2. NFSI Super System

3. Our Mission Is to provide our customers the best new technologies and select existing technologies with honesty and integrity. NFSI can design drilling fluid programs for all types of wells.

5. Environmentally Friendly NFSI Super System

6. Benefits Ease of application Formation compatibility Contaminant friendly Enhanced borehole stability

7. Advantages NFSI SYSTEMINVERT Gauged Hole Resistance to Chemical Contamination Lubricity Excellent Hole Cleaning No disposal problems (passed Microtox EC 50 Bioassay) LC 50 No aromatics to cause harm to rig personnel No extra rigging up costs required Less Expensive (equipment rental, trucking) Solids Tolerance Gauged Hole Resistance to Chemical Contamination Drilling water sensitive shale's Lubricity Fast Penetration Rates Solids Tolerance

9. Composition of NFSI System NFS-VISCAPSULE TM Viscosifier NFS-FILTRATECAPSULE TM Filtrate Control NFS-SHALECAPSULE TM Shale Stabilizer NFS-TORQCAPSULE TM Friction Reducer NFS-LUBRACAPSULE TM Accelerator / ROP Enhancer

10. Composition of NFSI System NFS-FILTRATECAPSULE TM Filtrate Control NFS-TORQCAPSULE TM Friction Reducer NFS-VISCAPSULE TM Viscosifier NFS-SHALECAPSULE TM Shale Stabilizer NFS-LUBRACAPSULE TM Accelerator / ROP Enhancer Before Shale ExposureAfter Hot Roll and Drying Sample from Arkansas

11. Economics Significantly lower total cost per barrel No environmental clean-up cost No cuttings transportation cost Lower transportation cost Availability of fresh or seawater as base fluid Low maintenance cost

12. Economics Significantly lower total cost per barrel

13. NFS-Super SystemInvert

14. Test IDNFS- Super System TEST DATEJan-17-2007 Test GroupNFS-Houston lab 01172007 TESTED BYMano Shaarpour/Sam Khosh SAMPLE VOLUME350 ml/275 PRODUCTS/MIXTURES PRODUCTS UNITS12 1a2a Freshwater ml350275 350275 NFS-VISCAPSULE ™ g11.09.5 11.09.5 NFS-FILTRATECAPSULE ™ g2.01.0 2.01.0 NFS-TORQCAPSULE ™ ml3.5 NFS-LUBRACAPSULE ™ ml3.5 NFS-SHALECAPSULE ™ ml7.0 Rev Dust g5.04.0 5.03.0 Bariteg250205 PERIOD AGED HOURS 16 TEMPERATURE °F 150 DYNAMIC/STATIC D/S DD RHEOLOGY:TEMP.°F120 600 RPM 7174 6971 300 RPM 4648 4344 200 RPM 3133 2930 100 RPM 1918 2017 6 RPM 65 54 3 RPM 43 33 GELS 10" lbs/100ft243 33 GELS 10' lbs/100ft265 56 PLASTIC VISC.cP2526 27 YIELD POINT lbs/100ft22122 17 AccretionANAHUAC% 50.651.6 OXFORD% 39.236.8 Lubricity 5/10 Min.09/.11.12/.14 API FLUID LOSS ml 3.44.4 SHALE EROSION % % 1.61.8 pH 10.410.1 9.89.6 COMMENTS:Testing and evaluations of NFS-Super System with new NFS-Shalecapsule test number one is with full 350 cc water and test number 2 is with 275 cc for a finish barrel of mud 12.2 ppg The results of 1 a and 2 a are after the hot rolling

16. Location: Woodville, TX Well name: ETOC T. Hole Total depth: 7300’ Casing 9/58” and 7/78” Mud System: NFS-Super System Water base. Drilled a 12/25” surface hole to 1750’ with conventional gel/water mud. Sat the surface casing 9/58” casing and tested the casing. --Cleaned the mud tanks and filled with freshwater and began additions of NFS-Super System. --Added 10 ppb of NFS-Viscapsule, 1% by volume NFS-Shalecapsule, followed by 1% by volume NFS-Torqcapsule. --Maintained a 31-34 funnel viscosity and drilled cement with the new mud system. Drilled approximately 120’ cement without any contamination. --Began drilling the 8¾” hole with super system from 1750’ to 2800’. Maintained chemical addition except for NFS-Shalecapsule; at this point mud viscosity was too high. Water was added to the system and the desander/desilter was started. Well Recap

17. --Drilling stopped and pulled the bit to casing and began to circulate and conditioned mud. Added large volume of water and additions of NFS-Viscapsule, NFS-Shalecapsule and NFS-Torqcapsule; time to condition mud was approximately 4 hours. --Mud was conditioned and resumed drilling operation. Drilling continued at the fast rate of penetration (drilled 1200’ in approximately 12 hours) --Drilled the 8 ¾” to 6500’ and increased mud density to 9.6 ppg from 9.1 ppg using barite. Chemical addition continued to maintain a <6 cc filtrate. --Drilling continued to 7300’ total depth. Circulated bottoms up, made a short trip, back to bottom with no fill. --Pulled the bit out of hole and ran successful logs to bottom, no fill. Ran the casing bottom, no fill. Well Recap continued

18. Conclusion: NFS-Super System was used successfully to drill this 7300’ well in record time. Total drilling days were reduced by two days, a gage hole was drilled and logged the well successfully. Surface hole from 1750’ to approximately 6500’ had lots of reactive shale and clay, which was encapsulated with the NFS-Super System. While drilling cement, no contamination was observed; in addition the shale shakers handled the flow rate without any gumbo sticking to the screens. Important information to apply for future wells: A: Run MBT every 1000-1500’ of new hole drilled. Maintain a MBT of <10 B: Run good stream of water at shaker while your drilling, any other water base muds, 15% to 20% dilution C:Run shaker screens of 150 to 210 mesh, plus run desander/desilter as long as possible Well Recap continued

19. Conclusion This new and revolutionary water based system is now available. NFSI is excited, prepared, and anxiously awaiting to help meet your drilling needs. NFSI currently has finished product available in inventory located in Houston, TX. 713-780-3600 www.newfluid.com

20. Questions?