1. Under-balanced well bore cleanout and production evaluation technology

2. Presentation Overview Technology Validation How It Works Applications Benefits Case Histories & Successes

3. Questions Surrounding Horizontal Well designs How long should the lateral section be in a given formation? Is drainage making it to the toe of the lateral? Liner design, open hole packer ball frac, cemented liner etc. Optimize stimultion size and type What is the PBHP and inflow characteristics at specific intervals or stages? How does this correlate with frac type / volume and strip log. Flow characteristics of fluid and solids in a horizontal liner Drainage Area

4. Hz well information? How do we gather it? High water cut gas inflow High oil cut $$

5. Sub-hydrostatic or under-pressured reservoirs Horizontal and extended reach well designs Velocities in liners allow for solids settling Lateral producing interval may not be 100% utilized (undulations) Investigating inflow characteristics on non-flowing oil wells Technology Validation

6. Technology Validation Technology Validation Alternative processes such as; Fluid circulation Coiled tubing gas/foam cleanouts Tubing bailing Swabbing all have limitations and can no longer be generally applied to our complex horizontal well designs. –Adds pressure to formation (over-balanced, potential formation damage due to fluid loss) –Does not work in Hz –Costly to deploy –Slow process --- › expensive

7. How it Works This systems utilizes two unique technologies that have revolutionized horizontal well bore intervention and operations. Our JetVak™ system utilizes Dual Coiled tubing technology as well as specifically engineered jet pump to remove solids and liquids from well bores. The primary function of this technology is to create a low pressure environment in the well bore to pump the fluid and/or solids to surface up the second conduit in the Dual Coil. Dual Coiled Tubing

8. Venturi principle, applies to JetPak & JetVak Venturi principle, applies to JetPak & JetVak Pump Intake Pump Discharge Injection Pressure Velocity Suction Pressure Surface Returns Pressure Velocity

9. JetPak™ Pump Efficiency Curve

10. Applications Horizontal frac or produced sand cleanout Horizontal production evaluation (isolated) –Identify water sources or re-stimulation intervals Drilling fluid damage mitigation and cleanout Liner failure cleanout and detection Injection well cleanout High volume and high permeability well cleanout SAGD or cyclic steam flood well cleanout

11. Alberta Research Counsel study on “tight Oil” Moving Solids? Rule of thumb: Vertical well: 1 ft/s Hz well: 3 ft/s Durand Equation (with Wasp correction for particle size)

12. Alberta Research Counsel study on “tight Oil” Moving Solids?

13. Production Cleanouts well #1 Quick prod. decline, conventional 38.1mm coil / N2 cleanouts attempted in 2012, sand bridge at 914m, sub-hydrostatic res., no fluid, gas or solids circulation, 0.24 psi/ft or 5.43kPa/meter Quantum JetVak CO conducted on Jan 23 rd. Pump rate 86lpm, venturi volume 69lpm, jet volume 17lpm Return rate 120lpm, gross return rate 51lpm, net return rate 34lpm. Avg sand cut 0.75% of gross, highest sand cut 7%. 20% gross oil cuts from toe of well, net 71% oil cut Sand removed from well during this job 2.4m3 or 3840kgs. 27% of liner volume assuming no inflow

14. Production Cleanouts well #1 Quick prod. decline, conventional 38.1mm coil / N2 cleanouts attempted in 2012, sand bridge at 3000’, sub-hydrostatic res., no fluid, gas or solids circulation, 0.24 psi/ft. Quantum JetVak CO conducted on Jan 23 rd. Pump rate 22.6gpm, venturi volume 18gpm, jet volume 4.6glpm Return rate 31gpm, gross return rate 13gpm, net return rate 8.4pm. Avg sand cut 0.75% of gross, highest sand cut 7%. 20% gross oil cuts from toe of well, net 71% oil cut Sand removed from well during this job 631g or 1745lbs. 27% of liner volume assuming no inflow

18. Production Cleanouts well #1 Quick prod. decline, previous 1.5” coil / N2 cleanouts attempted in 2012, sand bridge at 3000’, sub-hydrostatic res., no fluid circulation, 0.24 psi/ft. Quantum JetVak CO conducted on Jan 23 rd. Pump rate 22.6 gpm, return rate 31.5 gpm, net return rate 8.9 gpm. Avg sand cut 0.75% of gross, highest sand cut 7%. 20% gross oil cuts from toe of well, net 84% Sand removed from well during this job 5280 lbs. 27% of liner volume assuming no inflow Post JetVak jobs in this field seem to reduce water cuts and increase oil productivity. Quick prod. decline, conventional 38.1mm coil / N2 cleanouts attempted in 2012, sand bridge at 914m, sub-hydrostatic res., no fluid, gas or solids circulation, 0.24 psi/ft or 5.43kPa/meter Quantum JetVak CO conducted on Jan 23 rd. Pump rate 86lpm, venturi volume 69lpm, jet volume 17lpm Return rate 120lpm, gross return rate 51lpm, net return rate 34lpm. Avg sand cut 0.75% of gross, highest sand cut 7%. 20% gross oil cuts from toe of well, net 71% oil cut Sand removed from well during this job 2.4m3 or 3840kgs. 27% of liner volume assuming no inflow Post JetVak jobs in this field seem to reduce water cuts and increase oil productivity.

