New Oil and Gas Drilling and Production Technologies Radius Energy, LLC May, 2013

Growth in Horizontal Drilling in Recent Years

Horizontal Wells Horizontal wells are often better suited for developing layered , tabular deposits (resource plays) such as coalbed methane and shale Now well established, this process provides a lower cost resource development process .    …………… But…………. Horizontal wells still often present unique drilling and production related problems. New technology may be available to further reduce the cost of drilling and producing horizontal wells.

PROBLEM 1 - Vertical wells have sump (“rat hole”) to place pump Liquid separates in vertical section; falls to sump Sump is below producing formations; No fluid head pressure to hinder production Gravity Separation: Gas rises to surface Liquid falls into Sump (“Rat-Hole”)

BUT - Horizontal wells have no rat hole – Pump must be placed directly in production stream Any gas production causes interference with pump’s ability to pump liquid Inefficient pumping causes liquid level to build; High bottom-hole pressure hinders production Gas Interference Pump is unable to “pump” gas – Fluid level raises

Sealing Device: CLOSED SOLUTION: Selective create a seal below the pump to temporally form an isolated pumping chamber : Form seal Pump liquid Release Seal Normal Operation: Sealing Device OPEN Pump OFF Sealing Device: OPEN Pumping Cycle: Sealing Device: CLOSED Pump ON Sealing Device: CLOSED

PROBLEM 2 – Electric pump cable can become damaged when being installed in deviated well Electric Cable exposed to damage Electric Submersible Pump (ESP)

SOLUTION: Use “Wet Connect” to install pump cable inside of discharge tubing after pump is in place. Pump-down plug pulls cable into tubing – even into horizontal sections

PROBLEM 3 – Solids may settle along bottom of horizontal well – Blocking flow or inlet to pump Solids settle along bottom of well, blocking flow and inlet to the pump

SOLUTION: Slowly rotate tubing with eccentric tail joint to keep solids agitated and in suspension. Suspended solids removed from well along with other production liquids. Helically shaped tail-joint “wipes” the circumference of well bore to agitate solids

SUMMARY - A number of new technologies can be applied to aid in the deliquification of horizontal wells. Gas interference can be eliminated by cycling the pumping and gas producing periods. A number of tools and methods can be used to isolate the pump from the flow of gas. By setting the frequency of the pumping cycle to a relatively short interval of time, there is little effect to the performance of the well. For more information, please contact: Joseph A. Zupanick, PE Radius Energy Services, LLC (304) 688-6556 Joe.Zupanick@RadiusEnergy.com