eCORP Stimulation Technologies, LLC (ecorpStim) Pure Propane (PPS) - - PowerPoint PPT Presentation

eCORP Stimulation Technologies, LLC (ecorpStim) Pure Propane (PPS) and Non-Flammable Propane (NFP) Stimulation of Shale

Presented by John Francis Thrash, CEO October 9th 2014 Paris, France

Overview

Water Based Hydraulic Fracturing (HF) – Today, commonly employed formulations for hydraulically

fracturing source rocks include the use of massive quantities of water in mixture with a variety of chemical additives combined with various proppant materials which are injected under high pressure into the rock

• formations. After stimulation there is an attempt to recover the water, chemicals and dissolved reservoir content

from the newly established fracture system in the rock.

Perceived Risks – All of these basic features of the process, as routinely practiced today, are sometimes

associated with real and potential environmental and safety hazards as well as variable performance outcomes in certain instances.

Infrastructure Limitations – This standard technology can present profound logistical challenges in a

number of the newly evolving basins around the planet where there maybe water and infrastructure limitations, extremely cold climes or other conditions not previously routinely encountered in the North American shale experience.

Pure Propane Stimulation (PPS) – A simple binary system of propane, butane or similar lightweight

hydrocarbon, used in combination with man-made proppants of specifically designed dimensions and densities. The list of routinely encountered impacts associated with water-based HF obviated by PPS is very nearly complete.

Flammability – Although propane is the third most frequent component of natural gas, and used in over 120

million households in Europe, the primary concern associated with its use in shale stimulation is flammability. This presentation discusses the science and techniques for safely utilizing PPS to stimulate production from shale source rocks, including the Non-Flammable Propane Stimulation (NFP) option and other safety features of the mechanical system, layout and operating protocols.

Economics – The economics of these systems are discussed, in particular, when propane can be self-

supplied by the operator once initial production has commenced.

Background Who is eCORP International, LLC

Background

Who is eCORP International, LLC ?  eCORP is Headquartered in Houston, Texas with Offices Located in London, Paris, Madrid, Zurich and Sofia, Bulgaria  eCORP companies have been in business since 1978  eCORP has Closed Billions of USD in Successful Transactions & Developments  eCORP is a Privately Held Vertically Integrated Energy Company whose Primary Experiences Include:  Exploration & Production: Conventional and Unconventional  Natural Gas Storage and Pipelines  Enhanced Oil Recovery (EOR)  Specialized Field Services  Natural Gas Fired Power Generation

 Seeks to be First Mover, Innovative & Environmentally Sound  A Recognized as a Green/Low Environmental Impact Developer  A Developer of Novel and Successful Technical Solutions

Organizing Principles of eCORP – Safety and Environmental Care  Impeccable Safety Record in All Operations Since Inception  Zero Incidents with Propane (LPG) Operations for 35 Years  Commitment to Environmentally Sensitive Development Practices  Surface Aesthetics, Noise/Light Abatement, Infrastructure Impacts  Extensive Proactive Community Engagement  Maximize Cultural and Economic Benefit for the Community  Strive to Exceed Industry and Regulatory Standards  Innovate/Adapt Technology to Address Challenging Geologic and Reservoir Conditions while Maintaining Meticulous Environmental Care and Concern Today eCORP continues developments via positive interactions with regulators, legislatures, communities, NGO, virtually all stakeholders, in venues such as North America, and in such challenging states as New York, and in closed markets such as Mexico, as well as in Europe.

History Relevant to Pure Propane Stimulation

Enhanced Oil Recovery (EOR)  Propane and Butane EOR Projects – Approx. 450 Well Development in Three Counties in South Texas  Miscible and Immiscible CO2 EOR Projects  Bio-Polymer EOR Project with Pfizer Oil Field Products  Largest Independent in EOR in Texas 1978 – 1988  Perfect Safety Record with Propane and Butane EOR  Trouble Free Operation of Propane / Butane Recycling

Natural Gas Storage and Pipelines  eCORP has been involved in Approximately 20% of New Storage Capacity Additions in the United States since Deregulation beginning in 1985  SalternativesTM Technology (horizontal well drilling and completion IP) and the Stuart Storage Facility, Stuart, Oklahoma 1991 – 2001  First All Horizontal Well Storage Development  Propane Stimulation / Clean-up of Storage Wells  Stagecoach Storage Facility 2002 – 2005  Nearest Storage to NYC / New England Gas Market  Most Productive Wells Drilled in the Lower 48 States  American Institute of Architecture (AIA) Award Winning / Environmental Design

Located Near Town of Owego New York State

Exploration & Production: Unconventional  eCORP Resource Partners I, LP was the 7th Largest Non-Barnett US Shale Acreage Holder 2006 – 2008  Pioneer in US Shale: Example: Early 200,000 Acre Play in the Core

