and gas profits even at today market prices

by using proprietary well recovery methods applied to depleted and/or abandoned wells

All rights reserved

Web: www.oilwellslotting.com

Yuri Frankel, Co-founder, VP, Director of Business Development:

[email protected] Phone: (646) 831-5341

Dr. Leon Marmorshteyn, Senior Science and Technology Advisor:

[email protected]

CONTACT INFORMATION

http://www.oilwellslotting.com/

mailto:[email protected]

mailto:[email protected]


Rev. 0.CSept. 2016

HSP Slot Drainage Area

Calculation

2

• The United States has an estimated 771,000 stripper or marginal wells (wells with less than 10 barrels a day output) still in production - about 410,000oil and 361,000 natural gas wells. Combined, these wells make up almost 20% of the total of all oil and natural gas produced domestically: 11.3% foroil and 8.3% for natural gas.

• Over the past decade a cumulative total of more than 131,000 oil wells and 48,000 natural gas wells have been plugged and abandoned with a totalmarket value of lost annual production estimated at $6.1 billion for the year production ceased. Currently over 1.2 million wells are alreadyabandoned or approaching abandonment.

• Many of the abandoned wells have never undergone waterfloods or tertiary extraction techniques and are being abandoned with a significantamount of oil resources still in place: from 60% to 75%.

• Currently there is an increasing demand for a sustainable source of oil well profitability as result of oil prices crashing

• In the US hundreds of small and medium operators constitute a multibillion oil market. Information on oil production in the US by state can be foundin the US Energy Information Administration: http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm

• As a rule, marginal wells could already have exploration and drilling equipment, storage tanks, access roads and other production facilities, commonlyreferred as infrastructure, and require mainly maintenance investments and minimum capital investment.

• Profitability of marginal wells recompletion, even with low maintenance expenses to keep up their infrastructure while using old technologicalmethods, could easily become marginable too and/or not feasible.

• Even abandoned wells can be unplugged and restored to productive levels at minimal costs using the HSP technology.

Sources: Interstate Oil & Gas Compact Commission, U.S. Energy Information Administration, Stripper Well Consortium, National Energy Technology Laboratory

Market Overview

Important Facts to Consider About HSP and Its Implementation

Advanced Technology

OWC Engineering Highlights

OWC is an expert in oil and gas wells recovery, especially in the HSP technology, with a drive to succeed. OWC has an exclusive relationship and support from a special HSP Technical Advisor: one of original HSP inventors from Russia

and who is now permanently resides in the US. OWC works closely with subcontractors who already successfully used the HSP technology in the US and Canada.

There are tangential stress conditions that occur in any well after drilling due to rock pressure created by a weight of theoverlying rocks: they create annular zone with compressive stresses near wellbore, thus collapsing rock’s permeability andrestricting access to the prospected hydrocarbons.

The HSP is the only method on a market that relieves these stresses by using a high pressured water and sand mix in 4 abrasivejet streams (at 90° to each other) to create 4 deep wide opened channel slots through the wellbore: to allow a greatly increasedflow of production layers hydrocarbons right through the annular stress zone around the wellbore; no other competingEnhanced Oil Recovery (EOR) method could do it.

The HSP creates vertical slots which will redistribute tangential stress and restore rock’s permeability while providing a goodhydrodynamic connection between well and productive layers.

The HSP can be used to recomplete vertical wells previously opened with guns and cumulative perforation technologies and itworks best on the wells with depths in excess of 1000 ft.

Integrating the HSP with other Enhanced Oil Recovery (EOR) intensification technologies will provide a complete solution inextracting a majority of hydrocarbon deposits still locked in the well. OWC patented integration approach presented in theOWC the EOR operational Diagram.

The HSP technology is a cost saving alternative to horizontal drilling and fracking technology introduced by Mitchell Energy &Development (now Devon Energy) Co and used by Chief Oil & Gas Co.

