Provider of Oil Production and Reserve Recovery Increase
Company Presentation June 2008 Strictly Private &
Confidential
Slide 2
June 2008 - 2- Greenzyme releases oil through changing the
surface tension between oil and water, it is environmentally
friendly and has proven its ability to stimulate oil production
without any damage to the formation Access to Greenzyme technology
is based on a cooperative agreement with inventor and IP owner
Philip Lau and his company Apollo Separation Technology Inc, based
in Houston, Texas, USA. The agreement provides for exclusive rights
to Greenzyme application onshore and offshore UK, Norway, Denmark
and Sweden, and from a non-exclusive basis gain exclusive rights
for countries entered into (*) Wellco Oil - Executive Summary
*except China, Venezuela, Indonesia and North America Entered into
agreements with a variety of oil companies with the intention to
identify, plan and execute well stimulation going forward. Projects
to be conducted at a no-cure no-pay risk sharing basis, where
Wellco recovers costs based on achieved production increase, and
where client and Wellco shares the resulting value enhancement from
the well stimulation First well stimulation campaign agreed to
start early Q2 2008 Infinite demand expected for effective
stimulation and environmental services worldwide in light of
maturing and declining oil fields, falling reserves and increasing
public attention on environmental issues Very positive results
achieved from Greenzyme well stimulation operations in China,
Venezuela and Indonesia, with substantial and sustained production
increases Water flooding core tests with Greenzyme has shown an oil
releasing capability of more than 10 percent points of remaining
oil in place (20-30 % share) Established year end 2005 with start
up capital in place March 2006 The objective is to become an EOR
and environmental focused oil Service & E&P company, based
on access to the Greenzyme stimulation technology Strategic focus
for 2008 is on pursuing and conducting well & reservoir
stimulation pilots and build operational and commercial experience
Experienced oil&gas resources involved in buildng and
developing company Access to unique stimulation technology Large
global market and value creation potential Oil well stimulation
campaigns in 2008 Start-up oil service company INTRODUCTION
Slide 3
June 2008 - 3- Strategic Focus for 2008 Build documentation on
EOR potential and prepare commercialisation of the Greenzyme
technology Conduct pilot campaign on onshore oil wells in
reservoirs with significant residual oil and near well bore damage
Build organisation in Norway to cope with increasing number of
countries
Slide 4
June 2008 - 4- Key Milestones in Wellcos development
Incorporation By experienced Norwegian Entrepreneurs in Nov 05 On
the basis of unique relations to inventor of Greenzyme, Mr. Philip
Lau Exclusivity Agreement with Apollo Cooperative Agreement with
Apollo in April 06 Renewed and strengthened cooperation in Oct 07
Capitalisation & Organization Strong backing from Norwegian
Private Investors PetroAdvisor, an Oil&Gas Advisory Firm within
the R.S. Platou (World Leading Shipbroker Firm) family of companies
involved in managing the company Leading Norwegian reservoir /
sub-surface resources involved Headquarter established in Oslo,
Norway Technology documentation & verification Collected
documentation from E&P companies applying technology Executed
independent lab-tests with positive results, Aug-Dec 06 Achieved
certificate for North Sea / Offshore application, April 07 Well
stimulation agreements & operations Entered into LOIs with
independent E&Ps and NOCs for well stimulation projects in
Europe, Middle East, South-America and Asia Agreement Perenco to
start well pilot in Turkey in April 2008 JV agreement signed with
bill$ Bahrain company for cooperation throughout the Middle East
Final negotiation ongoing with Babco to run pilot onshore Bahrain
in April-May 2008 Final negotiation ongoing with ONGC to run pilot
onshore India INTRODUCTION
Slide 5
June 2008 - 5- Our Value Proposition for Well Stimulation Our
objective is to : -Substantially recover crude oil production from
declining / low producing oil wells with near well bore damage
-Avoid future reduction in oil production Our main commercial model