• f Marcellus Shale in Pennsylvania beginning in 2005

 Closest Shale Well to New York City  eCORP Holds a Substantial Shale Acreage Position in Western Europe (> 1 Million Net Acreages) 2009 to Present

Specialized Field Services  ecorpStim (www.ecorpstim.com)  Launch of Pure Propane Stimulation (PPS) for Shale 2011  Key GasFrac Personnel Join ecorpStim 2012  Preliminary Field Testing of PPS 2012  Non-Flammable Propane Stimulation (NFP) Launched in 2013  Formation of the ecorpStim R&D Consortium 2014  eCORP subsidiary eCOREx founded 2011  Provides Minimal Discharge Micro-hole Coring Drilling for Rapid Inexpensive Evaluation of Hydrocarbon Reservoirs with Minimal Environmental Footprint and Impacts

Summary of Key eCORP History Relative the ecorpStim Proposition  Long History and Operating Experience with Propane (LPG) Stimulation in a Variety of Reservoir Settings  Perfect Safety Record with Propane (LPG) Stimulation Employed in eCORP Projects of All Kinds  Commitment to Innovation for the Preservation of the Environment  Extensive and Varied Shale Experience Internationally  Strong Track Record of Commercial Successes in Applying New Technologies Safety + Environmental Care + Propane History + Shale Experience

= PPS and NFP

Challenges in the Stimulation of Shale Reservoirs

Challenges in the Stimulation of Shale Reservoirs

 How can we get the Maximum Rates and Recoveries from Extremely Low Permeability Reservoirs?  Low Recovery Factors  How can we get the Maximum Effective Fracture Length from the Stimulation Process?  How do we Manage High Capillary Pressure Reservoirs  How do we Contend with Historically Low Frac-Water Recoveries (~20%) How can we Insure the Mechanical Fluid is Compatible with the Shale and Formation Fluids?  Easily Damaged Reservoirs – Swelling Clays, Imbibition, Water Blockage, etc.  Changes in the Strength of the Rock Facies?  How will we Minimize the Environmental Impact?  Water Usage  Disposal of Fracturing Fluids/Waste Streams  Venting/Flaring



How will we Achieve Safe Operations?

In Search of the “Perfect” Fluid?

 Reservoir Performance  Non-Damaging (Water Blocks/Imbibition, Clay Swelling, Softening Formation, Scale, Emulsions, Gel Damage)  Create the Required Fracture Geometry  Effective Proppant Transport  Only Proppant Remains in the Fracture  100% Fluid Recovery  100% Fracture Volume Contributes to Production  Environmental & Economic Performance  No Chemicals Required to Modify the Mechanical Fluid  All Fluids Recovered are Marketable or Recyclable  Sustainability and Natural Substances)  Eliminate Water Usage, Disposal Needs, & CO2 Venting  Operationally Safe  Injury and Accident Free Execution

Consider LPG Past Use in Reservoir Stimulation

A 100% Compatible Stimulation Fluid Morris Muskat, Industrial and Engineering Chemistry, July 1953 “Laboratory experiments have demonstrated that complete removal of

• il from a porous medium can readily be obtained by displacing it with

the liquefied petroleum gases, propane, and butanes…” Koch & Slobod, SPE 714, Oct 1956 “Miscible phase displacement oil has been an intriguing idea because the elimination of capillary effects in the reservoir leads to 100% recovery in the areas contacted by the miscible displacing phase.” Roger Sessions, SPE 341, Jan 1963 “A number of laboratory tests with Slaughter crude indicates small propane slugs would efficiently displace 100% of the oil contacted in a sand packed column.”

Henderson, et. al., Petroleum Transactions 3501, Vol. 198, 1953 “A laboratory investigation of oil displacement from porous media by a liquefied petroleum gas.”

Thrash & Thrash, Oil World, Oct 1985 “Gaseous propane brings new life to field.”

Lestz et al, World Oil, July 2011

“Propane-based fracturing improves well performance in Canadian tight reservoirs.”

