Who are we? Private Alberta corporation, created in 2005 Business model is to use Waterless Drilling Technology (WDT) to grow our reserve base as an

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Cuthbert Gregory
5 years ago
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1 RC Energy Inc.

2 Who are we? Private Alberta corporation, created in 2005 Business model is to use Waterless Drilling Technology (WDT) to grow our reserve base as an Exploration & Production(E&P) company RC Energy Montana Ltd.( USA) is a subsidiary Jim Livingstone owns 95% of Innovation Energy Inc. created to develop Maritime Gas

3 Who are we? Jim Livingstone President & CE0 Owns 100% of the outstanding shares No debt Located in Calgary, Alberta Banking Bank of Montreal Legal Bennett Jones LLP

4 What we do Use our technology to reduce formation damage, improve well cementing and long reach drilling Source gas, CBM and oil opportunities where WD can solve damage problems and avoid or improve fracking operations Can evaluate large acreage positions quickly and economically for reservoir potential and commercial viability

5 What We Do Stimulate more of the reservoir with a vertical, deviated or horizontal well to access natural fractures with less drilling damage Obtain better samples from exact locations Stop and flow test zones as we drill them Eliminate fines migration Provide superior hole cleaning

6 Waterless Drilling Technology (WDT) Reverse Circulation Center Discharge (RCCD) Reverse Circulating Cementing (RCC) Extended Reach Drilling (ERD)

7 Waterless Drilling Technology 51 wells drilled to date Depths from 100 m to 1000 m Low pressure and low perm rock Water sensitive- clay swelling formations Difficult to stimulate formations due to nearby water zone Formations with clay or coal fine migration problems

8 Why Waterless Drilling Reduces drilling and completion damage Drilling fluid and cuttings returned through center tube Better quality of formation samples Superior hole cleaning Longer bit life Less environmental impact

9 Why Waterless Drilling Less drilling damage can reduce the need for hydraulic fracturing by accessing natural fractures Save cost of perforating, cementing, and fracturing production zones damaged from drilling Avoids loss circulation problems Low probability of getting stuck with three annuli to circulate through

10 Damage From Mud Drilling

11 Actual Air Drilling Damage

12 Damage From Cementing

13 Waterless Drilling Flow Path Air or nitrogen carried to bit or hammer Between outer and inner pipe walls Drill cuttings, exhausted air or nitrogen returned to surface through inner pipe

14 Dual-Wall Drill Pipe Flow Path

15 Dual-Wall Drill Pipe Inner Pipe Outer Pipe

16 Downhole Blow-Out Preventer (BOP)

17 Results of Vertical Waterless Drilling shallow gas wells All flowed gas to surface Two wells drilled through coal seam - flared coalbed methane immediately Milk River, Boyer and Bow Island formations drilled

18 Bow Island III Flaring

19 Bow Island IV Flaring

20 Milk River Formation

21 Blue Sky Formation

22 Waterless Drilling Southern Alberta 2006

23 Waterless Drilling Northern Alberta 2006

24 Results Since 2009 Three farm-ins completed First one - South Marsh Field in West Texas Second one - Borderline Project in northern Montana Third one - Lakeview in central Alberta Contract well - Caney shale Oklahoma All were fluid sensitive shale or sandstones

26 Caney Shale Gas Oklahoma

27 Dry Air Pac System

29 Venturi Eductor Allows the following operations to be completed without killing the well Run slotted liner, production casing or tubing Nipple down the surface BOP Install the wellhead Cable tool drilling in the Maritimes had to kill their clay rich wells with water

32 Natural Fractures Versus Type of Drilling US Dept. of Energy, multiwell experiment site Piceance Basin of Colorado Lenticular gas reservoir (same as Stoney Creek) Vertical well intersected 1 fracture Deviated hole intersected 52 fractures Horizontal hole intersected 37 fractures

33 A Tough Sell in the Maritimes

34 Infrastructure in Eastern Canada for Oil and Gas Very little, older equipment, yesterday s technology Mob and demob drilling rig from AB is over a $1 million Pressure cementing trucks need to be sourced out of St. John s Nfld. or London, Ont. Investors are reluctant to invest in projects with poor infrastructure, makes raising capital difficult Excellent drilling crews rotate out of eastern Canada to AB and around the world

35 New Infrastructure Needed Minimum Disturbance Drilling (MMD) are needed in certain parts of Quebec and Atlantic Canada to avoid destroying native vegetation and reduce land use Top Drive and Alternating Current (AC) rigs are needed for better performance in both gas and CBM AC Coil/Drill Pipe rigs allow the use of coil or drill pipe to improve penetration rates

36 Minimal Disturbance Drilling (MDD) Developed in Alberta to lessen impacts from drilling State of the art AC electric drilling control Nine rig loads plug into each other for shallow wells to 1000m No hydraulic couplings to leak oil Protect native grasses, no need to remove topsoil

37 MDD Depending on geology, wells can be drilled with air or water Air drilling has dust control system Mud drilling uses floc water tanks to store return fluids Land spreading of drilling mud possible Use of drilling sumps eliminated

38 MDD Summary Allows a better chance for access to land where agricultural, ranching or other uses are in conflict Reduces the operation footprint by using air or floc water as the drilling medium When used with Waterless Drilling can minimize abandonment and reclamation time and costs

39 Waterless Drilling-MDD Rig

40 Waterless Drilling-MDD rig drilling in Alberta

41 Waterless Drilling-MDD Texas

42 Waterless Drilling MDD completed well

43 Waterless Drilling MDD drilling lease one year after abandonment & reclamation

44 Why aren t more operators using Waterless Drilling? Companies frac most formations due to low perm, believe you can frac past formation damage, so no need to avoid it Fracking has worked well in marine shales in Texas, Oklahoma, Pennsylvania, BC and AB Gas drilling is at historic low levels due to low gas prices The technology is only available on a farm-in basis and not through a service provider

45 Waterless Drilling Summary Excellent applications for the following: Low pressure reservoirs like shallow gas High perm zones where fluids are pushed in CBM to avoid damaging the cleat system Reservoirs with swelling clays, fines migration or water zone problems Reservoirs that need to access natural fractures

46 Waterless Drilling Summary Has advantages for all stakeholders: Investors like the cost savings from avoiding fracking, cementing production casing and perforating. Production on stream much faster Operators appreciate a much easier and faster regulatory process. Better sampling and testing zones while drilling Landowners like less land disturbed and much less truck traffic

47 Waterless Drilling Summary First Nations get groundwater protected, water usage issues disappear and fewer impacts on land Environmentalist have a lot of their negative issues about E&P activities addressed by not fracking Government can allow E&P activities in areas where fracking is banned, creating jobs and royalties Media have a new technology to talk about

48 We can t solve problems by using the same kind of thinking we used when we created them. -Albert Einstein

49 Waterless Drilling Technology (WDT) Contact: RC Energy Inc

Completion Solutions Inc.

Completion Solutions Inc. Simple Designs That Simply Work! Company Introduction Dec 2012 1 Who is Completions Solutions Inc? Founded in 2012 Focused on efficient and economical well bore stimulation (both