Overview of Triple Charge System

Leveraging the Triple Charge Ballistics System, Fracing and Beyond

From M Stenhouse - Delphian Technologies

To
Date 27th November 2009
Ref No, 02 prop.
Confidential

Background
The summary explains the operating principle from a functional (perforation)
perspective and goes on to propose an approach re adopting the system to enhance
fracture initiation in particular and fracturing operations (point source) in general.

Triple Charge Potential Performance, Perforation and Fracturing Enhancement

Delphian have progressed the triple charge technology since the initial well fracturing
operation undertaken for Caza Petroleum in the USA, and have performed pre
perforation modelling for a number of customers.

In confidence and as a competent example of the scale of productivity increase that

may be available through perforation alone, the following figures (below Fig 1) are
presented. While modelling the triple charge perforation capability it became
apparent that the device could also uniquely be employed prior to fracturing to
significantly lower the formation breakdown pressure. Indeed the initial Caza well in
Texas showed a significant reduction in fracture initiation pressure of some 2,000psi
from a historic 5,000psi initiation pressure to a post triple charge perforation fracture
initiation pressure of 3,000psi. The benefits of this pressure reduction are obvious
and important.

The perforation figures below were derived from actual well data and utilised the full
suite of available industry software. The modelling work demonstrates a substantial
productivity improvement of 22% over and above that available with conventional
perforation technology when utilising the triple charge (tight gas field modelled, see
Fig 1 below)

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 Analytical
Fig 1

In addition to the application by Caza Petroleum, wells have been successfully

perforated by Pemex in Mexico and Pertamina in Indonesia. There have been no
operational or practical issues arising from the deployment of the technology. It
cannot be guaranteed that well performance data will be made available by these
operators. However, both operators have ordered additional guns based on initial well
performance.

It should be noted that the above (tight gas Fig 1) analysis has been reviewed and the
mechanistic approach corroborated by BP experts. The charge is targeted at
competent, tight or hard formations and is particularly applicable in depleted
reservoirs. Further analysis would have to be undertaken if the triple were being
considered for high sand producing areas.

Fracturing
Significant interest has been generated in the market following initial success of the
triple charge technology. Several customers see the application of the device in the
fracturing area. Given that the triple charge perforator can uniquely be used to assist
in the orientation of the fracture and that the device generates a significantly larger
and cleaner tunnel (10x the volume compared to 3 conventional charges) the

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consensus is that the triple will considerably lower the initial fracturing pressure (see
Caza). A lower initiating pressure has many benefits including for example:
• Less costly equipment i.e. 5,000psi instead of 10,000psi spreads
• More access to greater amount of well portfolio due to reduced cost
• Less time and cost on fracing operations and improvements in safety
• Reduced amount of fluids and general material required
• Significantly more control over orientation and position of fracture initiation.
We believe that this would be of significant interest to yourselves, and once proven
can be rapidly and commercially extrapolated across their portfolio?

Point Source Fracture Initiation

In addition it is proposed that by optimally orientating the triple charge to align with
the prevailing stress planes, and initiating the fracture with the triple charge, local
“stress windows” will be created. Once aligned and instigated it is believed that the
fracture of the well will take place along the pre-formed perforation tunnels. The
effect of this will be a much more efficient and targeted fracture operation. The
benefit would be particularly applicable in horizontal wells where targeted fracture
zones as opposed to a more random approach would yield major benefits.

It may be possible to model this potential and we would welcome the opportunity to
undertake this work. Once the initial well was perforated with the triple and its
efficiency confirmed the technology has the potential to be further optimised for
specific applications or formations. A process may be e.g.:
• Deploy in initial well to confirm principle and benefit of triple charge in
fracturing operation
• Further model triple charge ability to assist in orientation and “point source”
fracturing.
• Optimise triple charge configuration to specific fracturing operations.
• Develop software to predict benefit of triple charge and inform future frac
operations.
• Align triple charge with complementary technologies
The following descriptor gives an overview of the triple charge functionality such that
it can be better understood in relation to its potential fracing application.

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Description of the Triple Charge Perforation System
Our initial goal was to significantly improve the ballistic access to the reservoir
utilising lateral thinking without adding complexity to the perforator or supporting
service. In order to accomplish this we developed the “triple charge” perforator.
The “triple charge” is a perforation system that converges three shaped
charges to a single point in the reservoir. The effect of this unique
configuration is truly significant. Compared to three conventional shaped
charges, the triple charge tunnel volume is ten times larger, and an order of
magnitude cleaner. This system contains the same number of ‘shots per foot’
and can be phased as required. The triple charge fits into standard gun
systems can be run on any standard wireline system (or TCP system) and
requires no additional training. There are no additional health and safety
considerations and no specialist resources or equipment required. The “triple
charge” has been developed over the past two and a half years to API 43
specification see Fig 2 below.

Triple System –

Fig 2

Delphian believe that once proven the triple charge could be rapidly deployed across
selected fields to significant commercial benefit.

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For your information early discussions with Wood Mackenzie have highlighted that
the system once proven in initial field trials can be commercially modelled in terms of
its ability to increase productivity and ultimate recoverability . A background study
has revealed that if successful on these initial wells, due to the speed of deployment
and competitive cost the potential upside in appropriate fields is very significant.

We would welcome the opportunity to work with you to facilitate the introduction of
the triple charge in the most appropriate manner. We look forward to debating the
potential with you.

END