PAGE 6

www.gasfrac.com

GASFRA FRAC E Experien ence

• Over 2,400 Fracs on over 700 Locations
• 302,000 gallons of LPG and of 143 million pounds of proppant
• Largest job to date: 1.5 million pounds, 24 stage (15,000 foot horizontal)
• Highest pressure treatment to 90 MPa
• Treating rates to 8m3/min and proppant concentrations to 2,200 pounds/m3
• Oil, Gas, and Condensate wells
• Deepest Treatment to over 12,000 foot TVD
• Formation Temperatures from 12o C to 150o C
• Contracts with both Husky and BlackBrush renewed in Sept/Oct 2014
• Work performed in numerous formations (Eagleford, San Miguel, Cardium, Viking,

Utica, Frederick Brook Shale)

PAGE 7

www.gasfrac.com

Rec ecent O Oper perat ating A g Areas eas

Canada United States

Western Canada Texas Eastern Canada Marcellus/Utica

• LPG/Hybrid/HRVP
• Husky, Paramount
• Hybrid/HRVP
• BlackBrush
• Negotiating with

large intermediate

• Hybrid/HRVP
• Emerging market
• Trial ongoing with
• ne large

intermediate and another scheduled

• LPG
• Corridor

Q3 - 2014 Q4 - 2014

PAGE 16

www.gasfrac.com

LPG PG Tech chnol

• log
• gy: Si

Significant A t Adva vantages VS

• VS. C

Con

• nve

ventional

• Greatly enhances production and project

economics both initially and long term

• 100% of fracturing fluids recovery
• Can be handled as a liquid on the Surface
• No water required
• No flaring of gas
• Greatly improved NPV

Frac Load Fluid Recovery

Producing Days

PAGE 22

www.gasfrac.com

Mark rket Si t Size / / Value P Prop ropos

• sition

GASFRAC’s Processes Allows For Superior Production Compared To Substitute Technologies Cumulative BOE: South Texas Data Average IP Rates: South Texas Data GASFRAC Continues To Develop New Processes That Can Cater To A Variety of Projects

BOE OE

Water Frac Average

Challenges with Today’s LPG Gel Technology

Challenges with Today’s LPG Gel Technology

Source: Frac Focus Job Start Date 11-8-13; Zavala, County TX

Challenges with Today’s LPG Gel Technology Cont.

Source: Frac Focus Job Start Date 11-8-13; Zavala, County TX

 Gel Residues Left Behind  Chemical Interactions Barium or Strontium Sulfate Scales  Un-reacted Phosphates Impact on Refinery Catalysis  Proppant Transport – Thermal Thinning of Fluids Downhole  Aromatics Injected as Dispersants  Safety Record

Summary Comparison of Key Features - PPS vs. LPG Gel Frac

Process Fundamentals PPS LPG Gel Fracturing Chemicals Added to Propane Zero Many Reactive Species Use of Petroleum Distillates (Aromatics) Zero Numerous Fluid Costs (Other than Propane) Zero Chemicals + Storage + Combining Both Components Expense Issues at Refinery Zero Catalysis Poisoning Due to Free Phosphorus Residue Left in the Formation Zero Yes Negative Interactions with Formation Water Zero Yes / Insoluble Scale Viscosity Low (<1 cp) High on Surface Only (~300 cp) Low at Bottom Hole Temp (<10’s cp) Proppant Transport Above / Below Ground High / High High / Low Mechanical Fundamentals ecorpStim LPG Gel Fracturing Pumpable Proppant Volume No Limit 200,000 lbs Maximum Frac Pump Emissions Zero Diesel Engine Emissions Ignition Points in Hot Zone Zero Significant Including Prime Mover Engines Fully Automated & Remote Operational Control Yes No

Pure Propane (without Gel) is a Compelling Answer

Pure Propane (without Gel) is a Compelling Answer

 LPG is Non-Damaging to the Formation and Reservoir Fluids  No Clay Swelling/Interactions  No Scale  No Softening of the Formation Fracture Facies  No Damage  Low Surface Tension and Viscosity  10 Times Less Surface Tension than Water  Capillary Threshold Pressures are 10x Less with Propane  8 Times Less Viscosity than Water  Non-Wetting Fluid in Most Reservoirs  No Negative Relative Perm Effects  Soluble with the Gas or Oil (Can Precipitate Asphaltenes)  Mixes with Natural Gas Causing Propane to Vaporize  1st Contact Miscible with Most Crude Oils

Consider Regain Permeability Studies

Canadian Institute of Mining Metallurgy & Petroleum 2009 “Indicates that LPG Frac fluid (#6) reaches 100% regain permeability in Montney shale at the lowest pressure exceeding the performance of 95% N2 (#2), 50/50 Light Oil/CO2 (#3), and 80% N2 (#11). Water regain perm of 20% - 40%.”

Pure Propane (without Gel) is a Compelling Answer Cont.

 Environmental Benefits  No Water  No Chemical Additives – Biocides, Polymers, Surfactants  Non-Toxic  Non-Carcinogenic  No Waste Streams  No Seismicity from Long Term Water Injection/Disposal  Recoverable & Recyclable  Smaller Volumes for Equivalent Effective Fracture Lengths

• Less Trucking
• Less Emissions
• Less Disturbance
• Smaller Footprint

Pure Propane (without Gel) is a Compelling Answer Cont.

