Packers Plus NewsletterWinter 2016 Packers Plus Newsletter

In early October, we held Stand up for Safety events across our North American locations. I was able to attend the event in Houston and noted the high level of participation. I sincerely appreciate working as part of a group who genuinely care for each other. While it’s true that we must maintain an excellent safety record to be a sustainable world-

Liner hangers are used in oil and gas wells to anchor completion systems in the intermediate casing.

class company, it’s far more important, in my opinion, that we permeate a culture where every person ensures their own, and everyone else’s, safety.

The interaction at the Stand up for Safety event encouraged me to reflect on what I believe about safety. I always say, “The most important part of our job is to make sure that everyone goes home whole at the end of every work day.” But why do I say and believe that? Because we care about each other and we don’t want to see another person harmed in any way. My time to reflect increased my sensitivity to the fact that if we begin with the leadership skills and diligence required to create and maintain a superior safety culture, then we will develop the same skills in our workforce. This will contribute to operational excellence.

The Packers Plus Premium Liner Hanger is a new liner hanger developed primarily for cemented liner completions. It operates in conjunction with a specially designed running tool to set the packer and slips against the intermediate casing after cementing operations are complete.

This new-style hanging system can withstand differential pressures up to 10,000 psi, is API V3 qualified and has a large hanging load capability. Our Premium Liner Hanger includes several features to prevent the tool from setting prematurely, making sure the system reaches total depth. The

Message from the ExecutiveLeadership in safety requires honesty, dealing with difficult situations in a respectful way and taking personal responsibility for our own areas of weakness so we can affect positive change. Diligence in safety requires us to keep our mind on task and to do it the right way, every time. Never allowing complacency to creep in, or taking a shortcut. Imagine the possibilities if we apply these principles to everything we do! I’m proud to be a part of an organization with our safety record and I look forward to joining all of you in doing my part to keep all of us safe. Thank you for all of your continued support and effort!

Kevin Trahan,Chief Operating Officer

design of the hanger enables the liner to be run into the well at greater speeds and with higher circulation rates without damaging the packing element. Additional slips securing the hanger in the intermediate casing are included for improved liner stability. The contingency measures on the running tool also ensure that cementing operations can commence as planned.

This newly developed hanging system can also be used in open hole completions as well as extended reach and highly deviated wells.

Core ValuesOperational ExcellenceInnovationCustomer Intimacy

MissionWe deliver innovative high-value completion technology solutions that work (the first time).

Content:

Message from the Executive 1

Featured Technology 1

Corporate News 2

Canada Update 2

US Update 3

International Update 4

Feature Employees 4

Case Study A 5

Case Study B 6

Q&A 7

Featured Technology: Premium Liner Hanger

Premium Liner Hanger

Page 2 Packers Plus Newsletter

Regional Update – Canada

We are pleased to announce an outcome of 97% – a 1%

improvement from 2015!

“We’re not just dabbling in the cemented market. Our Premium

Liner Hanger sets the foundation for a line of products that will

lead to Packers Plus being one of the premier liner hanger

providers in the market.”- Travis Harris

Corporate News: Premium Liner Hanger Launch

Beginning in early September, Packers Plus’ Canada Safety, Health & Environment (SH&E) program was audited for two weeks, in accordance with the Certificate of Recognition (COR) guidelines. We are pleased to announce an outcome of 97% – a 1% improvement from 2015! This achievement places Packers Plus in the top 1% of the companies that are audited by COR.

“The SH&E management system is an evolutionary program that strives for continuous improvement in all our safety practices at Packers Plus,” says Neal Edillon, Canadian Safety, Health & Environment Manager.

“We attribute this achievement to our meticulous Work Safe program but also our employees’ commitment to

everyday safety. Each year, our districts improve and adjust to change and they should be proud of their efforts.”

The COR program is a proven method for employers to enhance their health and safety performance, create a culture of proactive workplace health and safety, and reduce the costs associated with incidents.

Despite these exceptional results, the Canada SH&E team has strategies in place to continuously improve and evolve practices as the industry changes.

Thank you to all employees for their support and dedication in the continuation of a solid safety culture at Packers Plus!

The central focus of the Packers Plus 2020 Vision is to deliver diversified completion solutions to our chosen markets. The upcoming commercial launch of our Premium Liner Hanger and QuickPORT™ IV sleeves will help achieve the Vision, increasing our market share in targeted North American areas.So far, these new products have gained momentum during the field trial stage for Packers Plus in the following ways:

• More than 10 successful runs with our Premium Liner Hanger in the Permian Basin.

• Several effective runs of the Premium Liner Hanger in the US Bakken region.