The HSP technology should be used in new well completion process instead of cumulative perforation and will guaranteesustainable well’s production life with a very low rate of output depletion.

Suggested Actions

Blending an existing well infrastructure with OWC innovative eco-friendly HSP technology will be able to boost well’sproductivity and access remaining oil and gas deposits. There are no doubts that markets will be attracted to OWC engineeringsolutions, particularly at this time when operators and service companies are looking to balance their books to accommodatelower oil prices.

OWC HSP Related US

Patents

Current Patent: No 5,337,825 “Method of oil well productivity increase” by L. Marmorshteyn, et. al. Pending Patent: No 15,208,238, “Method for increasing productivity of oil and gas recovery from previously used wells.” by

L. Marmorshteyn, et. al.

HSP Technology

Achievements

The HSP technology was originally developed and effectively used in oil and gas fields of Russia and it also had proved itself around the world: in China, USA, Canada, Middle East, and South America.

Results from over 200 HSP recompleted wells showed production rate increases up to 10 times and frequently much more.

The HSP opens a large drainage zone, creates a perfect hydrodynamic well connection with oil reservoir,and set up an excellent geometry for subsequent hydraulic fracturing in production and injection wellswhile restoring a normal pressure in producing well’s drainage surface area (DA) for all 4 HSP slot jets:

DA = 4 x (2 x (a x b) + 2 x (a x c) + (b x c)) Assuming that each slot depth (a) is 5ft. (max), length (b) – 10 ft. and width (c) – 1 in. (0.08 ft.), then total

drainage area will be: DA = 4 x (2 x (5 x 10) + 2 x (5 x 0.08) + (10 x 0.08)) = 406 ft2 (w/out area along shaft). No other competing EOR technology is capable to produce such a large surface drainage area!

http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm


Rev. 0.CSept. 2016

• Leon Marmorshteyn, Doctor of Science, Member ofthe US Science Academy is one of the original HSPtechnology inventors in Russia, leads our researchand development of new hydroslotting methods foroil and gas recovery industry and serves as OWCTechnical Advisor for wells recovery projects.

• He is a world renowned geologist and expert in wellproductivity enhancement. He is an author or co-author of more than 60 patents on productivityenhancement of oil, gas and liquid mineral resources,with coverage in Europe and USA. He also wrote145+ articles on the usage of various technologies inthe oil, gas, and liquid mineral well production.

• Our engineering and deployment team is comprisedof geologists and engineers with many years ofexperience in oil well recovery and enhancement andengineering.

Business Profile Technical Advantage

• OWC is focused on providing its customers with asuite of patented hardware, field operations andconsulting services focused on oil and gas well yieldenhancement.

• OWC core technology is HSP, which is an eco-friendly, cost effective and proven solution formaking conventional wells more productive andextending economic life.

• Yield improvements vary based on geologicalconditions, but increases from 3x to 10x are typicaland in some cases much more, with most dramaticproduction increases from zero productivity wells.

• Our technology and methods rely on an existingconventional infrastructure and are maintained andserviced by a team of industry operation experts.

3

Surface Equipment And Stages of HSP Process

• Ecologically safe and environmentally friendly long distance directed fracture up to 1500 feet.

• Intersects new “compartments” of additional reserves.• Fracture width is minimum 6x larger due to Hydroslotting

radial depth. • Increases Porosity: 4-5x and more; Permeability: 15x and

more.• Drainage volume increases 6.2x greater than conventional.• Creates deeper penetration comparing to perforation

methods.• Eliminates screenouts, lamination, skin effects (all barriers)• Reaches full thickness through interbedding / layer.• Powerful enough to cut multiple casings deeper into rock in a

wide vertical and radial depths: wider than other technologies.• It is the only technology that actually excavates rock before

fracturing.• Accurate and controllable connection / communication

between wellbore and formation. • Direct method for oil, gas, and water (effect is immediate).• Helps giving direction to hydraulic fracture (even near water).• Does not crack casing cement and keeps hydraulic integrity.• Has a long lasting effect of 5 to 10 years after well treatment.