 Safety Reasons  > 100 Year of History of Handling Propane  Established Industry Recommended Practices  Well Established Safe Infrastructure Exists Today  Disperses at Ambient Temperature and Pressure  Low Flammability Rating = Ignition Only > 940 degrees F versus Gasoline Ignition Temperature <500 degrees F  Propane Use in Europe  120 Million Households/Businesses Using LPG in Europe  30.6 Million Tons Per Year  200 Million Cylinders Located in Homes and Businesses  9 000 Road Tankers Permitted to Drive European Roadways

Source : AEGPL Technical Commission

PPS is Amenable to Safe Application in the Oil Patch

eCORP Next Generation Propane Stimulation Spread Layout 

Intrinsically Safe All Electric Drive Compression & Mechanicals

Benefits of eCORP All Electric Power Spread

 Safety  Explosion Proof Motors vs. Diesel Engines &Transmissions  Elimination of Engines Ignition Points  Remaining Ignition Points Removed from “Hot Zone”  Operational/Economical Considerations  Greater Control of Pump Rate  Micro-Sec Kickouts & Ability to Soft Start  Improved Reliability – Less Moving Parts  Longer Life of Pumping Equipment  Elimination of Engine and Line Pulsations  Lower Maintenance  Ability to Operate in Extreme Cold Weather  Real Time Diagnostics – Leads to Predictive Maintenance  Reduced Human Interface to Execute a Job  Remote Control and Ease of Automation  Reduced Cost of HP on Location

Benefits of eCORP All Electric Power Spread Cont.

 Sustainable Operations with Grid Power  Completely Eliminate Emissions from Pumping Equipment  Eliminate Noise Associated from the Pumps  Reduced Traffic to Location  Horsepower Loads Reduced by 50%  Dramatically Reduce Location Footprint

ecorpStim Innovative Safety Enhancement Collaborations

 Define Critical Challenge  Identify Similar Circumstances Encountered in other Disciplines  Investigate and Adapt  Non- O&G Sector Industries Sources  Military (Propulsion, Material Science, Safety)  Automotive (Mobile Air Conditioning, Light Weight Parts)  Refining (Safety Sensors, Spill Proof Connectors)  Shipping (Material Logistics)  Railroad (Propulsion)  Construction/Cement (Specialized Pumps)  Agriculture (Grain Dust Collectors)  Fire Protection (Low Toxicity and Low Residue Extinguishers)  Plastics Molding (Fillers and Lightweight Additives)  Medical (Anesthesia, Propellants & Drug Delivery Systems)

Non-Flammable Propane via Heptafluoropropane

Members of the ecorpStim Safety and Environmental R&D Consortium

 Rice University (USA) – to advance the optimization of non-flammable propane chemistry, manufacturing, operations and cost. The fundamental components being investigated include:

 Process engineering – Reduce Cost of HFP  Commercial effects of HFP purity  Advanced field separation and recycling – Complete Re-Capture Life of Project

 Energy Safety Research Institute at Swansea University (UK) – The enlarged research group builds upon the work completed to date to extend and amplify their applied research in safety and environmental performance for shale gas development using HFP as a stimulation fluid replacing fresh water used in hydro-fracing. The focus of this partnership is the comprehensive study and design of the safety aspects of achieving an environmentally and socially acceptable technology for oil and gas production from shales. The key subject areas of collaborative study include:

 The capture, recycling and loss prevention of injected HFP  The chemistry and material science for systems associated with the use of HFP.

Members of the ecorpStim Safety and Environmental R&D Consortium Cont.

 The Université Joseph Fourier (FR)  Seismic analysis, risk analysis, release of toxic elements by anoxic shale type systems  Baylor College of Medicine (USA) evaluating and furthering developments in delivery of ecorpStim’s non-water, chemical-free stimulation technologies, with the goal of making them environmentally sustainable and safe to humans.  Glass Technology Services (UK) – furthering ecorpStim’s goals of advancing proprietary concepts for the use of silica, the raw material with which glass is made, in the environmentally sustainable development of shale hydrocarbon production. One such patent pending technology involves the novel combination of two components only – a stimulation fluid (heptafluoropropane) and a proppant (mesoporous silica) – both of which are approved in different forms of medical treatments.

Airbus Defence & Space (FR) – Monitoring / Satellite assessment of mm altimetric changes, surface temperature & aerosol concentration, gravimetric reservoir estimates. Access to data from:

• Landsat 8 OLI - Vegetation Changes
• Landsat 8 (Thermal InfraRed Sensor) - Surface Temperature
• Sentinel 1 (Synthetic Aperture Radar) – mm Land Height

Non-Flammable Propane Stimulation (NFP) with Heptafluoropropane (HFP)

HFP Comparison with Propane and n-Butane

Non-Flammable Propane Stimulation (NFP) with Heptafluoropropane (HFP) Cont.