• An upcoming job which will be the first cemented well with exclusively Packers Plus components (liner hanger, sleeves, toe sleeve).

• Three cemented product line pre-launch customer events in Oklahoma City, Midland and Calgary.

“We’re not just dabbling in the cemented market. Our Premium Liner Hanger sets the foundation for a line of products that will

PACKERS PLUS

VISION UPDATE

lead to Packers Plus being one of the premier liner hanger providers in the market,” says Travis Harris, Product Line Manager – Cemented Systems. “Providing both single point and limited entry stimulation options also presents our customers with options in designing the optimal cemented system for their development.”

Together, their knowledge of the US customer base will broaden our scope as we move toward our 2020 Vision.

Regional Update – USNew US Sales Team Members

We are pleased to introduce new members to the Packers Plus family! Joining our US Sales team, they will market Packers Plus products and services in their respective regions, and provide training seminars and technical support to clients across the US. Together, their knowledge of the US customer base will broaden our scope as we move toward our 2020 Vision.

• Jay Young, Senior Sales Representative – Midland, TX. Jay joins our Midland office with 10 years of sales and operations experience in the Permian Basin area. His most recent position included new account development and account maintenance with local oil and gas operators.

• Allen Strider, Senior Sales Representative – Oklahoma City, OK. Allen has over 35 years of experience in the oil and gas industry. His diverse background includes both hands-on technical skills and knowledge, as well as managerial and sales experience for several of the largest oil and gas service and equipment providers in the US and worldwide.

• Dean White, Technical Sales Representative – Midland, TX. With experience in both sales and business development in the West Texas and Dallas areas, Dean will be targeting clients in the Permian Basin.

• Jim McGowin, US Sales Manager – Houston, TX. Jim has nearly 25 years in marketing and operations with various service companies in US and international locations. Jim is a professional engineer, who earned his degree in Petroleum Engineering from Mississippi State University.

• Blake Spellman, Senior Sales Representative – Denver, CO. Based in Denver, Blake has 13 years’ experience working for large service companies. Most recently, he was responsible for the business development of a large service line. Blake has a B.Sc. in Geology from the University of Wyoming.

• Travis Gardin, Senior Sales Representative – Houston, TX. Based in Houston, Travis’ experience includes technical sales and account management for large service companies where he focused on completion solutions. He

Page 3

holds a Bachelor of Business Administration (B.B.A.) in Business Management from Stephen F. Austin State University.

• Pat Higginson, Global Account Director – Houston, TX. Pat is a consummate sales and marketing professional with over 35 years of experience in global upstream operations and services, contracts management and strategy, sales, marketing, business development, negotiations, and relationship building. During his tenure at Schlumberger, Pat worked closely with Noble Energy and will maintain those relationships as the new Packers Plus representative for all Noble Energy accounts. Pat holds a Bachelor of Science (B.Sc.), Civil Engineering from the University of Florida and an MBA in Management and Operations from the University of New Orleans. He is an active volunteer in the community and currently chairs the Gulf Coast Section - Northside Study Group of the Society of Petroleum Engineers.

Dubai, UAE

HOUSTON, TX

MIDLAND, TXJay Young

Allen Strider

Travis GardinJim McGowinPat Higginson

Dean White

Blake SpellmanDENVER, CO

OKLAHOMA, OK

Page 4 Packers Plus Newsletter

Mike ChapmanSr. Field Operator, Casper

“Operational Excellence is the high standard of service we provide to our customers. We put our customers first by delivering not only the best products, but also great service and a positive attitude.”

Joel ConradTechnical Services Engineer, Dubai

“Throughout every department at Packers Plus, a culture has been established that focuses on Operational Excellence. By taking pride in our work, we are able to offer a premier level of service and technology that we can stand behind knowing that it is the best in the industry.”

Leanne ScottCorporate Legal Assistant, Calgary

“This is a great environment full of great people – there is never a dull moment! I am fortunate to work with a department with a diverse portfolio so that I’m always growing. Innovation is key in the Legal department.”

Employee Spotlight

“By taking pride in our work, we are able to offer a premier

level of service and technology that we can stand behind

knowing that it is the best in the industry.”

— Joel Conrad

Regional Update - InternationalPackers Plus recently worked with an operator in the MENA region to develop a customized completion system to successfully stimulate a high pressure/high temperature (HPHT) well in Oman. A testament to our operational excellence and customer service, initial production rates were approximately twice as high as the operator’s best well to date in this formation.

Due to the formation’s challenging conditions, the operator required a system

that would increase near wellbore conductivity and be robust enough to function through temperature fluctuations of more than 100˚F (55˚C) and working pressures of 15,000 psi (103 MPa).

