1. INTEGRATED PRODUCTION SERVICES Wellhead Management from Day 1 December 11, 2001

2. INTEGRATED PRODUCTION SERVICES Agenda Who is IPS? How have we managed our Gas Wells in the past? What is Wellhead Management from Day 1? How do we ensure that our wells are delivering the most Production possible? How can the IPS/Menex solution deliver higher profits?

3. INTEGRATED PRODUCTION SERVICES IPS Operating Units Project Mgmt & Engineering Artificial Lift Tools & Systems Production Testing Slickline Services Cased Hole Electric Line Oil & Gas Well Optimization Well Automation & Diagnostic Instruments Production Manufacturing Production & Reservoir Knowledge

4. INTEGRATED PRODUCTION SERVICES Basic Common Shares24.9 million Fully Diluted 27.2 million Recent Price (Dec 10)$2.20/share Market Cap (Dec 10)$60 million 52 Week High$4.30 52 Week Low$2.20 IPS the Public Company

5. INTEGRATED PRODUCTION SERVICES Majority Shareholders of IPS?

6. INTEGRATED PRODUCTION SERVICES How have we managed our Gas Wells in the Past?

7. INTEGRATED PRODUCTION SERVICES Circular Charts Daily, Weekly or Monthly Averages Trends from various Scada outputs Verbal reports from the well operators Web based access to data What is the format of your production data?

8. INTEGRATED PRODUCTION SERVICES Flow rates, line pressures and temperatures –Everything is fine –Production is up –Production is down –On line time for the well is lower than last month –On line time for the well is higher than last month What does the production data tell us?

9. INTEGRATED PRODUCTION SERVICES Casing and Tubing pressures; historically or current Why the well’s production is higher or lower than last month Why your well was the first one to be shut in and the last one to be started up following a disruption at the plant or in the flowline What doesn’t the production data tell us?

10. INTEGRATED PRODUCTION SERVICES Typical Life Cycle of a Gas Well Primary Production Secondary Production P r o d u c ti o n / d a y Normal Decline What determines when we shift from primary to secondary Production?

11. INTEGRATED PRODUCTION SERVICES What is it? –The minimum rate required which will enable the well to lift it’s own liquids. Why does it change? –Lower reservoir pressure. –Higher liquid production. –Variance in line pressures. What does it do to your production? –Normally costs you production. Critical Rate

12. INTEGRATED PRODUCTION SERVICES Typical Life Cycle of a Gas Well Primary Production Secondary Production P r o d u c ti o n / d a y CRITICAL RATE Normal Decline

13. INTEGRATED PRODUCTION SERVICES What do we do when the well’s rate falls below critical? Unload the well to a tank (on location or at the battery). Drop Soap Sticks in the wellbore. Shut the well in to build up wellbore and reservoir pressure. Install some new hardware: - Flow Intermitter - Velocity String - Plunger Lift - Wellsite Compression

14. INTEGRATED PRODUCTION SERVICES What should we do to make sure we implement the best solution? Gather accurate downhole information. Gather historical and current production data. Analyze the gathered information. Prepare a recommendation and source the required equipment. Implement the recommendations. Continually monitor the results and make adjustments when and where required.

15. INTEGRATED PRODUCTION SERVICES Changing field conditions. The lack of field support. The lack of engineering support. What stops us from staying optimized? The industry has never had the right piece of equipment that combines technology and field tested hardware that will adjust automatically to the changes that occur in every wells life.

16. INTEGRATED PRODUCTION SERVICES The Menex Philosophy –What would you do if you were an operator living at the well 24 hours per day 7 days a week with direct communication to all wellhead and flow line pressures, liquid and gas rates both historically and current. What is Wellhead Management from Day 1?

17. INTEGRATED PRODUCTION SERVICES Wellhead Reservoir Point of Sale Where is the best place to make decisions about optimization?

18. INTEGRATED PRODUCTION SERVICES Normal Suspension Increased Secondary and Primary Production Production/dayProduction/day Secondary Production Cumulative Production Extended Production Primary Production CRITICAL RATE Normal Decline Well Management from Day 1

19. INTEGRATED PRODUCTION SERVICES Flow the casing whenever possible!! How do we increase Primary Production? Eliminate dirty transitions.

20. INTEGRATED PRODUCTION SERVICES Flow the casing whenever possible!! How do we increase Secondary Production? Eliminate dirty transitions. React to downstream changes with little or no operator/engineering intervention.

21. INTEGRATED PRODUCTION SERVICES Flow the casing whenever possible!! How do we realize extended Production? Eliminate dirty transitions. React to downstream changes with little or no operator/engineering intervention. Add wellsite compression with plunger lift.

22. INTEGRATED PRODUCTION SERVICES Allows you to flow the casing whenever possible!! Why is the Menex technology better for your well? Eliminates dirty transitions. Reacts to downstream changes with little or no operator/engineering intervention. Controls plunger lift, casing flow and a wellsite compressor from the same control box.

23. INTEGRATED PRODUCTION SERVICES Utilizes variable setting control valves on the casing and tubing. How does the Menex Box make plunger lift more efficient? Calculates a new critical rate 10 times per second. Does not need an operator or engineer to tell it when to make changes. Optimizes each cycle to ensure that the plunger’s travel time is 270 meters per minute as it comes up the hole.

24. INTEGRATED PRODUCTION SERVICES Gets the liquid in the wellbore and near wellbore above the plunger prior to cycling. Pre-staging the Plunger! and Keeps the liquid above the plunger prior to cycling!

25. INTEGRATED PRODUCTION SERVICES PLUNGER LIFT SYSTEM FOR LIQUID LOADED GAS WELLS GAS OPTIMIZATION Uses reservoir pressure to expel liquids from the well and increase gas production

26. INTEGRATED PRODUCTION SERVICES PLUNGER LIFT SYSTEM FOR LIQUID LOADED GAS WELLS GAS OPTIMIZATION Uses reservoir pressure to expel liquids from the well and increase gas production

27. INTEGRATED PRODUCTION SERVICES Variable setting tubing and casing valves installed on a wellhead

28. INTEGRATED PRODUCTION SERVICES Menex control box installed on a wellsite separator building

29. INTEGRATED PRODUCTION SERVICES Menex installed with wellsite Compression

30. INTEGRATED PRODUCTION SERVICES Allows you to continuously maximize the wells production without operator intervention when the well needs it and not when the operator can get around to it. Why is the Menex technology better for your profits? Calculates and maintains a historical record of production rates that are directly transferable to the AEUB. (AGA 8) Combines every gas well control system that has ever been produced into one control package that will work on your well from Day 1 to Abandonment.

31. INTEGRATED PRODUCTION SERVICES Extended Production –Well production beyond normal zone suspension or abandonment –Well is currently still producing –2750 E3m3 (100,000 mcf) extended production as of November 30, 2001; $250,000 at $2.50 per mcf Why is the Menex technology better for your profits?

32. INTEGRATED PRODUCTION SERVICES Thank you for allowing me to present to you today!