 NFP Suppresses 100% of the Industrial Risks Associated with the Use of Regular Propane:  Flammability risk  Explosion risk  NFP Strengthens the Security System as it is Applied to All Stages of the Operation Chain:  On roads, during transport of the stimulation fluid in trucks  On the exploration/exploitation platform for the stimulation

• peration

 On site or in a warehouse, for storage of the fluid  Sites will not be submitted to SEVESO classification

Non-Flammable Propane Stimulation (NFP) with Heptafluoropropane (HFP) Cont.

 NFP Excels in Every Defining Category of Chemical and Physical Properties that Dictate Performance as a Stimulation Fluid in Shale Reservoirs:  Low surface tension (1/10 that of water)  NFP is very efficient in proppant transport and placement: specific gravity is one and a half times that of water  A wide variety of proppants (sand, ceramics…) may be utilized with NFP  NFP can be recovered, just like pure propane  NFP is easily separable from other components of natural gas coming out of the well (especially propane and butane, NFP’s closest molecular analogs).

Non-Flammable Propane Stimulation (NFP) with Heptafluoropropane (HFP) Cont.

 NFP is Safe for Human Health and the Environment  Non-toxic  Non-carcinogenic  Non-Mutagenic  Non-irritating  Zero ozone depleting potential  If Released above Ground, it Dissipates as a Gas  HFP Safety Fully Demonstrated and Widely Used:  As the Propellant in Inhalers for Children and Adults  As a fire extinguishing agent for use in human environments such as homes, offices, work places and schools  Fire Extinguisher for Formula One Racing Exclusively  Exceedingly Thermally Stable, Inert and Non-Reactive

Non-Flammable Propane Stimulation (NFP) with Heptafluoropropane (HFP) Cont.

 HFP has High Global Warming Potential & Very High Expense  NFP was Developed to Replace Chlorofluorocarbons in Order to Protect the Ozone Layer in which it is Effective  However NFP using HFP Cannot Contribute in to Global Warming in any Significant Way  Any NFP Process that would Release HFP to the Atmosphere would be Ruinously Uneconomic and Thus Discontinued

Inescapable Economic Condition is the Ultimate Safety Guarantee Imposed upon the NFP (HFP) Proposal Relative to HFP Global Warming Potential

Comparison of PPS (and NFP) Efficiency with Water and Gelled Stimulation Systems

Effective Fracture Length Propped Fracture Length

Reservoir Inflow No Fracture Inflow

• Damage Created by Imbibition/Relative Perm Effects, Clay Swelling and Reducing Shale

Strength in the Near Fracture Area Results in Shorter Effective Fracture Length and Lower Recoveries

• Volume of Frac Fluid Recovered is Proportional to the Effective Frac Length/Height

(Based on Shell’s Work by Gdanski)

Water Based Fracturing Systems Top View Side View

Pumping Frac Height Un‐Propped Area The Reality – Gel Propane Fracturing Systems Side View

Effective Length Un‐Propped Length Pumping Fracture Length

Fractured Area Propped Area

• Superior Early Production Followed by Rapid Declines
• Shorter Effective Lengths Leading to Lower Cumulative Production
• Poor Proppant Transport and Gel Residue Issues
• Wasted Energy, Resources and Expense to Create Excessive Non-Productive Fracture Area

Damaged Length

Reservoir Inflow Effective Fracture Length Propped Fracture Length



No Damage Created in the Near Wellbore, Fracture, or in the Reservoir



Dual Stimulation is Achieved via 1) the Created Fracture and 2) Improved Relative Perm in the Near Wellbore Area due to Propane Miscibility

Propane as a Stimulation Fluid Side View Top View

Fracture Geometry as a Function of Fluid Viscosity

Fracture Geometry as a Function of Fluid Viscosity

• Viscous Fluids have Demonstrated a Great Likelihood to Create Relatively Planar Fractures
• Thinner Fluids Such as Slickwater have Shown via Microseismic to Create a More Complex

Fracturing Network

• But How Effective is a More Complex Fracturing Network in Contributing to Long Term

Production?

• Are Today’s Proppants Effectively Being Placed and Propping Any Fracturing Complexity?
• Can ecorpStim Proppants Be a More Effective Solution?

X‐Linked Slickwater

Comparison of Barnett Shale Initial X-Linked Stimulation toSlickwater ReFrac, from SPE 95565

Fracturing with propane and heptafluoropropane

• How do these gases behave?