19. Production Cleanouts well #1 Quick prod. decline, conventional 38.1mm coil / N2 cleanouts attempted in 2012, sand bridge at 3000’, sub-hydrostatic res., no fluid, gas or solids circulation, 0.24 psi/ft. Quantum JetVak CO conducted on Jan 23 rd. Pump rate 22.6gpm, venturi volume 18gpm, jet volume 4.6glpm Return rate 31gpm, gross return rate 13gpm, net return rate 8.4gpm. Avg sand cut 0.75% of gross, highest sand cut 7%. 20% gross oil cuts from toe of well, net 71% oil cut Sand removed from well during this job 15bbl or 1745lbs. 27% of liner volume assuming no inflow Post JetVak jobs in this field seem to reduce water cuts and increase oil productivity.

20. Production Cleanouts well #2 Production pump issues, milled out and conventional CO attempted no circulation of fluid or sand. Quantum JetVak CO RIH #1 conducted May 01 2013, tagged solid obstruction 1610m. Mill re-run on May 3 to PBTD. JetVak re-run (Vac only) on May 6, bridge and 7% solids at the 1585m again, correlates with a low spot as per deviation survey. Pump rate 76lpm, venturi volume 65lpm, jet volume 11lpm. Return rate 89lpm, gross return rate 24lpm, net return rate 13lpm. Avg sand cut 0.25% of gross, highest sand cut 18%. Once through this depth strong gas inflow from all ports to the toe, indicting they have not produced since drilled. Sand removed from well during this job 1.0m3 or 1600kgs. 15% of liner volume, assuming no inflow.

21. Production Cleanouts well #2 Production pump issues, milled out and conventional CO attempted no circulation of fluid or sand. Quantum JetVak CO RIH #1 conducted May 01 2013, tagged solid obstruction 5280ft. Mill re-run on May 3 to PBTD. JetVak re-run (Vac only) on May 6, bridge and 7% solids at the 5200ft. again, correlates with a low spot or trap as per deviation survey. Pump rate 18gpm, venturi volume 18gpm, jet volume 0gpm. Return rate 25pm, net return rate 7pm. Avg sand cut 0.25% of gross, highest sand cut 18%. Once through this depth strong gas inflow from all ports to the toe, indicting they have not produced since well was stimulated. Sand removed from well during this job 6.2bbl or 3520lbs. 15% of liner volume, assuming no inflow.

24. Partially plugged intake Well bore cooling due to significant gas inflow, Immediate cooling effects as the jet pump passes ports

25. Production pump issues, milled out and conventional CO attempted no circulation of fluid or sand. Quantum JetVak CO RIH #1 conducted May 01 2013, tagged solid obstruction 1610m. Mill re-run on May 3 to PBTD. JetVak re-run (Vac only) on May 6, bridge and 7% solids at the 1585m again, correlates with a low spot as per deviation survey. Pump rate 67lpm, venturi volume 67lpm, jet volume 0lpm. Return rate 89lpm, net return rate 22lpm. Avg sand cut 0.25% of gross, highest sand cut 18%. Once through this depth strong gas inflow from all ports to the toe, indicting they have not produced since drilled. Sand removed from well during this job 1.0m3 or 1600kgs. 15% of liner volume, assuming no inflow.

26. Production pump issues, milled out and conventional CO attempted no circulation of fluid or sand. Quantum JetVak CO RIH #1 conducted May 01 2013, tagged solid obstruction 5280ft. Mill re-run on May 3 to PBTD. JetVak re-run (Vac only) on May 6, bridge and 7% solids at the 5200ft. again, correlates with a low spot or trap as per deviation survey. Pump rate 17.6gpm, venturi volume 17.6gpm, jet volume 0gpm. Return rate 23pm, net return rate 6.4pm. Avg sand cut 0.25% of gross, highest sand cut 18%. Once through this depth strong gas inflow from all ports to the toe, indicting they have not produced since well was stimulated. Sand removed from well during this job 6.2bbl or 3520lbs. 15% of liner volume, assuming no inflow.

27. Re-stimulation candidate

28. Drilling fluid/solids cleanout and damage mitigation Formation pore pressure during drilling/fluid losses Filter cake/damage How is the “breaker” deployed How is IP and long term production affected The JetVak system creates a localized drawdown in the liner or open hole to remove possible damaged areas and establish inflow throughout the entire lateral

29. Current producing well comparison total production

30. Current producing well comparison water production

31. Difficulty maintaining production and burning P.C pumps up due to lack of fluid level. Quantum JetVak CO conducted September 2010, 2.5 m3 or 2000kgs of formation sand removed. Friction reducing and oil dispersing chemical used in the power fluid. Pump rate 88lpm, venturi volume 68lpm, jet volume 20lpm. Return rate 95lpm, gross return rate 27lpm, net return rate 7.0lpm. Avg sand cut 3.25% of gross, highest sand cut 27%. Sand removed from well during this job 2.5m3 or 4100kgs. 31% of liner volume, assuming no inflow.

32. Difficulty maintaining production and burning P.C pumps up due to lack of fluid level. Quantum JetVak CO conducted September 2010. Friction reducing and oil dispersing chemical used in the power fluid. Pump rate 23gpm, venturi volume 17gpm, jet volume 6gpm. Return rate 25gpm, gross return rate 8gpm, net return rate 2gpm. Avg sand cut 3.25% of gross, highest sand cut 27%. 15bbl or 8800lbs. of formation sand removed 31% of liner volume, assuming no inflow.

33. Field Operations

34. Data Collection

37. Conclusions Horizontal wells are much more complex than we give them credit for, there for our processes and tools that we use on them must also be more investigative and complex. As reservoir pressures deplete the success ratio of existing cleanout technology will be reduced. Production evaluating will become more common as we identify water sources and re-stimulation intervals.

38. Thank you for your time. I invite any questions. Presented by: Steven Winkler Adding value through technology