Packers Plus worked on upgrading its StackFRAC® Titanium® XV system to meet their requirements. The engineering design, construction, QA/QC program, testing and procurement were accomplished in just over four months, producing custom tools

that were operational at 15,000 psi (103 MPa) and rated to 18,300 psi (126 MPa). Following a successful installation of the six-stage hybrid system, the first three stages were stimulated and the well was flowed back.

The resulting initial production rates from the ball-drop stages greatly surpassed expectations and prompted the operator to abandon the final three plug-and-perf stages, saving time and reducing costs.

Initial production rates were approximately twice as high as the operator’s best well to date

in this formation.

Page 5Packers Plus Newsletter

Retina Monitoring System Improves Certainty and Safety for Perforating and Flowback

Packers Plus collaborated with a service contractor to monitor millout operations following a plug-and perf stimulation in the Permian Basin. The ePLUS™ Retina monitoring system successfully confirmed plug milling operations, giving the operator greater confidence in decisions relating to downhole events.

In situations where the traditional response is ambiguous or absent, ePLUS Retina real-time information can provide operators with the information to make appropriate decisions to avoid delays on costly trial and error solutions.

ChallengeWell service operations are usually unseen. In most hydraulic fracturing jobs, operators correlate events to known pressure signatures, confirming the occurrence of specific subsurface events. In the case of ball-drop completions, such events would include a ball landing on seat and the port shifting open.

Some events are unrelated to pressure, such as during plug-and-perf operations. Confirming a perforation charge detonation is valuable for safety mitigation, since undetonated charges may fire unexpectedly.

For millouts, operators use a variety of indicators to determine that the mill is functioning, such as pressure, weight on the drill bit, depth and reactive torque.

SolutionThe Packers Plus ePLUS Retina monitoring system uses a proprietary array of sensors to collect and analyze signals from multiple locations on the wellsite. The portable monitoring system was quickly tied in among stimulation operations on site in 30 minutes.

ResultsBefore millout procedures began, Retina detected all detonations on all observed stages.

During flowback and millout, the system confirmed when the mill was actively milling and

indirectly verified that the fluid viscosity and circulation rate were sufficient to flush debris to the surface, without reliance on traditional indicators.In many millout operations, a worker continuously monitors the fluid returns to check for milled debris. This is done in the “red zone,” a high-pressure area near the well head. Using Retina, the timing of each full sweep of debris moving to surface was known, thereby minimizing personnel time in this hazardous area.

Retina has monitored over 60 operations and more than 1,050 stages. The system provides a real-time, independent source of information for both pressure and non-pressure events.

Case Study

The system provides a real-time, independent source of information for both pressure and non-pressure events.

ePLUS Retina real-time information can provide operators with the information to make appropriate decisions to avoid delays on costly trial and error solutions.

PermianBasin

COLORADO

NEW MEXICO

ARIZONA

ARKANSAS

LOUISIANA

MISSOURIKANSAS

TEXAS

MEXICO

OKLAHOMA

The Permian Basin in the western part of Texas and the southeastern part of New Mexico

All detonations in a perforation cluster occurring within 2 minutes, as captured by Retina (pressure data removed for clarity).

Retina monitoring of a full sweep of milled debris circulating to surface.

Permian Basin, Texas, USA

Page 6 Packers Plus Newsletter

StackFRAC HD-X Increases Stage Count for Extended Reach Lateral Wells

Operators are drilling extended reach laterals with higher stage counts as an option to maximize the recovery of hydrocarbons. This, however, introduces completion challenges, where producers are often restricted either by technical, cost or time limitations. In systems that require mechanical intervention such as plug-and-perf, longer laterals and more stages can increase the completion complexity and operational risk. Advances in the Packers Plus StackFRAC® system has increased the maximum number of stages that can be completed with this ball-drop stimulation method, providing an efficient and cost-effective option for high stage count wells.

ChallengeAn operator working in North Dakota’s Bakken formation had completed several wells with 35-stage ball-drop systems. The operator wanted to reach higher stage counts for their long laterals, while maintaining their stage spacing for effective reservoir coverage.

To achieve this goal, the system would require ball seat size increments smaller than the traditional 1/16-in. To manufacture ball seats with size increments that were smaller than this number, it

was necessary to consider the effects of ball seat erosion. If not properly accounted for, ball seat erosion can increase the risk of lost stages during pumping operations, causing balls to pass through to seats further downhole and leave planned treatment stages unstimulated.