– Experimental and computational studies – Need to be able to investigate the differences between fluids

Compaction zone around fractures Gas fractures Porous/deformable medium

Gas pressure as a function of time

Pressure drop = growth in fracture branch

Fracture Modeling with a Low Viscosity Fluid

Model Parameters

• Newtonian Fluid = .144 cP

(lower limit of FracPro)

• Job Volume

– 133,000 gals of Propane – 200,000 gals of 100 mesh

• Pump Rate = 20 BPM
• Max Prop Conc = 3 PPG
• Perf Depth = 13,500’
• Young’s Modulus = 6x106 psi
• Poisson’s Ratio = .3
• Permeability = 10

nanodarcies Simulated Geometry

• Propped Half Length = 1090’
• Propped Height = 283’
• Max Pumping Width = .66”
• Avg Pumping Width = .32”
• Avg Prop Conc = .41 lb/ft2
• Fcd = 699

Source: Modeling Provided by ACB Energy

Time (min) Surf Pressure (psi) Slurry Rate (bpm) Net Pressure (psi)

0.0 112.0 224.0 336.0 448.0 560.0 2000 4000 6000 8000 10000 10 20 30 40 50 200 400 600 800 1000

Impact of Viscosity on Net Pressure (and Width)

• Modeled 3 Successive Identical Pump‐In

Varying only Fluid Viscosity

– 1st Fluid – Saltwater – 2nd Fluid – Linear 40# Gel – 3rd Fluid – X‐linked 40# Gel

• Net Pressure Developed Varied Slightly

Among All 3 Injections

– 19 psi increase over Linear Gel from Saltwater – 90 psi increase over X‐Linked Fluid from Saltwater (12% Increase)

• Width at the Perfs Showed Minimal Changes

as it is Proportional to Net Pressure (Pnet) in PKN Model (.395” to .445”)

2 1

• Net Pressure were in the 700‐800 psi Range

Due to a High Critical Stress Intensity Factor (KIc ).

• Previous Years Low KIc Values were Used

Resulting in Narrower Fracture Widths and thus Sensitive to Viscosity (

=70 psi)

• Field Experiments have Validated Low

Viscous Fluids Can Create Sufficient Width to Place Proppant (Waterfrac Treatments)

Time (min) Frac Length (ft) Net Pressure (psi) Average Width (in) Width at Perfs (in) Slurry Rate (bpm) Surf Pressure (psi) Total Frac Ht. (ft)

0.0 122.0 244.0 366.0 488.0 610.0 100 200 300 400 500 200 400 600 800 1000 0.0 0.1 0.2 0.3 0.4 0.5 0.0 0.1 0.2 0.3 0.4 0.5 10 20 30 40 50 2000 4000 6000 8000 10000 0.0 40.00 80.00 120.0 160.0 200.0

Source: Modeling Provided by ACB Energy

Source: Schubarth Inc.

Impact of Fracture Length and Number of Stages

31

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2 1

064 . 4          

t

• wf

i f

c k t B P P hL q  

k r c t

i t 2

948 

Source: Schubarth Inc.

Effective Fracture Length Propped Fracture Length

Reservoir Inflow No Fracture Inflow

• Damage Created by Imbibition/Relative Perm Effects, Clay Swelling and Reducing Shale

Strength in the Near Fracture Area Results in Shorter Effective Fracture Length and Lower Recoveries

• Volume of Frac Fluid Recovered is Proportional to the Effective Frac Length/Height

(Based on Shell’s Work by Gdanski)

Water Based Fracturing Systems Top View Side View

Reservoir Inflow Effective Fracture Length Propped Fracture Length



No Damage Created in the Near Wellbore, Fracture, or in the Reservoir



Dual Stimulation is Achieved via 1) the Created Fracture and 2) Improved Relative Perm in the Near Wellbore Area due to Propane Miscibility

Propane as a Stimulation Fluid Side View Top View

Impact of Fracture Length and Number of Stages 5 -100’ Effective Frac Length 5 - 200’ Created Frac Length

Top View

Impact of Fracture Length and Number of Stages Acceleration vs. Incremental 10 X100’ Effective Frac Length w/Water

Top View

5 X100’ Effective Frac Length w/Water

Impact of Fracture Length and Number of Stages Acceleration vs. Incremental 10 X100’ Effective Frac Length w/Water Area of Incremental Recovery Due to Larger Effective Length

Top View

5 X 200’ Effective Frac Length w/LPG

Identifying the Optimal Combination of Fracturing Variables ‐ Terranaut Simulator

• Terranaut Simulator Couples Fracturing, Reservoir, and Economic Modeling

into a Single Multivariable Modeling Tool

• Evaluates 100’s of Various Completion/Fracturing and Reservoir Scenarios

Simultaneously

• Identifies the Optimal Combinations Providing the Most Favorable Economics

Source: Schubarth Inc.