HSP Technology Characteristics And PossibilitiesUNDERGROUNDPERFORATOR

RadialDepth

VerticalDepth

Cumulative Perforation vs. HSP: Side and Top Views Well Depth Effect on Pressure Inside Well and Rock Permeability

Well's

Depth (ft)

Pressure (psi)

1000 1450-2900

2000 2900-5800

3000 5800-8700

4000 8700-11600

5000 11600-14500

6000 14500-17400

7000 17400-20300

8000 20300-23200

9000 23200-26100

Rock P

erm

eabili

ty

Well Depth

Well

Pre

ssure

Hyd

rosl

ott

ing

Per

fora

tio

n

Side View Top View

Cu

mu

lati

ve P

erfo

rati

on

Shaft’s cementcasing is brokenthrough alongwith annular stress zone

Annular stresszone is obliterated

Releasedoil flow

Shaf

t

Shaf

t

Only 1 of 4 slotsis shown

HSP radial depth

Shaft annular stress zonegreatly reduceslayer’s oil flow

Cumulativeperforation

barely reducesannular stress

zone around shaft


Rev. 0.CSept. 2016 4

2 Types of the HSP Perforators HSP vs. Commonly Used Perforations

Item Price Qty Units Total Price

Well Preparation Services (w/ Personnel, Equipment, Consumables, Work)Wireline Service Subcontracting $ 4,000.00 1 per well $ 4,000.00

Workover Service Subcontracting $ 25,000.00 1 per well $ 25,000.00

Fracking Service Subcontracting $ 25,000.00 1 per well $ 25,000.00

Total Well Preparation Services: $ 54,000.00

Basic OWC HSP Services (w/ Local Support)

HSP Subcontractor Fees (Jet Slots Cutting) $ 40,000.00 1 per well $ 40,000.00

HSP Subcontractor Local Support Brigade $ 1,200.00 5 days $ 6,000.00

Total for Basic HSP: $ 46,000.00

OWC Personnel and Services (w/ Analysis, Organization, Travel, Insurance)

Well's Geological Analysis $ 3,000.00 1 per well $ 3,000.00

All Inclusive Travel, Local Accommodations for a Week and Insurance Expenses $ 7,000.00 1 per well $ 7,000.00

Organizational and Coordinating Work Compensation $ 10,000.00 1 per well $ 10,000.00

Total OWC expenses: $ 20,000.00

Gross: $ 120,000.00

Basic HSP Well Service Treatment Cost Estimates (End of 2015)

Prices may quite vary in different regions and also due to oil market service competition



OWC EOR Operations Diagram

Production Increase Greatly Depends on Well’s Type and Rock Formations

OWC Structural Diagram

1 Close micro cracks produced by the cumulative

perforation by using cement closing solution

(bentonite drilling mud): to prevent water inflow

into the well.

2 Create 4 deep slots through the wellbore over an

entire thickness of producing layers will restore

producing layer permeability and open channels for

oil inflow into well. This is mandatory for any

following EOR operations.

3 Induce the micro cracks in a large volume of the

producing layers by plasma pulse electrical

discharge or acoustic blast: to open oil passage from

closed pores.

4 Fracture a large volume of the producing layers

by applying pressurized jet stream (water and sand

mix) into the previously created slots: to open

closed pores containing oil still unattainable by the

other EOR methods. Additional ecologically neutral

solution, like baking powder, may be added.

5 Restore and maintain pressure in the producinglayers by allocating injection wells next toproduction wells: cutting slots in the injection wellsby the HSP operation and applying Hydraulicfracking and pressure controlled water flooding.

