Patented Completion Technology

Geoslicing©

Enhanced Oil and Gas Recovery Technology

Advanced Geoslicing©

Enhanced Oil and Gas Recovery Technology

“An Industry Disruptive Technology,” according to the National Research Council of Canada

“…a technology capable of recovering an additional 1 BCF of Gas in New York State,” NYSERTA

• “Industry disruptive solution” for the recovery of oil & gas

• Patented technology, environmentally-friendly technology for

Eco-Safe, Enhanced Oil Recovery, 3rd Generation Tool

• Uses an eco-friendly high-pressure abrasive water-sand

mixture to slice the earth

• Patented tool slices 1m to 6m+ feet through the casing into

oil/gas formation, 2nd Generation Tool Shown in Photo

• Creates an effective well-bore of 2m-12m versus 125mm

• Provides a radically expanded surface area of up to 1000%

greater for Oil and Gas to Flow thereby improving flows

What is Geoslicing?

Geoslicing© 5,000 psi/345 bar Gen-1 tool in action

After a one minute pre-treatment pressure test of Gen-1 Geoslicing© Technology

a 15-foot hole has been sliced into the ground.

What is Geoslicing?• An Advanced Oil and Gas Recovery Technology

• Improves Oil Recovery Rates 300% - 500%

• Improves Gas Recovery Rates 800% - 1600%

• Recovers Oil/Gas Faster and more Completely from formation

• Enhances flows from suitable existing, new and capped wells

• Improves

Internal Rate of Returns, Net Present Value and Well Value

• Improves IRR by increasing flow rates

• Improves NPV by accessing more oil/gas from the formation

• Improves Well Value - extended life & expanded reserves accessed

Benefits?

How does a reservoir become damaged?

Estimating Borehole Damage

• Drilling wells rocks undergo high stresses induced by the weight of the overburden

• A well is an excavation into rock that follows the laws of hydrodynamics

• Rocks at a depth of 3 to 5000 feet undergo stresses as high as 3500 – 5000 psi at the well-

bore wall

• Tectonic stresses can induce additional and usually greater stresses

• Permeability of rocks under the above stresses can be significantly decreased and become

near zero which decreases flows

• Traditional completion methods neglect these forces/factors and therefore the well never

reaches its full potential

• s

Normal Stress Regime

Formations sustain two types of mechanical stress:

vertical stress horizontal stress

These stresses act on the formation in the vectors as indicated.

Damage Caused By Drilling

The act of drilling a bore-hole re-distributes mechanical stress.

Radial and tangent stresses arise.

Pay zone permeability can decrease by 5 to 10 times due to the effect of these stresses alone.

The standard gun perforator is lowered into the hole.

Damage from Completion

During a conventional perforation, pay zone is subjected to high temperature and pressure shock.

Gun debris is deposited on the inner surface of the entry “carrot” and can further damage the formation.

Following conventional perforation, the zone of pressure re-distribution is expanded.

Summary of Wellbore Damage

mechanical stress disrupted

invasion of drilling fluid

accumulated formation fines

invasion of cement, and

gun debris.

Pressure Forms Around the Wellbore

Drilling and conventional completion technologies cause a high pressure area to form around the wellbore.

Result of Perforation

Within the pressurized area around the wellbore (in blue),

formation permeability is reduced by 500 to 1000 percent.

Permeability Damage at Bore

Zone of Repair Above 1 away from Bore

Lowest Permeability Highest Permeability

Result of Fracturing

Fracturing technologies impact deeper into the formation, but cannot repair the damaged near-wellbore zone (blue).

Lowest Permeability Highest Permeability

Permeability Damage Remains at Bore

Zone of Repair away from Bore

How does Geoslicing© Repair Wellbore Damage?• Geoslicing © cuts through the compacted and

low permeable near-wellbore zone• Does not burn, scar, or “cook” the formation• In carbonates, dislodges clay particles and

fines• In sandstones, reduces sand mobility problems• In deep gas sands, relieves overpressure

damage from mud weight systems

The Geoslicing© Process

The GeoSlicing tool is lowered down to the target formation.

The abrasive slurry is aimed into the target formation at the correct pre-calculated vector.

The tool is raised when the slot is complete to begin a new slotting procedure.

In this manner, the entire target interval is treated.