Optimization ‐ Less Frac Stages Can Result in More Production and Greater Value

• Over Stimulating (Frac Stages Interfering with each other) is a Waste of Money

and Degrades Project Economics

• Achieving the Longest Maximum Economic Effective Frac Length is Critical to

Attaining Higher Recovery Factors and Returns in Low Permeability Reservoirs

Current Optimized Delta Frac Stages 13 6 7 Less Stages Effective Frac Length (ft) 120 240 120 ft Longer Well Cost ($MM) 6.1 5.2 $900K Less Cumulative Gas (BCF) 4 4.2 200 MMCF Higher Return on Investment (%) 148 182 34% Higher ROI NPV ($MM) 2.9 4.3 $1.4 MM More

Source: Schubarth Inc.

Water Propane

notes

Average Well Costs $million $million

(1,2,3)

Leasehold Acquisition Costs 0.100 0.340

(4,5,6)

Exploration (G&G, exploratory drilling) 0.125 0.424

(7,8,9)

Drilling & Casing (excl. stimulation) 3.800 3.800

(10,11)

Stimulation 1.400 1.970

(12,13,14)

Stimulation Fluids 0.210 0.945

(15,16)

Proppant 0.600 3.000

(17,18)

Water Treatment/Disposal 0.045 0.000

(19)

Propane Recovery 0.000 0.077

(20)

Total 6.280 10.555 Average EUR per well Bcf Bcf Estimated Ultimate Recovery 5.0 17.0

(21,22,23)

F&D costs per unit $/mcf $/mcf Average well costs / EUR per well 1.26 0.62

(24,25)

Well Basis Shale Gas Cost Comparison Water vs Propane Stimulation for Field Development Programs

Stimulation Fluids Page 1 of 2

Notes

(1) These are average costs per well based upon 8,000 acre field development program. (2) (3)

• for water at 25%, and for propane at 85%.

(4) Leasehold Acquisition Costs based on shale resource geologic determination in the region already made. (5) Leasehold Costs - water stim development program - 40 acres/well drainage at $2,500 per acre. (6) Leasehold Costs - propane stim development program - 136 acres/well drainage at $2,500 per acre. (7) (8) (9) (10) Drilling & Casing costs to make the well ready for fracture stimulation. (11) Drilling & Casing - same for water or propane stim - assumes 6,000 ft depth; 4,000 ft lateral; and costs based upon US experience. (12) Stimulation Costs to perform stimulation operation excluding the fluid and proppant. (13) Stimulation Costs - water stim - based on $70,000 per stage for 20 stages per well. (14) (15) Stimulation Fluids - water stim - based on 300,000 gallons per stage at $0.035 per gallon for 20 stages per well. (16) (17) Proppant for water stim is sand - based on 300,000 pounds per stage at $0.10 per pound, for 20 stages per well. (18) (19) Water Treatment and Disposal of returning frac water for 75,000 flowback gallons per stage at $0.030 per gallon, for 20 stages per well. (20) Propane Recovery from flowback and from gas stream of 255,000 gallons per stage at $0.015 per gallon, for 20 stages per well. (21) EUR is the average Estimated Ultimate Recovery of hydrocarbons from each well. (22) EUR for water frac well of 5 Bcf, with 75% of injected water remaining in reservoir. (23) EUR for propane stimulation well of 17 Bcf, with 85% of flowback propane recovery and minimized damage to reservoir. (24) F&D (finding and development) costs per unit of production = average well costs / average EUR per well (25) Subststantial reduction in field development costs attributible to lower number of wells required.

Stimulation Fluids - propane stim - based on 85% propane recovery, with the 15% purchased at $1.05 per gallon, for 300,000 gallons per stage and 20 stages per well. Proppant for propane stim assumes 50% sand and 50% glass beads - each stage using 150,000 pounds sand at $0.10 per pound and 67,500 pounds glass beads at $4.00 per pound, for 20 stages per well. Stimulation effectiveness is determining factor in drainage per well, which impacts average well EUR and number of field development wells needed. ecorpStim premise that low injected water recovery negatively affects fracture effectiveness. While we estimate flowback water recoveries at 20% and project propane recoveries at 95%, for purposes of this analysis, more conservative estimates were used - Exploration Costs include geologic and geophysical (G&G) analysis, seismic surveys, and exploratory drilling to define the development area, prorated among the development wells. Exploration Costs - water stim development program - based on $5 million for field G&G and seismic plus 4 exploration wells at $5 million per well, prorated across the 200 water stimulation wells. Exploration Costs - propane stim development program - based on $5 million for field G&G and seismic plus 4 exploration wells at $5 million per well, prorated across the 59 propane stimulation wells. Stimulation Costs - propane stim - based on 30 precent higher cost than water stim, plus $5,000 for nitrogen for each 200,000 gallons, for 20 stages per well.

