Adjustable Speed Drives (ASD): Failure Reduction and Production Optimization Notes go here. Frank Ochoa 07/25/2007

Introduction The Adjustable Speed Drive utilizes sensorless vector software to determine load and position. In a dynamic well environment, the ASD can seek the optimum Strokes Per Minute (SPM) to maintain a fluid level just above pump off, without shutting the well down. This results in a reduction of equipment loading, reduces failures, and maximizes fluid inflow to the wellbore. I will discuss the ASD: it’s features and how it operates. We will then look at some of the wells that received the initial ASD’s, and see the results of having a drive on those wells. From those wells, we’ve determined the applications that we feel the drive is best suited for. We’ll also discuss the selection process for finding wells that fit into those applications. Finally, I will discuss the current results of ASD deployment and where we go from here.

Agenda Capabilities of the ASD Case Studies Applications of the ASD Selection Process Results and Projections

Capabilities of the ASD Continuously Adjusts Motor Speed to Match Productivity of the Well Intra-Stroke Speed Variation Slower Down-stroke Faster Upstroke Internal Pump Off Control or paired with Lufkin SAMS Controller Converts Single-phase Power to Three-phase Soft Start Drive Software Motor Torque is sensed and used to control the drive Let’s talk about the difference between an ASD and a standard POC. When a POC detects pump-off, it shuts down for a set amount of time to let the well recover, then comes on and full speed until the next pump-off is detected. This process keeps repeating itself. When an ASD detects pump-off, it slows the well down, rather than shutting it off. It then monitors the well, and if it is recovering, it slowly increases the SPM until it either reaches a steady state, or it goes to pump-off again. This prevents the well from shutting down, which can have tremendous benefits.

ASD Provider Lufkin ASD Original Drive Tested Current Drive Software Crane, TX Original Drive Tested Cutler Hammer SVX-9000 Current Drive Toshiba Software SALT Sensorless Artificial Lift Technology

Vendor Stated ASD Lift Applications Conventional Pumping Units Most common artificial lift unit. Rotaflex Units A Rotaflex is an “ultra” long stroke pumping unit that is used primarily for deep high-volume wells. Fills a niche between conventional and ESP units.

Case Studies Wells Objectives Validate ASD Applications #43 Sec. 198 Develop Selection Criteria Develop Standard Setup Wells #43 Sec. 198 #402 Sec.198

#408 Section 198 Job Reason Date Rod String Failure 9/15/2006 Rod String Failure 9/29/2003 Tubing Failure 8/29/2003 Rod String Failure 10/5/2002 Pump Failure 4/19/2000 Rotaflex Unit 20 BOPD, 700 BWPD 2 ¾” Big Bore Pump SPM: Constant 4.3 288” Stroke Length Hard Pump Off

Stroke per Minute Decrease #43 Section 198 Job Failure End Date Rod String Failure 6/23/2006 Stroke per Minute Decrease 2/16/2006 2/9/2006 Tubing Failure 6/21/2005 1/22/2005 10/5/2004 Rod Pump Failure 3/14/2004 Conventional 640 Pump Unit 120 BOPD, 200 BWPD 2 ¾” LB Pump SPM: Constant 8.6 168” Stroke Length High Cycle Rate 3 Failures in 12 Months 120 BOPD translates to $7200/Day using $60 Oil

ASD Applications Failure Rate Reduction New Well Stabilization Eliminate Fluid Pound Reduce Rod Buckling Reduce or Eliminate Cycling Conventional, ESP, and Rota-flex Smooth Upstroke/Downstroke Transition Reduce Motor Temperature New Well Stabilization Rota-flex Optimization Three Phase power is required for higher-power applications. Transistorized inverter drives also allow the more-efficient three-phase motors to be used when only single-phase mains current is available.

Eliminate Fluid Pound Fluid pound is caused by Incomplete Pump Fillage. It can lead to: Shock Wave Gearbox Wear Loss of Coupling Displacement Equipment Failure Rod Fatigue Rod Wear Tubing Wear Pump Component Failure Loss of Coupling Displacement is when the rod string is pounding, the couplings loosen slightly on each pound. Over time this can cause the pins to break, or allow fluid to get into the couplings and cause damage through corrosion.

Reduce Rod Buckling Rod Buckling is the primary cause of tubing and rod wear failures. Rod buckling can be caused by: Fluid Pound Downstroke Compressive Forces Sucker Rod Velocity Crooked Hole Pump Sticking The ASD can reduce rod buckling by: Maintaining a fluid level above pump-off so that fluid pound does not occur. Slowing the downstroke while speeding up the upstroke to minimize compression.

Eliminate Cycling Less starting/stopping of the Equipment When the ASD detects pump-off, it slows the pump down instead of shutting it off. This allows the well to recover while maintaining fluid flow into the pump. This is advantageous for many reasons: Less starting/stopping of the Equipment Solids Control Continuous fluid flow eliminates sand, iron sulfide, etc. from falling back onto the pump. Continuous fluid flow reduces scale, paraffin and asphaltine buildup.

Upstroke/Down-stroke Transition Slower transitions reduce loads and stresses on both surface and down-hole equipment Applicable to Conventional Units Will be tested on Lufkin Mark Unit

New Well Stabilization Match changing well production Keeps solids moving during cleanup Compensate for minor design inefficiencies Maximize inflow by maintaining minimum fluid level in the wellbore

Rota-Flex Optimization The ASD can optimize these units by: Upstroke/Down-stroke Speed Variation Transition Load Reduction This translates into: Less Failures Less Wear on Equipment Longer Runtime Rota-Flex Unit Down-hole Equipment

ASD Candidate Selection Process New Wells Rota-Flex Units above 3.5 SPM ESP’s that cycle due to fluctuating production High Failure Rate Wells meeting certain Criteria We identify wells listed with 2 or more failures in the last 12 months. WellServ Lowis Catalyst We then sort the wells based on failure mode and operating conditions that the ASD could effect. Rod and Tubing Wear, Pump Failures SPM, Runtime, Stroke Length Meet with Artificial Lift/Corrosion Rep for final review and candidate selection

ASD Selection Process Reviewed Rota-flex SPM Repeat Failure Candidates 9% of wells account for 51% of failures Wells sorted by failure type Reviewed with Artificial Lift Rep Submit Recommended Wells

Results and Projections Adjustable Speed Drives have a definite benefit in the oilfield. When placed in the correct application, the ASD can: Reduce Failures Optimize Production Reduce Equipment Changes Reduce Operating Expenses Reduce Downtime Fast Payout

Potential Benefits Potential Concerns Power Savings Optimize Paraffin Treatment Schedule Efficiency Increases Nema B Motor v. “high-slip” Nema D Motor Power Factor of .97 Slip is the difference in speed between the rotor and and the rotating stator magnetic field. The greater the slip, the slower the rotor speed, and the more torque developed by the motor. Potential Harmonic Effect Potential Concerns