: Execute no-cure no-pay risk-sharing well stimulation projects
with client, typically: Wellco provides on site at our expense
Greenzyme and supervisors to facilitate the operation Client
carries the costs of the well stimulation operation Wellco achieves
cost recovery on the basis of increased oil production recovery
(increase) Client and Wellco shares the value of the resulting oil
production recovery (increase) from the well stimulation operation
A risk-sharing partnership INTRODUCTION Substantial Value
Potential* *) Example: Reported results from Wei Zhou Field well
stimulation, CNOOC, China
Slide 6
June 2008 - 6- Organizational Structure BD& Commercial Well
Stimulation Einar F. Semb Technology & Operations Well
Stimulation Hans Petter Hjermstad INTRODUCTION Accounting &
Admin Stein Lberg (Advice Consulting Group) Bus Dev. Manager Tim
Nettleship Middle East CFO & acting CEO Ola Krohn-Fagervoll
Executive Board : Magne Sveen, Chairman & EVP John Hestenes
Hansen (founder) Tom A. Thorsen (founder) Einar F. Semb Legal
Trygve Gravdal (Rder) Technology & Operations Apollo Liasion
Bert Purugganan PetroAdvisor Resources Ivar Haaland Vice President
BD Ole Fredrik Ekern Environmental Projects TBN
Slide 7
June 2008 - 7- Wellco Oil Shareholder Structure
Slide 8
June 2008 - 8- Key Resources Involved Magne Sveen Chairman
& EVP PetroAdvisor; Partner. Norwegian Air Shuttle ASA; Deputy
CEO. Concordia BV; Executive Director. A.T. Kearney Mgmt
Consultants (5 years). Saga Petroleum (5 years). Norwegian Export
Council & BP Exploration, London. Education: Visiting Scholar,
Stanford University (USA), MBA-Finance, Univ. of Wisconsin (USA),
Master of Bus Mgmt, Norwegian School of Mgmt Ola Krohn-Fagervoll
Acting CEO PetroAdvisor; Senior Partner. First Securities ASA;
Corporate Finance, Saga Petroleum (16 years); Commercial Manager
with extensive experience in complex multi-company negotiations.
Exxon, Texas; Engineer. Education: Msc in Engineering, Norwegian
Institute of Technology (NTH) Einar F. Semb Vice President Business
Development & Commercial Schlumberger Oil Field Services;
Senior Mgmt, Management and Engineer positions in operations
worldwide (1972-1982 & 1998-present). GeoQvest; COO worldwide
(3 years). GECO; VP Software Engineering and Support (4 years).
Board member in various oil service companies. Education: Various
Executive Mgmt Programs at IMD, LBS and INSEAD. BSc in Mechanical
Engineering, Lieutenant in Norwegian Marines Special Forces Unit.
Hans Petter Hjermstad Manager Operations Dewpoint AS; Founder and
Managing Director. Saga Petroleum ASA (9 years); Section Leader
& Senior Advisor, Production Technology. READ Petroleum
Engineering Services (5 years); Founder. Norsk Hydro Research
Center (6 years); Chief Engineer. Education: Msc in Mechanical
Engineering and Msc in Environmental Technology, Norwegian
Institute of Technology (NTH) Ole Fredrik Ekern Vice President BD
Cumulus Energy Consultants; Founder and Managing Director. PGS
Geophysical; Vice President Business Development Emerging Markets.
The World Bank; Petroleum Specialist. PGS Reservoir Consultants;
General Director. PGS Nopec AS; Technical Director. Saga Petroleum
(12 years) ; Senior Business Advisor, Senor Manager Exploration
& Senior Geologist. Education: MBA, NSM (BI), Msc in Mechanical
Egineering, Norwegian Institute of Technology (NTH)
INTRODUCTION
Slide 9
June 2008 - 9- Stimulation with Greenzyme is an EOR method
where a genetically engineered charged protein is introduced into
the oil bearing geological reservoir. The protein is non-living and
will not replicate. Due to the charge it is efficiently transported
in the water phase EOR with Greenzyme is different from microbial
enhanced oil recovery (MEOR) where living microbes are used. MEOR
is a tertiary recovery process in which specialised microbes,
calculated inorganic nutrients, and oxygen are used Greenzyme is
effective over a large temperature range (35 200 o C) whereas MEOR
has a significantly smaller temperature range Like for MEOR,
Greenzyme will only work where there is a water phase present
Enhanced Oil Recovery by Bio-technology
Slide 10
June 2008 - 10- Why Greenzyme has proven to deliver positive
results in well stimulation operations As a biological catalyst