• Slotting treatment pressure is < or = to formation pressure

• Slotting transfers the zone of stress to the tips of the slots

• This enhances productivity

• Porosity & permeability are increased in the slotted area of the near well-bore zone

• Slotting equalizes pressure differential between pay zone and well-bore (pressure drop is reduced within interval)

How Geoslicing© Repairs

Slotting frees near well-bore zone from disruptive effects of mechanical stress.

The highly stressed area is moved and concentrated at the tips of the slots.

The screening effect of these stresses around well-bore is eliminated.

Formation fluids can now flow more readily from pay zone to the well-bore.

Geoslicing© Re-Distributes Stress

Mechanical stress is concentrated at the tips of the slots.

An area of greater permeability forms around the slotted wellbore.

1.15

1.25

2.50

3.75

5.000.1 0.3 0.5 0.7

0.1 0.3 0.6 0.8 1.0

Result of Geoslicing©

Formation permeability at the well bore is increased by several orders of magnitude.

Geoslicing

Highest Permeability at Well Bore

Lowest Permeability Highest Permeability

Comparison of Results

High Permeability at Well Bore

is the Objectiveto

Enhance Oil Recovery

Geoslicing

Geoslicing© vs. Perforation

Gen 2 Tool

Gen 3 Tool 6.5 yd

Gen 1 Tool

6.5

Benefits of Geoslicing©

1. Re-distributes stresses away from near-wellbore zone

2. Porosity increases >> 4-5x; Permeability >> 15x

3. Drainage volume increases up to 24.2x greater than borehole

4. Very deep penetration (compared to perforation)> 3-6x

5. Eliminates screenouts, lamination, skin effects (all barriers to oil flow)

6. Creates vertical permeability that does not normally exist in nature (reaches full thickness through interbedding / layers)

7. Has a longer lasting effect than any other technology due to larger surface areas and structures which stay open

8. “Managed balanced” drilling – not overbalanced9. So powerful it can cut multiple casings & deep rock10. Does not crack casing cement / keeps hydraulic integrity11. The only technology that actually excavates rock12. Accurate & controllable connection / communication with

production zones and with surface13. Helps direct a hydraulic fracture (even near water)14. Ecologically safe / environmentally friendly15. Follow-up intensification methods also show increased

results due to huge drainage surface (i.e. acidization, hydro-fracturing, acoustics, etc.)

Benefits of Geoslicing©

(continued)

The Effect of Geoslicing©

Benefits (Continued)16. Softening of problems with developing heavy

oil layers by providing greater openings for flows

17. Easing of problems with opening wells with two or more strings of the casing

18. Allows for recompletion of zones with sub-adequate production in comparison to adjacent zones

19. Reliable completion of thin-laminated production zones

Geoslicing©

• Standard perforation (M is permeability) M2>>M1

• After boring a well, tangential compressive stresses arise in the near-wellbore zone thereby decreasing the rock permeability

M2 Permeability

M1

Well

M1<<M2

Near-Well

Zone

Geoslicing©

Combined with Chemical Treatment• Along the well Axis in opposing directions a slice is

cut the entire depth of the production layer (or for such depths as desired)

• A minimum depth of penetration into the zone on either side of the well-bore of 7 to 10 well diameters is required

Wellbore Geoslice

GeoSlice

The Effect of Geoslicing©

• The GeoSlice© transforms the compressive tangential stresses into extended linear ones

M2 Permeability GeoSlice©

M1

Well

Near-Well

M2>>M1 Zone

Geoslice©

The Effect of Geoslicing©

Enhances Reservoir Properties• The GeoSlice releases the near-wellbore zone stress and provides

increasing rock permeability - dramatically enhances the reservoir properties and flows

0.7 0.5 0.3 0.1 0.1 0.3 0.5 0.7

1.252.53.755.0

5.03.752.51.25

1.0 1.05

1.05 1.0

1.0 1.05

1.05 1.0

.o.2 ,3 .6 .8 1.0

The Effect of Geoslicing©

Comparison of Geoslicing© to other completion

methodologies• GeoSlicing when compared to other completion methods

dramatically enhances the depth of the production layer opening and the drainage surface area

The Effect of Geoslicing©

Application• The product layer consists of carbonate, terrigen or

crystalline rocks• The productive layer interval is fastened with the casing

column for 5” to 12” (120 to 320 mm) by the diameter, independent of the well depth

• Geoslicing has been tested on production layers up to depths of 20,000 ft (6 km) with low and high formation pressures and with the bottom hole temperatures up to 140o C

• GeoSlicing can be applied after drilling, during production, or after workover repairs

The Effect of Geoslicing©

Benefits• The efficiencies of the technology cutting processes does not

change the hydrodynamics of the structure nor leave excess water in the formation

• The method is effective in complex conditions and can be applied when there are various drilling complications: with enormous drilling idle times/closed wells, multi-string casings, abnormal high pressures, etc.

