New High Performance Resin for Thermoplastic Liners Zach Stearman, LJ Guillotte, Juan Cangas Lightning Rod & Pipe, Can-Altek International

Thermoplastic Liner Basics Plastic resin is extruded to pipe profile Mechanically bonded to the interior of the tubing Protects against wear and corrosion Eliminates the need for rod guides Many different resins are used for different environments

Benefits of Lined Tubing Extends the life of rods and tubing by eliminating rod on tubing wear Protects tubing from abrasion from solids Resistant to all chemicals found in well fluid including H2S and CO2 Eliminates the need for rod guides in rod pumping applications Does not crack or chip like other coatings Flexible to withstand deviation in the wellbore More economic than some other technologies such as boronized tubing

Thermoplastic Liner History Used in downhole applications for over twenty years Initially designed for injection wells, but quickly adapted because of success in mitigating rod on tubing wear High-density Polyethylene (HDPE) was the first resin used Soft, permeable Low temperature High Performance resins developed to meet the needs of more challenging environments Superior performance Very high cost

Thermoplastic Resin Liner Options General Specifications Material Type Max Temp. Dimensions H2S CO2 Cost HDPE 140° F 2 3/8" - 4 1/2" 2% 10% $ HDPE - Modified 210° F $$ POK - Modified 240° F 5% 20% PPS - Modified 340° F $$$$ PEEK 500° F $$$$$

History of POK use in the Oil Industry Originally developed by Shell as “Carilon” for offshore corrosion control and chemical resistance Resin production was discontinued in 2000, and the technology was sold to Hyosung Initially, Hyosung’s POK had a maximum continuous operating temperature of 210˚F. 2015 Hyosung and Lightning Rod & Pipe developed and tested the raised temperature POK resin for use in O&G down hole applications having a continuous working temperature of 240˚F.

Polyolefin Ketone Resin (POK) Unique engineering plastic with a carbon-only backbone Highly crystalline with a compact crystal structure Stable at high temperatures Has excellent abrasion/chemical/fuel resistance Gas barrier properties Its linear molecular chains are perfectly alternating carbon monoxide and alpha olefin structures Physical and chemical properties make the resin well suited for downhole applications

Results from POK lab testing Heat Deflection Temperature (HDT) 220° F allows for high continuous operating temperature High Melting Point of 222° C (433° F) Excellent permeation performance – Wet H2S and CO2 Resistance to Attack or Swelling Hydrocarbons, Ketones, Esters and Ethers, Inorganic Salts, Acid/Base Mechanically Resilient Excellent Ductility broad temperature range Elongation and Impact Hydrolysis Resistance

Properties of Polyketone Physical Properties Test Methods Unit Value Density ASTM D792 g/cm3 1.24 Water Absorption 23˚ C, 50RH ASTM D570 % 0.5 Mechanical Properties Tensile Strength at Yield 23˚ ASTM D638 MPa 56 Nominal Strain at Break 270 Flexural Strength ASTM D790 48 Flexural Modulus GPa 1.2 Thermal Properties Test Method Melting Temperature ASTM D3418 ˚C 222 Heat Deflection Temperature ASTM D648 104

Mechanical Properties at Extreme Temperatures Tensile Property (ASTM D638) POK PA11 BESNO P40TL PVDF Kynar 710 Solef 1010 HDPE PE3408 Modulus, Kpsi 484.6 170.7 368.4 402.4 303.6 Yield Stress, psi 12380 6815 11320 11210 5889 Yield strain, % 13.3 34.8 6.98 7.27 10.1 at 120℃ Tensile Property (ASTM D638) POK PA11 BESNO P40TL PVDF Kynar 710 Solef 1010 HDPE PE3408 Modulus, Kpsi 86.00 19.13 76.16 76.20 15.99 Yield Stress, psi 5600 - 2934 3064 Yield strain, % 22.97 12.3 12.8

Young’s Modulus, Mpa (kpsi) Chemical Resistance POK samples (tensile bars taken from extruded liner) exposed at various temperatures for 4 month Exposure Temp. ℃ Young’s Modulus, Mpa (kpsi) Yield Stress, Mpa (psi) Elongation at Yield, % Control exposed 20 1274 (183) 1173 (169) 61.6 (8863) 57.6 (8288) 33.8 34.4 40 1042 (150) 989 (142) 56.0 (8057) 54.4 (7827) 35.7 32.2 60 693 (100) 978 (141) 50.4 (7252) 54.8 (7885) 36.8 29.6 80 593 (85) 837 (120) 45.8 (6590) 50.7 (7295) 37.4 30.2 100 505 (72.7) 664 (95) 41.0 (5899) 40.2 (5784) 38.3 20.3 120 413 (59) 525 (75) 36.4 (5237) 30.3 (4360) 34.9 15.2 * Multicomponent Liquid: Benzene 1%; Toluene 7%; Xylene 11%; Cyclopentenes 6%; Cyclohexanes 6%; C4-C5 17%; C6-C10 42%; C11 10%