agent, Greenzyme seems to have a unique ability to release
hydrocarbon compounds from the surfaces of any solids by lowering
the interfacial tension between water and oil Furthermore, the
effect of the stimulation is long lasting since the Greenzymes
presence on the rock surface prevent any further deposition Lab
analysis and field tests prove that when Greenzyme as a dilute
water suspension, is pumped into an oil-well, it sets free oil,
asphaltene, wax and breaks stable water-oil emulsion build-ups near
the well By removal of the formation damage (reduce skin), the oil
production rates is documented to be greatly enhanced and
sustained
Slide 11
June 2008 - 11- Greenzyme will not introduce any damage to the
formation Injectivity tests : From a Core flooding experiment at
Core Laboratories, Aberdeen: TECHNOLOGY PLATFORM Unchanged
Permeability
Slide 12
June 2008 - 12- Background of the Greenzyme Technology
TECHNOLOGY A Brief History: Invented by Mr. Philip Lau, Ph.D in
Chemical Engineering. Former Chemical Engineer with Dow Chemical
Company, USA. Responsible for 12 commercial patents Invented in the
early 1990s. Initial use was to aid in the clean-up of oily sludge
sites and storage tanks in the US market Since 1999 been applied in
well-stimulation operations in China, Venezuela and Indonesia His
company Apollo Separation Technology Inc. in Houston, Texas holds
the IP rights to Greenzyme with the trademark Apollo Greenzyme
Slide 13
June 2008 - 13- Cooperative Agreement with Apollo Entered into
agreement with Apollo, April 2006 Wellco Oil holds rights to use,
sell and distribute Greenzyme (GZM) on- and offshore in the UK,
Norway, Denmark and the rest of Scandinavia Wellco Oil also holds
the right to claim exclusivity to new countries entered into (*)
The agreement is valid for a period of 5 years with automatic 5
years renewal Renewal of agreement is dependent on fulfillment of
minimum purchase volumes and satisfactory commercial progress and
results Apollo Separation Technology Inc / Philip Lau Wellco Oil AS
(*) Except : China, Indonesia, Venezuela and North-America
INTRODUCTION
Slide 14
June 2008 - 14- Oil Stimulation Services in High Demand
Increasing number of mature & tail-end fields worldwide Limited
success in discovering new large oil fields E&P companies
experiencing declining reserve replacement ratios 400-500 tail end
fields in the North Sea alone In order to reverse the production
decline and increase its reserve base: the industries focus has
shifted towards increased oil recovery from existing fields
Slide 15
June 2008 - 15- Improved Oil Recovery (IOR) through water
injection, gas injection and a combination of the two (WAG) is
currently state of art in most oil regions of the world Advances in
seismic acquisition and processing, drilling techniques and
intelligent completions have further contributed to improved
recovery of oil as well as accelerated production However,
according to the Norwegian Petroleum Directorate, methods to
mobilize the residual oil (i.e. the oil left in the rock pores)
after the above measures are currently inefficient and that further
Enhanced Oil Recovery efforts are needed The Industry is looking
for EOR technologies of a game changing character
Slide 16
June 2008 - 16- The technology promises substantial value
enhancement for matured oil wells* Experience from China: 300 % oil
production increase from shut down well, production rose from 35 to
140 bbls/day. Increased production sustained over a 6 months period
(Young 8-52, Shengli Onshore Oilfield) Oil production increase of
more than 50 % on well producing more than 300 bbls/day. Increased
production sustained over a period of 2-3 years (Wei Zhou 11-4-3A,
Beibuwan Offshore Oilfield Experience from Venezuela: Oil
production increased to 100300 bbls/day from wells originally
producing 1050 bbls/day. The increased production level was in some
instances sustained over a 6 months period Experience from
Indonesia: An average of 93 % increased cumulative oil production
has been reported for the 5 pilot wells in a EOR project in the
Central Sumatra basin. The Greenzyme stimulation has shown to stay
active for more than 9 months. *) Based on communications and
available reports provided by Apollo Separation Technology Inc and
RadEx Technology AS.
