ProOne Downhole Drilling Fluid

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1 ProOne Downhole Drilling Fluid Friction Reducing Lubricants.. Saving Downtime & Equipment ProOne Downhole Drilling Slurry: Technology Summary: Traditional lubricants are limited in their ability to provide adequate lubrication and reduce friction under extreme heat and pressure conditions, which is when that lubrication is needed most. In fact most conventional lubricants break down under heat and pressure, and migrate away from the source of friction. In downhole drilling applications, friction is a critical factor in performance and the industry loses billions of dollars a year in downtime and excessive operating costs as a result of inadequate lubrication. A breakthrough lubrication technology known as XPL+ from ProOne represents a new generation of lubrication that has proven to be 50 times more powerful that traditional lubricants. In a bench cross-axis friction machine test, bearings are subjected to pressure from a spinning race. Using regular lubricants without XPL+, the bearing sustains severe damage at only 4,000 pounds of pressure. With ProOne s exclusive XPL+ technology, there is minimal damage at 200,000 pounds...over 50 times the pressure.

2 ProOne Downhole Drilling Fluid (PODHDF) focuses around ProOne s XPL+ technology which stands for Xtreme Pressure Lubricants. The + is for the positively charged molecule structure that brings additional film strength of protection by way of reversing the polarization of the molecule structure of base lubricants. This positively charged technology reduces the S.E.M.F. (Static- Electro-Magnetic-Field) which in turn reduces Electrolysis. When the slurry is mixed at 4 to 6% solution rate from the concentrate, this provides the ability to surround the granular structure with lubrication giving exceptional performance. ProOne s Drilling Additive can provide a reduction in friction up to and beyond 74% and also will increase the film strength of the existing drill mud in upwards of 175,000 psi. By using a strong positive Ionic charged lubricant, not only to the drill bit but to drill pipe and casing, PODHDF aids in wear and friction reduction. This not only provides wear protection for drilling equipment but also reduces drilling torque and drag. PODHDF also attacks heat at the source preventing over 30 percent of heat build up from occurring at point of contact of drilling bits and drill strings to casing walls; further reducing costly wear. Through the bonding of the lubricant to metal, a surface layer is created that protects the metal at extreme loads and temperatures and also prevents the penetration of foreign material such as dirt, rocks, water and salts. The product emulsifies in all water based drilling fluids and stays emulsified for a much longer period of time over standard industry lubricants. It will also reduce corrosion and electrolysis by as much as 75% by creating a virtually impenetrable boundary layer of lubricant molecules on all metal surfaces. Pro One s low mix ratios of between 4 and 6 percent by volume of drilling fluids is a cost effective solution to friction reduction, which leads to drilling cost reductions and overall positive project economics. This performance is referred to as a metal treatment but actually goes beyond that description. Because of its reversed polarization, it actually protects non-ferrous type materials to cover several critical moving parts within the downhole drilling equipment. By reducing the coefficient of friction and heat, this minimizes the acidic oxidation process that sets up within lubrication that causes premature part wear and downtime. The PODHDF lubrication surrounds the calcium that builds up and will help to neutralize the acidic levels, keeping the PH balance neutral helping to avoid oxidation, corrosion build up and electrolysis, while all the time protecting

3 pumping applications, seals and machinery parts, thus extending the life of equipment and dramatically reducing downtime. PODHDF is an aqueous based drilling fluid which can significantly raise the boiling point of the water based lubricant when mixed with the drilling mud at 6%. By reducing the friction, heat and raising the boiling point, this will dramatically reduce the chances of hydro-locking the mud, which is when the moisture turns to steam and rises away from the drill bit which is where the moisture / drilling fluid is needed, and typical lubricants fail to bring lubricity to these high impact areas. In turn more top load performance is increased to the drilling components, prematurely wearing out mud motors and drill bits. In these cases the PODHDF can at least double the life of the drill bit and extend the operating time of the mud motors which can result in savings of millions of dollars per hole when the drill bit cost and mud motor costs of downtime and labor is taken into account. A tungsten carbide 10 7/8 bit can cost approximately $20,000+, while a 7 7/8 DCP (Diamond Carbide Plate) bit can cost approximately $125,000+, along with the mud motor savings. This is why current downhole drilling fluids are inadequate to provide the necessary lubrication and protection, which costs the industry billions of dollars extra per year. PODHDF is a non-hazardous product that will allow for an easier disposal and help with health issues that other standard lubricants do not offer. What this means is that Pro One s Drilling additive is not only safer for the environment as well as the drilling crew using the product. In the past, #2 diesel fuel has been used as an emulsifier, along with other non-environmentally friendly lubricants which have disposability problems that are costly for operators. PODHDF represents a significant costs savings in this area. Testing: The PODHDF has been tested by world renowned Southwest Research Institute in San Antonio Texas. This rigorous testing process has been proven with coefficient of friction reductions of 74% as per the attached, tested as RFH1- ProOne used at 6% (RFH1= Reduced-Friction-Heat-ProOne). Procedure: Testing for lubricity on (3) different brand lubricants was conducted at a testing facility in Texas using 10.8 lb/gal based drilling mud. Using the proper mix ratio, the following products were used:

4 RFH1 - Pro One Inc. Lube # 2 Company Confidential Lube # 3 Company Confidential To start with a baseline coefficient of friction (CoF), a friction test on a sample of the base fluid was done using a Falex Test method. The base fluid, treated with 4% and 6% of each lubricant, was tested on the Falex Lubricity Tester by the Texas testing facility at various applied loads. Duplicates of each test were run to ensure value repeatability per ASTM standards. All lubricants were found to be compatible with the base fluid (a viscosity increase was observed with the additions of the (3) lubricants). Results, in terms of improvement (reduction) in the CoF were achieved, also percent of torque reduction.

5 Falex Lubricity Test Results (CoF) and Percent (%) of Improvement Applied Load (in-lbs) 160 % Improvement Base Fluid Lube # 2@ 4% Lube # 6% % % Lube # 4% Lube # 6% Baseline Fluid 10.8 lb/gal (Drill Mud)

6 ANALYSIS: The coefficient of friction (CoF) for the base fluid was around The highest friction reduction with the RFH1- ProOne lubricant at a 4% concentration. An improvement of 20% was realized. The highest friction reduction with the RFH1- ProOne lubricant at a 6% concentration. An improvement of 74% was realized. Although the Lube 4% has a very good initial reduction (16%), effectiveness diminishes when the concentration was increased to 6%. An observation with Lube 2 is that the 4% concentration only has a 5% improvement. This would require that 6% be used to obtain its best torque reduction. (12%) At 4% of RFH1- ProOne added to the base drill mud, it gave more friction reduction than 6% Lube 2 which could make the RFH1- ProOne very cost effective at 6%. Additional testing procedures such as the Berea Flow Test passed with great performance.

7 Typical Cost Savings: The bottom line savings from using this product are sizeable compared to the relatively low incremental cost of using the product. A 10,000 foot well might use 40 drums of PODHDF, plus a recommended 20 drums as backup, but this is a small fraction of the potential savings that can be realized in a number of areas: Drill bit savings Depending on the drilling location core, drill bits can cost $125,000 or more each. Reducing friction saves heat and wear on the rotating part of the drill bits, saving up to 2 bits per well drilled. Drill bit changes More importantly, a single bit change can cost upwards of $20,000 per hour and take up to 48 hours so a single trip can cost nearly one million dollars. Drill Mud Motor savings An average 15,000 ft well can take up to 4 drill mud motors, depending on the angle of the well. The failure of the drill mud motors comes from heat degrading the seals and destroying the motor. Reducing temperature and friction again can reduce the number of drill motors needed and save thousands in trip time and repairs. Reduced stress/energy on top load equipment The Top Drive rotates the drill pipe and controls the ROP (Rate of Penetration) of the well. When friction can be reduced down hole, the Top Drive does not have to work as hard, thus giving a smoother, cooler operating system. Increased Drilling performance to oil/gas depth Reducing friction, less bit/pipe trips, cooler running mud motors allows for deeper wells and better horizontal drilling options. Reduced drag Drilling horizontal wells can cause up to 40% more drag on the Top Drive and mud motors. Reducing the friction by creating a barrier film between the pipe and casing will allow for reduced drag, longer drill bit life and better results when having a horizontal option. Premature down hole string and tool failures as well as grossly inefficient drilling attempts caused by the excessive unmitigated friction, costs the industry billions of extra dollars in remedial tripping to change out these friction-damaged tools.

8 Extended Applications: With extended applications in directional / horizontal drilling, this form of drilling puts loads on drilling equipment for extended periods of time that can reach far beyond normal vertical drilling. These are the severe loads and applications that require reductions of coefficient of friction to extend performance to downhole drilling components such as drill bits and mud motors, reduce torque for top load equipment, and to reduce drag, downhole drilling vibrations and hydro-locking / stuck pipe. These performance benefits are long lasting by using this polarized environmentally safe technology, extending and protecting all drilling components that will be built into the drilling equipment to perform over and over in this very extreme environment, giving extended reliability and greatly reduced maintenance costs. These are just a few of the benefits that will save a major amount of downtime and dollars by using the ProOne Downhole Drilling Fluid For additional information please contact ProOne Inc. at (714) or info@pro-one.us

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