SolutionThe Packers Plus StackFRAC HD-X high fracture intensity system was specifically designed for extended reach laterals. The operator ran the StackFRAC HD-X completion system (4.5-in.) for two of their open hole horizontal wells in Williams County, with lateral lengths between 9,650 and 9,700 ft. Both wells included non-standard ball seat sizes for internal stage-to-stage isolation, with a proprietary anti-erosion coating. The first well was completed with 49 stages and the second with 50 stages, with planned average stage spacings of 194 and 189 ft, respectively.

ResultsBoth the 49- and 50-stage systems were successfully installed and a 100% success rate was achieved for ball launch, ball landing on seat and sleeve shifting. All port activation events were confirmed with the Packers Plus ePLUS™ Retina monitoring system. The first well

was completed in 50 hours of pump time using 4.9 million lbs of proppant and 69,886 bbls of fluid, and the second well in 52 hours, using 5 million lbs of proppant and 73,600 bbls of fluid. Cumulative equivalent oil production from the 50-stage well was the highest among all the existing offset wells on the same lease after 4 months, with a total of 106,463 BOE.

Using a ball-drop completion system for both wells helped mitigate the operational risks that can be experienced with wireline and coiled tubing intervention. A single, continuous pumping operation for the completion program also saved the operator a significant amount of time compared to the plug-and-perf completion method. Up to 63 ball-drop stages can currently be completed with the StackFRAC HD-X system.

Packers Plus specializes in providing solutions for multi-stage completion systems and technically challenging applications in horizontal, vertical, multi-lateral and high pressure/high temperature wells. Well solutions are customized based on operator requirements and can be adapted based on changing industry demand.

Case Study

Using a ball-drop completion system for both wells helped

mitigate the operational risks that can be experienced with wireline

and coiled tubing intervention.

The first well was completed with 49 stages and the second with

50 stages, with planned average stage spacings of 194 and

189 ft, respectively.

MONTANA

WYOMING

NORTH DAKOTAMINNESOTA

MANITOBA

SASKATCHEWANALBERTA

SOUTH DAKOTA

BAKKEN

The Bakken Formation underlying parts of Montana, North Dakota, Saskatchewan and Manitoba.

Cumulative production of 50-stage StackFRAC HD-X well and offset wells on the same lease.

Bakken, North Dakota, USA

120,000 StackFRAC HD-X

Offset Wells

100,000

80,000

60,000

40,000

20,000

02 3 41

BOE

Month

Page 7Packers Plus Newsletter

Travis Harris is the Product Line Manager for Packers Plus Cemented Systems. He has 30 years’ experience in a variety of operational and management roles, with a focus on new product launches. He is currently developing a business strategy for Packers Plus’ innovative cemented systems that improve efficiency and save time and cost for operators worldwide. As the subject matter expert for this particular product line, Travis provides expertise and advice within the company and with customers.

How would you compare the use of cemented systems in the CAN, US and INT markets?

While the Canada and US markets are fairly similar, the international markets are different in both casing dimensions and pressure requirements.

What tools under the cemented product line are currently available commercially? In field trials?

The 7” X 4.5” 10K V3 275F Premium Liner Hanger will be commercial in early Q1 of 2017. The 15K V0 400F version will be in field trials by the end of the year. The 9-5/8” X 7” tool will begin field trial in late Q1 of 2017.

How do we leverage our success in open hole to break into the cemented market?

I’m not sure you can compare the open hole and cemented markets. Cemented Liner Hangers are their own standalone products. We can, however, tout our commitment to QA/QC both in our manufacturing process and in our operational capabilities, as well as leverage current customer relationships to help promote this new product line.

In such a well-established market, how will Packers Plus bring innovation to gain market share?

We need to market the features and benefits of the tool. With our 15K V0 tool, there are very few tools in this market, so we should have some preference, particularly in the MENA region.

Can you describe some of your broader tactics that you will apply to meet your 2020 goals?

Perfect 100% job execution is crucial, along with continued sales training. Continued marketing and exposure at upcoming events is also very important to our process.

Q&A with Travis Harris, Product Line Manager, Cemented Systems

“Perfect 100% job execution is crucial, along with continued sales training. Continued marketing and exposure at upcoming events is also very important to our process.”

How does multi-departmental collaboration contribute to the success of this new product line?

The Premium Liner Hanger can be run with all types of our cemented sleeves, open hole sleeves, toe sleeves, as well as multi-lateral systems. This really gives us an advantage to sell complete systems to the customer. It also crosses multiple product lines so it gives the tool a lot of applications as well as exposure in the cemented market.

What upcoming key focus areas will support launching this product line?

We will need to continue to focus on the US and Canadian markets. In the MENA market, we will target specific clients where we believe we will have the most success.

Travis Harris,Product Line Manager

QuickFRAC system with Cemented QuickPORT IV Sleeves