Chemical Resistance

Chemical Resistance Tensile Properties of POK after exposure to Nelson Fluid at 105˚C Exposure Time, days Modulus, MPa Yield Stress, MPa Yield Strain, % Break Stress, MPa Break Strain, % Volume Change, % Weight Change, % 1,699 62 22 84 322 -- 2 718 52 36 217 7.0 5.3 34 754 53 30 61 218 6.4 4.7 92 676 55 57 49 4.6 230 39 56 114 6.5 5.0

Swell Resistance * Multicomponent Liquid: Benzene 1%; Toluene 7%; Xylene 11%; Cyclopentenes 6%; Cyclohexanes 6%; C4-C5 17%; C6-C10 42%; C11 10%

Impact Strength, ft-lb/in Chemical Resistance Tensile Properties of POK after exposure to Multicomponent Fluid, 90 days, 120˚C, 2800 psi Hardness, Shore D Peak Load, lbf Flexural Strength, ksi Modulus, ksi Yield Stress, Elongation at Yield, % Tensile Stress, ksi Elongation at Break, % Unexposed 75.2 38.6 9.10 204 7.84 18 28 Exposed, 60 days, 110˚C, 2500 psi 27.1 6.80 139 8.383 Exposed, 90 days, 120˚C, 2800 psi 76.6 33.3 9.53 233 8.211 8.222 34 Width, in Depth Under Notch, in Impact Energy, ft-lb Impact Strength, ft-lb/in Unexposed 75.2 38.6 9.10 204 Exposed, 90 days, 120˚C, 2800 psi 76.6 33.3 9.53 233 * Multicomponent Fluid: 33% water + 42% Hydrocarbon (Aromatic, Aliphatic – Benzene 1%, Toluene 7%, Xylene 11%, Cyclopentene 6%, Cyclohexane 6%, C4-C5 17%, C6-C10 42%, C11 10%) + 25% “Ph4” Gas (CO2 10%, H2S 5%, CH4 85%)

Abrasion Resistance Certified test center (external agencies) Test Method: ASTM G 137 With the pressure on the block, total abrasion on the ring which rotates is measured The conditions: Temperature of specimen (Room temp. or 130-200˚C). Rotational speed of rings (0.01~2m/s). Pressure on the block (5~30Mpa) Specimen Standard: Ring (50mm Dia. X 28mm width, Block (6.35mm x 12.7) Wear-resistant test in room temp. Allowable limit temp.: 225˚C

Abrasion Resistance External Agencies (Certified test center) Resin on Resin (same materials) Same Condition except maintaining 0.1 MPa Under 1.5m/s, 0.1MPa Condition, PK abrasion loss is the lowest among the test materials. Linear wear rate, um/h Material 380 rpm 470 rpm 570 rpm Rotation speed, m/s Case I. Case II. Case III. Condition Block Ring Abrasion loss (um/hr) Pressure (MPa) Speed m/s (rpm) Temp(℃) Time (hr) POK 1 POM 164 PA66 66 0.1 1.00 (380) 23 21 202 156 1.25 (470) 86 263 466 1.50 (570) Materials : POK = M630A base resin, POM = Duracon M90-44 base resin, PA66 = Zytel 101 base resin PK is inferior than other materials under over 1.5m/s, 0.1MPa Condition. Abrasion loss (1.75m/s, 0.1MPa) : PK=1,078um/h, POM=619um/h, PA66=1,135um/h Abrasion loss (1m/s, 0.175MPa) : PK=48,226um/h, POM=49um/h, PA66=149um/h 17

Gas Barrier Properties CH4 Permeation Rate HDPE PA11 Unit : 109 cm3 – cm/cm2s bar

Initial Field Trials Install Date Customer Location Previous Run Time Run Time to Date 8/29/2016 Customer A Midland County 6 month maximum 267 days 9/29/2016 Customer B Reeves County 6 month average 236 days 11/17/2016 90 day average 187 days 12/8/2016 New Install 166 days 2/3/2017 Customer C 109 days 3/13/2017 71 days

Conclusion POK is a new high performance resin that is being extruded to increase the life of artificially lifted wells Meets temperature needs for hot oiling at a much lower cost than other high performance resins Excellent mechanical properties, chemical resistance, abrasion resistance, and barrier properties Field trials are underway and initial results are promising

Thank you! Hyosung Corporation Can-Altek International Southwest Research Institutes SWPSC Association Audience for listening!