Business Development

Yuri Frankel

HSP EquipmentEngineering

Service

Well Assessments, Operation Planning

OWC Management

Science and Technology Dr. Leon Marmorshteyn

HSP

Process Design

Rigs and Pump Preparation

HSP

Assembly Test

Geological Consulting

Other On-site Equipment

WellsHistorical Database

WellsTreatment

Service

Slotting Operation

Wireline Service

ProductionBase Units and Consumables

Suppliers in Canada, US

and RussiaHSP Process Control Other On-site

Equipment

Surface

Equipment Assembly

Field Service TeamMaxxwell Production

CEO: A. Nikulin

Barrels/day

ServiceOptions

Pro

du

ctio

n In

crea

se

Tertiary Recovery

Well’s Cement Sheath Restoration

Pressure Management

Injection Well HSP Treatment

HSP 4 Slots Cutting

Micro Cracking Hydraulic Fracking

Water Treatment Flow Intensification

Unloading Stress in Near Wellbore Zone

Hydro Fracking, Ecologically Neutral Solutions

Plasma Pulse, Acoustic Blasts

Secondary Recovery

Production WellTreatment Service

1

2

3

4 5

HSP 4 Slots Cutting


Rev. 0.CSept. 2016

Average Well's Purchase Price US Dollars $50,000

Average HSP Treatment Expenses (from an above Table) US Dollars $120,000

Total Initial Investment per Well US Dollars $170,000

Total Initial Investment per 100 Wells US Dollars $17,000,000

Investor's Shares in Purchased Well's Revenues %/year 70.0%

Return of Investments (ROI) after Purchase and HSP Months 8.7

Investments Returns per Year After Sharing w/OWC @$40/barrel Well's investments

returnProduction Years Total per

1 well /5yTotal per

100 wells /5y1 2 3 4 5

$55,400 $176,600 $167,290 $158,446 $150,043 $707,779 $70,777,873 316%

Note 3: All calculations are based on yearly revenues taken from Table above: "Before and after HSP"

Note 4: Lease Fee is taken out from this Table calculations; instead of it Investor’s Shares are added

Note 5: First production year revenue is reduced by well purchase price

Average Treatment Expenses per Each Well US Dollars $120,000 (for up to 10 first test wells; further wells HSP cost will be lower)

Projected Minimum Price per Barrel US Dollars $40

Average Oil Output Before HSP Treatment Bbl/day 2 Green colored fields can be altered in original spreadsheet

Projected Average Oil Output After HSP Treatment Bbl/day 20

Yearly Projected Average Output Decline %/year 5%

Projected Yearly Exploitation Days Days/year 350 Total

Well's Yearly Maintenance and Operational Expenses US Dollars/yr $12,000 # of Wells

Well’s Lease Fee (Due to Owner from Gross Revenues) %/year 12.5% 100

Return of Investments (ROI) after HSP Treatment Months 5.8

Production Years Total per 1 well /5y

Total per 100 wells /5y

Total HSP Revenue Gain

1 2 3 4 5

Barrels per Years Before HSP Treatment 700 665 632 600 570 3,167 316,700

Projected Revenues Before HSP Treatment @$40/barrel $24,500 $23,275 $22,111 $21,006 $19,955 $110,847 $11,084,734

Barrels per Years After HSP Treatment 7000 6650 6318 6002 5702 31,672 3,167,200

Projected Revenues After HSP Treatment @$40/barrel $113,000 $220,750 $209,113 $198,057 $187,554 $928,473 $92,847,341 738%

Note 1: First production year revenue is reduced by HSP treatment costs

Note 2: Capitalization and extraction costs are not included because they are the same for both scenarios

6

OWC Operational Chain

Conservatively Predicted Gross 5 Years Revenues of a Leased Well Before and After Basic HSP Treatment

Original calculation tables to play various “what if” scenarios may be provided upon request

Predicted Investor’s 5 Years Revenues After Wells Purchase and Basic HSP Treatment

General

Contractor

Agreement

HSP Engineering

HSP Assembly and Test

Workover Service Contractor

Basic ProductionEquipment and Consumables

WellsHistorical Database

Wireline Service

Geo analytical Report Well Assessments

Scope of work and schedule

Search for potential wells:

-Evaluation of reservoir potential and expected HSP results

-Establishing contractual agreements, etc.

