EVO ONE™Unified

Telemetry

October 21, 2016

Single Telemetry Weaknesses/Limitations

• MP typically is bandwidth challenged and drilling rates exceed update rates for poor dynamic data quality. Reliability can be low due to mechanical and hydraulic complexity.• EM has never cracked the large part of the

market as a stand alone due to telemetry drop-offs. Also current drilling is dominated by zones not historically suited to EM alone (i.e., Permian, Bakken, Woodford). • Acoustic so far difficult and non-economic in

horizontal land drilling• Wired drill pipe remains capital intensive and

not gaining market

Market Conditions vs MWD limitations

• Drilling costs need to come down to match market economics

• Reliability needs to come up (typically at 800 - 1,500hr MTBF)

• Cost of service delivery needs to come down (typically $50+ per downhole hr)

• Bandwidth and real time drilling dynamics need to improve (typically <1 bps and limited dynamics sensing)

EVO ONE platform • Ground up MWD redesign that unifies EM and MP and into simplified and robust platform

New Style of MWD• Designed in 2011-13• Commercial launch in 2014• Multi-telemetry high speed robust tool • Higher EM data rate -> up

to 16 bps (32 bps in field trials)• High mud pulse data rate -

> Up to 2.0 bps• Data transmits

simultaneous & independent on both channels• Drastically simplified and

ruggedized for high reliability

Competitor 32’ and EM only

EVO ONE Unified 13.7’

Steve 6’1”

Major Differences• Wider and shorter -> 2.5” & 13’ high voltage probe • Slick probe free of centralizers, same for all sizes• Full length stand alone fluid dampened centralization• Superior performance in high shock environments • Proprietary controlled collar system allowing for higher flow rates• Utilizes iOS app for display on wireless iPAD

Pulse-Jet Drive HighlightsAnti-Jam feature built with LCM in mind• Pulser detects

obstruction and activates the anti-jam sequence and charges capacitor bank.• With capacitor bank

fully charged the stored power is released and the rotor applies 120 in/lbs. of torque.• Anti-Jam sequence

consists of rotor moving to open position while capacitor bank charges, then hits 3 times and returns to the open position and repeats till obstruction is clear.

https://www.youtube.com/watch?v=cks1MIwF2Ms

EM Performance History by Basin

The blue line is in fact individualdata points (continuous inclination)during rotation or sliding while thered corresponds to stopped drillingsurvey points (typically connection)

Gamma Quality vs ROPPulse Tool vs EVO ONE Gamma Quality

Depth correlated offset well comparison (40-100ft spacing) DJ Basin

Typical Pulse Tool EVO ONE

Even at low ROP Pulse data rates can negatively impact gamma

quality

EVO ONE data rates and larger gamma crystal allow the

tool to provide very high quality gamma even at high ROP

Unified Telemetry Data Example• The screenshot to the left shows

the survey telemetry from both EM and MP.

• EM at 4 bit/s and showing a typical makeup of the survey frame. 16 bit raw axis survey plus qualifiers, downhole diagnostics (temp, pressure, resistance, tool health, etc.)

• MP at 1.1 bit/s and showing an example of mirrored long survey with TFs interlaced for active drilling support.

• The screenshot to the right shows the active frame telemetry from both EM and MP.

• EM at 4 bit/s and showing a portion of the active frame. TF and gamma are approx. 7 second refresh, and diagnostics typically every minute.

• MP at 1.1 bit/s with TF approx. every 16 sec and gamma every 20 to 30 sec, with lower level of diagnostics data.

Economics of EVO• Cost of low reliability (Tangible)• Savings from surveys during connection

(Tangible)• Production $$ from being in zone with better

data (Intangible)Spread Rate $60,000 Round Trip Hrs 18Op Cost/Hour $2,500 Survey Time (hrs) 0.25Days/Well 16 Surveys/Well 100Hrs/Well 384

Avg Cost/Well of MTBF On 1 Well 60 Wells 120 Wells 180 Wells 220 Wells800hr MTBF $21,600 $1,296,000 $2,592,000 $3,888,000 $4,752,0001,000hr MTBF $17,280 $1,036,800 $2,073,600 $3,110,400 $3,801,6002,000hr MTBF $8,640 $518,400 $1,036,800 $1,555,200 $1,900,8003,000hr MTBF $5,760 $345,600 $691,200 $1,036,800 $1,267,2004,000hr MTBF $4,320 $259,200 $518,400 $777,600 $950,400Survey Time Savings ($62,500) ($3,750,000) ($7,500,000) ($11,250,000) ($13,750,000)

Savings of 800 vs. 4,000 ($79,780) ($4,786,800) ($9,573,600) ($14,360,400) ($17,551,600)