Slide 17
June 2008 - 17- Positive experience from well stimulation
conducted in China Wei Zhou 11-4-A3 Young 8-52 Shengli Onshore
Oilfield Type of crude: Parafinic 16.8 o API Permeability: 1 mD
Porosity: 29.7 % Production increase: from 35 to 140 bbls/day and
sustained over 6 months Wei Zhou 11-4-A3 CNOOC Beibuwan Offshore
Oilfield Type of crude: 19 o API 20 scf/stb Permeability: 500-1400
mD Porosity: 20-29 % Oil saturation: 77-84 % Production increase:
from 300 to 450-500 bbls/day and sustained over 2-3 years
TECHNOLOGY
Slide 18
June 2008 - 18- Oil production increased by 50% from a well
stimulation conducted by CNPC in China 2003 - 05 The injection of
Greenzyme reduced near well bore damages and generally recovered
the oil flow / oil production from the well. The flowing bottom
hole pressure increased from 23.3 to 65.7 bar after stimulation
TECHNOLOGY
Slide 19
June 2008 - 19- Positive experience from well stimulation
operations conducted in Venezuela Source: Report from 2001, Apollo
Separation Technology Inc. Houston, USA TECHNOLOGY
Slide 20
June 2008 - 20- Positive experience from EOR Pilot Project in
the Central Sumatra Basin, Indonesia The 5 pilot wells gave on
average 93 % gain in the oil production after stimulation with
Greenzyme. The water cut was basically unchanged The effect of the
stimulation lasted for more than 9 months Well 4 TECHNOLOGY
Slide 21
June 2008 - 21- Core flooding lab-tests conducted in 2005 &
2006 indicates substantial EOR potential 81.0 37.2 34.2 30.2 26.8 0
10 20 30 40 50 60 70 80 90 InitialPost water floodPost 3 % GZPost 5
% GZPost 7 % GZ Oil satuaration (% of PV) Core: Berea 427 mD (air)
20.6 % porosity S owr = 37.2 % Fluids: 20 API crude 0.933 g/cc
syntetic brine (30.000 mg/l) Conditions: 25 o C 70 bar pressure PTS
Laboratories, Houston, Texas, USA Greenzyme FLOOD 28 % of the
residual oil after water flooding was mobilized by Greenzyme
injection. TECHNOLOGY
Slide 22
June 2008 - 22- Conditions: 17.1 API crude 0.952 g/cc 14.5 w-%
asphaltenes 25 o C 70 bar pressure 5 vol-% Greenzyme solution
Conclusion The enhanced recovery obtained in earlier Greenzyme lab
floods are repeated No significant difference between the Greenzyme
production batches was experienced Core flooding lab-tests
conducted in 2005 & 2006 indicates substantial EOR potential
(cont.) TECHNOLOGY
Slide 23
June 2008 - 23- Core flooding lab-tests conducted in 2005 &
2006 indicates substantial EOR potential (cont.) TECHNOLOGY
Slide 24
June 2008 - 24- GREENZYME FLOOD SUMMARY Simulated Reservoir
Stress: 1000 psi Test Temperature 122.0 o F TECHNOLOGY
Slide 25
June 2008 - 25- GREENZYME FLOOD SUMMARY Simulated Reservoir
Stress: 1000 psi Test Temperature 122.0 o F TECHNOLOGY
Slide 26
June 2008 - 26- Core flooding bySinopec Southern Exploration
& Production Company, China confirms the EOR potential 1
Additional oil recovery after 1 PV of Greenzyme 2 Additional oil
recovery after several PVs of Greenzyme Source: Sinopec Nan Ning
branch: Oil displacement experimental study at Bai Se oil field,
May 26 - 2005 TECHNOLOGY
Slide 27
June 2008 - 27- TECHNOLOGY The wettability of the reservoir
rock is important for the oil recovery in water floods The contact
angle between oil and water in contact with the rock surface is a
measure of the wettability Lab tests show that Greenzyme improves
the contact between water and the rock surface and displaces oil
clinging to the surface Greenzyme changes the wettabiliy of the
reservoir rock
Slide 28
June 2008 - 28- TECHNOLOGY Greenzyme reduces the interfacial
tension between oil and water The capillary pressure will determine
if water can enter a pore and displace the oil The capillary
pressure is proportinal to the interfacial tension (IFT) Greenzyme
reduces the interfacial tension The IFT will stay low as Greenzyme
is dilluting in the formation water Sinopec: IFT between GZM and
Lun 16 oil @ 50 o C
Slide 29
June 2008 - 29- TECHNOLOGY Oil releasing capability of
Greenzyme The oil releasing capability of Greenzyme has been
measured in lab tests during imbibition of oil saturated cores
Slide 30
June 2008 - 30- OPERATIONS Safety Data Sheet
Slide 31
Contact us: Wellco Oil AS c/o PetroAdvisor/Platou Shipbrokers
P.O. Box 1604, Vika 0119 Oslo - Norway Phone 0047 - 23 11 28 84 Fax
0047 - 23 11 58 28 Email [email protected]@wellcooil.com
Provider of Oil Production and Reserve Recovery Increase