-Selection of candidate wells

WellsTreatment

ServiceField Operation

Management

Tables Graphical Illustration

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

1 2 3 4 5 6

Original Depleted Well 5 Years Projected Revenues Purchased Shared Well 5 Years Revenues After HSPLeased Well 5 Years Revenues After HSP

Revenues

YearsTotal



HSP Results On Earlier US And Russian Wells (Continued)

Average Treatment Expenses per each well $120,400 From previous sheet

Number of USA wells 4

Total Treatment Expenses for USA wells $481,600

Number of Russia Volga wells 13

Total Treatment Expenses for Russia Volga wells $1,565,200

Number of Russia Volga wells 19

Total Treatment Expenses for Russia Siberia wells $2,287,600

Number of operational days 350 From previous sheet

USA wells barrels per year 275,450

Russia Volga barrels per year 723,450

Russia Siberia barrels per year 901,250

Reservoirs Comparison

Ongoing

Barrel

Price

Yearly

Revenue

USA

Yearly Profit

USA

ROI

Days

USA

Yearly

Revenue

Volga

Yearly Profit

Volga

ROI Days

Volga

Yearly

Revenue

Siberia

Yearly Profit

Siberia

ROI Days

Siberia

$ 20 5,509,000$ 5,027,400$ 31 14,469,000$ 12,903,800$ 38 18,025,000$ 15,737,400$ 44

$ 25 6,886,250$ 6,404,650$ 24 18,086,250$ 16,521,050$ 30 22,531,250$ 20,243,650$ 36

$ 30 8,263,500$ 7,781,900$ 20 21,703,500$ 20,138,300$ 25 27,037,500$ 24,749,900$ 30

$ 35 9,640,750$ 9,159,150$ 17 25,320,750$ 23,755,550$ 22 31,543,750$ 29,256,150$ 25

$ 40 11,018,000$ 10,536,400$ 15 28,938,000$ 27,372,800$ 19 36,050,000$ 33,762,400$ 22

$ 45 12,395,250$ 11,913,650$ 14 32,555,250$ 30,990,050$ 17 40,556,250$ 38,268,650$ 20

$ 50 13,772,500$ 13,290,900$ 12 36,172,500$ 34,607,300$ 15 45,062,500$ 42,774,900$ 18

$ 55 15,149,750$ 14,668,150$ 11 39,789,750$ 38,224,550$ 14 49,568,750$ 47,281,150$ 16

$ 60 16,527,000$ 16,045,400$ 10 43,407,000$ 41,841,800$ 13 54,075,000$ 51,787,400$ 15

Total USA Wells Total Russia Volga Wells Total Russia Siberia Wells

HSP Results on Recent Canadian Wells: Saskatchewan (Admiralty Oils, Ltd)

HSP Results on Recent US Wells: Nebraska (Branch Production, LLC)



HSP Results On Earlier US And Russian Wells

Note: not all wells are shown in this table

50 350

$40 53

93 $120,400 23

Country RegionWell Area

or NameRock Type

Average

Well Depth

(ft.)