• The method can dramatically increase oil or gas recovery involving neighboring layers with various permeability

• The effects of Geoslicing persist for dramatically long times – years, while other methods produce only short term effects

The Effect of Geoslicing©

Benefits• Geoslicing increase the near-wellbore zone rock

permeability by changing the tangential stress values and the direction of their variation

• Disappearance of the ‘skin’ effect

• Increases the production layer utilization by producing a continuous ‘window’ rather than a punched hole perforation

• Drastically increases the production layer opening area and duration of flows

• Makes low-quality reservoir rock profitable by increasing production compared to standard well casing flows

The Effect of Geoslicing©

Benefits• Softening of problems with developing heavy oil layers by

providing greater openings for flows

• Easing of problems with opening wells with two or more strings of the casing

• Allows for recompletion of zones with sub-adequate production in comparison to adjacent zones

• Reliable completion of thin-laminated production zones

Field Results of Geoslicing©

Advanced Oil and Gas Retrieval Technology

Example A – Gas Zone Rejuvenation

Background• Name: Kinnert 1. Drilled in 1976; dead in 2000 • API #15-095-10063-0001 S14-T30S-R7W KansasProblem Statement• Operator researched how to boost output, but could not find an

economical well stimulation methodSolution• Gen-1 tool to stimulate depleted gas zone in March 2003Implementation Time• 1 Day, excluding planning Costs• $35,000, because GeoSlicing© technology was in early stage of

development, only 3rd party costs are included• Win/Win for operator as no cash outlay, just rewards

Example A – Gas Zone Rejuvenation

Initial Production after GeoSlicing©• 81 mcf/d compared to 101 mcf/d in 1976Payout• 5.1 months (100% working interest)• 10,500 mcf @ $3.85 (inc. royalties & expenses)Total Gas Production• 98,623 mcf (March 2003 to June 2008 – still producing

December 2010)• Daily Production today = 31 mcf/dTotal Revenue• $592,000 (98,623 mcf X ~$6/mcf) (inc. royalties & expenses) to

June 2008 last data available

Example A - Historical Production

The decline rate is shallower than during original production.

Approximately 50% decline over 9 years.

Typical Production Curve after Geoslicing©

This example from Kansas, 2003

Example B – Oil Zone Rejuvenation

Background• Name: Moran 1. Drilled in 1969; dead in 2000 • API #15-165-20227 S30-T19S-R20W KansasProblem Statement• Operator researched how to boost output, but could not find an

economical well stimulation methodSolution• Gen-1 tool to stimulate depleted oil zone in April 2003Implementation Time• 1 Day, excluding planning Costs• $35,000, because GeoSlicing© technology was in early stage of

development, only 3rd party costs are included• Win/Win for operator as no cash outlay, just rewards

Example B – Oil Zone Rejuvenation

Initial Production After GeoSlicing©• 8 bopd Payout• 7.1 months (100% working interest)• 1,200 bbls @ $43.57 (inc. royalties & expenses)Total Oil Production• 7,392 bbls (March 2003 to June 2010)• Daily Production today = 8 bopdTotal Revenue• $571,560 (10,392 bbls X ~$55.00/bbl) (inc. royalties &

expenses)

Example B - Historical Production

The zone was very depleted when GeoSliced© in 2003.

The decline rate is relatively flat.

