1. Exposing formation to Hydraulic Pressure- Technology Advancement for Horseshoe Canyon CBM Stimulation Original Presentation by: Francois Cantaloube – Schlumberger Mike Yu – EnCana Corporation. CSUG – Nov 2008. Francois Cantaloube– Schlumberger

2. Agenda  The Conventional Approach  The ThorFRAC Approach  Bottom-Hole Dynamics  Tool Capabilities  Case History and Results

3. The Conventional Approach  Coal Cleat Matrix ─ Natural path of least resistance  Preferential damage path  Complex stimulation requirements ─ Low Young’s modulus  Stimulation fluid ─ Low effective viscosity of N2 ─ Compressibility  Equipment limitation at surface ─ Inefficiency due to friction losses ─ Bigger footprint ─ Higher costs Operational constraints limit high pumping rates Reservoir conditions require High N2 pump rates for an optimized stimulation

4. Effective Pressure at the Coal Face N2 Pumping rate @ 1200 scm / min Efficiency loss in the system

5. Mechanisms at Coalface Pressurizing BH N2 leak-off into formation as BH is pressurized prior to break down

6. Mechanisms at Coalface Break down

7. Mechanisms at Coalface Remaining volume injection

8. Limitations on Current Practices  Significant fracture propagation is not likely to occur with low viscosity (N2)  Experimental approaches have shown that ultra high-rates deliver better stimulation results than high-volumes  Current “high pumping rates” are limited by friction losses  CBM economics limit major operational cost increases

9. 9 The inefficiency of the current approach has triggered the need to optimize the process of CBM stimulation Develop a Multi-zone/high-rate system that effectively transfers energy/pressure to the formation*, optimizing the volume of N2 used. * Patented process (#2 550 750) Changing The Game

10. Effective pressure at the coal face N2 Pumping rate @ 1200 scm / min

11. Pressurizing BHA High-Energy Release at Coalface (ThorFRAC)

12. Pressurizing BHA No N2 leak-off into formation as BH is pressurized N2 Volume optimization High-Energy Release at Coalface (ThorFRAC)

13. Pressure Released at highest rate possible in a N2 CoilFRAC treatment High-Energy Release at Coalface (ThorFRAC)

14. Incremental surface area exposed during subsequent pumping High-Energy Release at Coalface (ThorFRAC)

15. Bottom-Hole Dynamics Pressure loss in the system

16. Bottom-hole Dynamics

17. Tool Capabilities  Operation: ─ Actuate as many times as required. ─ Actuate at any release pressure without POOH. ─ Follow-up pumping after pressure release. ─ 1 meter minimum interval straddle.  Real Time Depth control (CCL) and BHP & BHT enabled through fiber optics.  Fluids: ─ Nitrogen: all current cases. ─ Foam: no cases but no apparent restrictions ─ Slurry: Will need to determine the effects on tool.  Depth: ~1,000 meters range.  Casing: 114.3mm, current. 139.7mm, doable.  Pressure Limitation: Tool (49,000 kPa), Cups (35,000 kPa).

18. Case History  Formation: Horse Shoe Canyon CBM (Belly River formation completed in some wells)  24 wells on six 4-well pads  New completions- No re-fracs  Perform 2 High Energy Release, and 2 Conventional treatments per pad

19. Study Area Locations

20. Eight-Month Cumulative Production Comparison North Areas South Areas “Wet” Section

21. Statistical Analysis Belly River Completed BLRV Contribution Poor gas production due to Wet Section Completion by Pad

22. Statistical Analysis 40% Improvement

23. Field Production Comparison

24. 24 Flow contribution post Conventional N2 Fracturing

25. 25 Flow contribution post Conventional ThorFRAC Fracturing

26. Conclusions  Bottom-hole assembly function as per design  Pressure response indicates more surface area was opened  No complication of surface logistics  Horseshoe Canyon CBM production improvement >40%  Spinner logs run on each wells stimulated with the 2 different methods have shown a more consistent production contribution per zone  Full potential of high-energy release system yet to be realized

27. 27 CONTACT Reservoir Maximize Reserves Effective stimulation Increase production rates