Porosity

(%)

Permeabilit

y (Darcy)

Output

Before HS

(Brl/day)

Output After

HS (Brl/day)

Outout

Increase

(Brl/day)

Outout

Gain

(%)

Estimated

HSP cost

per well

Daily Output

@ $40/Brl

per well

Yearly Profit

@ $40/Brl

per well

ROI

(days)

USA Michigan C1-20 sand clay 1285 15 N/A 0.3 30 29.7 10000% $62,850 $1,200 $357,150 53

USA Michigan C1-21 sand clay 4529 15 N/A 10 80 70 800% $95,290 $3,200 $1,024,710 30

USA California Church sandstone 6608 17 N/A 266 477 211 179% $116,080 $19,080 $6,561,920 7

USA Texas Clifton sandstone 10609 18 N/A 25 200 175 800% $156,090 $8,000 $2,643,910 20

Aver. Cost: $107,578

Russia D. Volga 12 sandstone 16066 11 0.002 70 212 142 303% $210,660 $8,480 $2,757,340 25



Russia D. Volga 3911 sandstone 5695 22 0.33 13 65 52 500% $106,950 $2,600 $803,050 42



Russia D. Volga 3921 clay stone 3573 20 0.44 9 200 191 2222% $85,730 $8,000 $2,714,270 11

Russia D. Volga 3922 clay stone 5802 22 0.3 10 55 45 550% $108,020 $2,200 $661,980 50

Russia D. Volga 3923 clay stone 7797 23 0.29 8 80 72 1000% $127,970 $3,200 $992,030 40






Russia W. Siberia 1452 sandstone 4600 23 0.31 11 95 84 864% $96,000 $3,800 $1,234,000 26



Russia W. Siberia 1550 sandstone 6508 19 0.29 10 75 65 750% $115,080 $3,000 $934,920 39


Russia W. Siberia 1705 clay stone 4350 26 0.35 30 130 100 433% $93,500 $5,200 $1,726,500 18










Russia W. Siberia 2894 clay stone 7797 23 0.31 8 80 72 1000% $127,970 $3,200 $992,030 40





Russia Orenburgskaya 3 sandstone 7660 13 0.1 55 89 34 162% $126,600 $3,560 $1,119,400 36




Russia Centralnaya 411 sandstone 4783 19 0.43 15 118 103 787% $97,830 $4,720 $1,554,170 21


Russia Centralnaya 425 sandstone 7805 22 0.33 10 70 60 700% $128,050 $2,800 $851,950 46



Russia Kudinovskoe 110 sandstone 3155 15 0.01 50 225 175 450% $81,550 $9,000 $3,068,450 10




Average well's working days per year:Average HSP Depth /Well (ft):Data provided by Dr. L. Marmorshteyn

Price per barrel: Max Return of Investments−ROI (days):

Number of wells: Average ROI (days):Average Estimated HS Cost / well:



Suggested Field Trial of an Integrated OWC EOR Applied to the Depleted Conventional Wells

Suggested OWC EOR

Steps

OWC EORExpected Oil Output Gains

Field Trial Background

The OWC advanced technological approach is invented to extract the most of the 70 percent of oil deposits still remaining theground after primary and secondary recovery and unattainable by the other conventional EOR methods

Theoretical and field studies had demonstrated that the HSP treatment resolves annular stress conditions near wellbore zoneexperienced by every conventional well (production and injection) if completed with gun and cumulative perforations. Thestatistical data available to OWC strongly validates the HSP cost efficiency done on depleted wells in low price oil market.

The US oil exploration industry and academia neglected available data and the major role of stress condition around thewellbore zone and necessity of the HSP treatment as prerequisite to other known conventional methods of the EOR.

OWC EOR introduces techniques to manage the decreased reservoir pressure after decades of oil exploration and to access tothe closed pores across entire volume of the producing layers. Despite of the potentials to extract a large quantities of oil, thefield study of our integrated solution as a whole had never been done before at the US oilfields.

Hydraulic fracturing after the HSP is performed will be much easier and with much less working pressure: along directionscreated by jet slots. The HSP slot opening contributes to an increase of well surrounding rocks permeability, thus to anincreased quantity of oil output.

In the production wells it is scarifying a large volume of the producing layers and is releasing an unattainable oil from closedpores. The created slots open an easy passage for released large oil flow down to the well shaft. Otherwise, oil is locked in theformation and is not able to reach well’s shaft because of an annular stress ring. The HSP gain is expected to reach 9-25 timesof an original depleted well levels.