Example C – Halting the Grim Reaper

Background• Drilled in 1986; completed lower (high porosity) zone 7595’ – 7644’ • 1986 - 1990 Total production = 379,790 mcf from lower zone • Dead in 1990; well to be P&A’ed• API 04-011-20373 S18-T14N-R1E MDB&M Colusa County, CAProblem Statement• Well was to be P&A’ed and our challenge was to show our technology

would work on low porosity zone, when other technologies could notSolution• Used Generation 2 GeoSlicing© tool in June 2005• GeoSliced© new zone 7148’ – 7163’ Implementation Time• 1 day, not including planning Costs• $70,000 (Workover costs only – PG&E tie-in costs not included)

Initial Production After GeoSlicing©• 650 mcf/d Payout• 15 days• 7,000 mcf x $9.66 (inc. royalties & expenses)Total Gas Production• 176,165 mcf (Sept 2005 to June 2008 – Still Producing)• Daily Production today = ~110 mcf/dTotal Revenue• $1,233,150 (176,165 mcf x $7.00/mcf) (inc. royalties &

expenses)

Example C – Halting the Grim Reaper

Grizzlies 1 – Comparative Production

Again, the decline rate due to GeoSlicing© is much shallower.

Example D – Raising the Dead

Background• Name: Curry 1, Drilled: 1989• API 31-013-212211 Panama Quad, Chautauqua County,

Blockville, NYProblem Statement• Revive a heavily depleted barely-/non-producing Medina well

utilizing GeoSlicing© and fracturingSolution• Used Generation 3 GeoSlicing© tool to stimulate depleted gas

zone in Dec 2003, 4030’ – 4105’

Implementation Time• 2 Days; 1 GeoSlicing©, 1 day Fracturing excluding planning Costs• $115,000 SDF cost only – location and R & D costs NIC, only 3rd

party costs are included

Initial Production After GeoSlicing©• 130 mcf/d compared to 2 mcf/d for 15 years and

0 mcf/d in 2008 Payout• 287 days (100% interest)• 28,000 mcf x $4.00 (inc. royalties & expenses)Total Gas Production• 20,150 mcf (1989 to 2010) • Daily Production today = ~100 mcf/dTotal Revenue• Revenues during first 7 months exceeded those of preceding 18

years ($319,375 in revenues in 18 months now)

Example D – Raising the Dead

Curry 1 – Raising the DeadProduction Rates

The increase after GeoSlicing© is over 12000%!

20 15 10 5 0 5 10

20

40

60

80

100

120

140

Curry 1

MCF/Day

Years

MC

F/D

Example E – Creating Star Economic PerformersWhirlpool rock (blue wells) generally surpasses Medina rock (red wells) in both gas production and gas resources, gas production results for Curry 1 (completed by GeoSlicing© in the Medina) are high, even in comparison to Whirlpool completions, considering Curry 1 draws from average gas resources.

What Equipment is used in

Geoslicing© ?

Surface Equipment

1. Wellhead

2. Pulp-cleaning filter

3. Manifold unit

4. Pump set

5. Sand-mixing set 

6. Tank.

Surface EquipmentProvided by Schlumberger

Sand Mixing Set(Blender)

Tank

Wellhead

Surface EquipmentProvided by Schlumberger

Pump Set

Shaker

Half TankWellhead

Water Truck

BOP

Geoslicing© Oil Platform Support Equipment

Abu Dhabi

Advanced

Geoslicing© ToolGen-1

1. Ball trapper

2. Upper Seal

3. Compensator

4. Compensator

5. Pusher

6. Perforator

7. Lower Seal

8. Nozzles

9. Circulation Ball

10. Bolts

11. Engine

Scientific Method of Geoslicing©

rP As Nozzle Diameter Increases

Rate (bbls/min)

6

5

4

3

2

1

0100 200 300 400

Pressure (atm)

Red = 3mm

Green = 4.5mm

Blue = 6mm

Calculating Working Pressure

Where:

D1 is the ID of the pusher (mms);

D2 is the OD of the tubing (mms);

rPN is the pressure of the slurry through the nozzles

(MPa)(variable); and 

rFS is the compressive force of the engine (Newtons)

(variable).

rPR = [(D12 x rPN) – rFS] / (D2

2 – D12)

Optimizing Working Pressure

I

II

III

6

5

4

3

2

1

0

9

8

7

252015105

rPN,

MPa

rPR, MPa

Economic Impact of Geoslicing©

Curry 1 – Economic Impact

Before GeoSlicing© $0 - 8/day for 15 years after $400 per day!

20 15 10 5 0 5 10

20

40

60

80

100

120

140

Curry 1

MCF/Day

Years

MC

F/D

Thank you for your interest!

Please feel free to contact us: William Azzalino, Managing Director

T: (949) 903-4033E: GeoSlicing@Gmail.com