In nearby injection wells their pressures will be set to normal levels needed to maintain production layer working pressure. Ifan ingestion pressure is currently at 1000 psi, then after the HSP it could go down to 250 psi. The restored reservoir pressurewill push oil to the neighboring production wells, oil in neighboring wells will begin to rise, and correspondingly there will be anincrease of the produced oil in all neighboring wells. After the HSP of the nearby Injection well – production well will raise oiloutput at 2-3 times.

Restored working pressure in the producing layers after slot cutting and hydro fracking will raise oil output in connected wellsup to 2-3 times. These results will be achieved by an injection of water or gas.

Plasma Pulse Discharge creates micro cracking in the rock formation. This method was invented and tested in Russia and the USas an alternative to a Hydraulic Fracturing. The results of its field applications demonstrated the rise of an oil output inproduction well of 4-5 times. The effect was short lived because its damage to the well’s casting and the formation in nearwellbore zone. However, slots created by the HSP will direct Plasma’s discharge direction and prevent well’s shaft damage.

OWC EOR Operation

Expected Gain

Values

Selected Minimal Values

1 Depleted well (barrels/day) 1 1

2Production oil well output gain after basic HSP (times)

9 -25 9

3Production well output gain after Injection well HSP (times)

2- 3 2

4Production well gain after Micro cracking Plasma Pulse (times)

4-5 4

5Production well output gain after Hydro fracking (times)

2-3 2

Total single well output gain (barrels/day) 144

Production wells after the basic HSP treatment will be able to raiseoil output from 1 barrel/day to 9- 25 barrels/day. For example,see results of the HSP treatments at Saskatchewan (Admiralty Oils,Ltd) and Nebraska (Branch Production, LLC) on page 6.

Using all the above data – please note probable well’s gain after allEOR treatments shown in the table on a right.

These calculations were made only for a single production well in avicinity of an injection well; multiple wells around treated injectionwell are expected to produce similar or larger gains for each ofthem.

Expected Revenue Increase

Average Treatment Expenses per Each Well US Dollars $120,000

Number of HSP Treated Wells Qty 3 2 Production and 1 Injection Wells

HSP Cost for All Treated Wells US Dollars $360,000

Additional EOR Treatments (Plasma + Hydro fracking) US Dollars $120,000

Total Cost of OWC EOR US Dollars $480,000 Note1: First production year revenue is reduced by OWC EOR treatment costs

Projected Minimum Price per Barrel US Dollars $40 Note2: OWC EOR will still be profitable even at $10 per barrel oil price

Average Oil Output Before OWC EOR Treatment Bbl/day 1

Expected Oil Output After OWC EOR Treatment Bbl/day 144

ROI after OWC EOR Treatment Months 3.2 Production Years 5 Years Total EOR

Cost

Total EOR Revenue

Gain1 2 3 4 5

2 Production Wells Projected Revenues Before OWC EOR Treatment: $24,500 $23,375 $22,111 $21,006 $19,955 $110,847

2 Production Wells Projected Revenues After OWC EOR Treatment: $3,024,000 $3,327,600 $3,160,020 $3,000,819 $2,849,578 $15,362,017 13759%

THE BOTTOM LINE: COMPARED WITH OTHER EOR TECHNOLOGIES OWC EOR WILL PROVIDE THE BEST PROFITABILITY AND LONGEVITY

Field Trial Objectives

Try to attract $500K to $600K of investments and a partner who will be interested in commercialization of the HSP integrated solution proposed by the OWC.

For the purpose of the commercialization run a field test in order to: o support all projected benefits and feasibility of the OWC EOR integrated solutiono establish a real quantity of an extracted oil and OWC EOR profitability at a current low cost oil market

HYDRO SLOTTING PERFORATION (HSP) INTEGRATED WITH … … · Oil Well Consulting, LLC (OWC)...

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