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Water Propane Field Development Costs $million $million Leasehold Acquisition Costs 20 20 Exploration (G&G, exploratory drilling) 25 25 Drilling & Casing (excl. stimulation) 760 224 Stimulation 280 116 Stimulation Fluids 42 56 Proppant 120 176 Water Treatment/Disposal 9 Propane Recovery 5 Total Capital Requirement ($MM) 1,256 621 Total Field Recoverable (Bcf) 1000 1000 Average F&D Costs ($/mcf) 1.26 0.62 Total Acres 8,000 8,000 Total Wells 200 59

Shale Gas Cost Comparison Water vs Propane Stimulation for Field Development Programs

Stimulation Fluids

Field Basis

Specialized Proppant Transport Design

Specialized Proppant Transport Design

• Stokes Law
• Key Factors

– Proppant Size Varies as a Square – Fluid Viscosity – Density Difference between the Frac Fluid and Proppant – Stokes Law Does not Incorporate Dynamic Effects Such as Turbulence, Hindered Settling, Wall Effects, Saltation,… Which all Benefits Proppant Transport

• Challenge

– Reducing Grain Size Reduces Proppant Conductivity

Vertical Settling Rate =

• where,

g – Acceleration due to gravity ρ – Density d – Proppant diameter μ – Fluid viscosity

Pure Propane Transport Suspension Velocity

Stokes Equation (Vertical Sections)

Vs =(rhop-rhof)*g*Diap2/18*v

values rhop = specific gravity of particle table (for rhop between 0.50 to 3.0) rhof = specific gravity of fluid 0.51 pure propane Diap = Diameter of particle (cm) table (for Diap between 20 to 100 microns) v = fluid viscosity (g/cm-s) 0.0011 pure propane g = acceleration of gravity (cm/sec2) 980.665 1 centimeter / second = 0.03281 feet / second 1 centimeter = 10000 microns Specific Gravity of Particle (rhop) 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 20 0.0016 0.0032 0.0048 0.0064 0.0081 0.0097 0.0113 0.0129 0.0146 0.0162 30 0.0035 0.0072 0.0108 0.0145 0.0181 0.0218 0.0254 0.0291 0.0328 0.0364 40 0.0062 0.0127 0.0192 0.0257 0.0322 0.0387 0.0452 0.0517 0.0582 0.0647 50 0.0097 0.0199 0.0301 0.0402 0.0504 0.0605 0.0707 0.0808 0.0910 0.1012 60 0.0140 0.0287 0.0433 0.0579 0.0725 0.0872 0.1018 0.1164 0.1310 0.1457 70 0.0191 0.0390 0.0589 0.0788 0.0987 0.1186 0.1385 0.1584 0.1784 0.1983 80 0.0250 0.0510 0.0770 0.1030 0.1290 0.1550 0.1810 0.2070 0.2330 0.2590 90 0.0316 0.0645 0.0974 0.1303 0.1632 0.1961 0.2290 0.2619 0.2948 0.3277 100 0.0390 0.0796 0.1202 0.1609 0.2015 0.2421 0.2827 0.3234 0.3640 0.4046 Diameter of Particle (microns)

Suspension Velocity (ft/s)

Pure Propane Transport Suspension Velocity

Durand Equation (Horizontal Sections) http://sti.srs.gov/fulltext/tr2000263/tr2000263.html

vt = F[2g(s-1)D] ½ (dp/D)1/6

values F = constant between .4 and 1.5 1.5 s = rhop/rhof rhof = specific gravity of fluid 0.51 pure propane rhop = specific gravity of particle table (for rhop between 0.50 to 3.0) D = pipe diameter (in) 6.0 D = pipe diameter (cm) 15.24 dp = particle diameter (cm) table (for dp between 20 to 100 microns) g = acceleration of gravity (cm/sec2) 980.665 0.03281 feet / second 1 centimeter = 10000 microns Specific Gravity of Particle (rhop) 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 20 1.3157 1.8800 2.3104 2.6723 2.9907 3.2784 3.5428 3.7887 4.0197 4.2381 30 1.4077 2.0115 2.4719 2.8591 3.1998 3.5076 3.7904 4.0536 4.3007 4.5343 40 1.4769 2.1103 2.5933 2.9995 3.3570 3.6799 3.9766 4.2527 4.5119 4.7571 50 1.5328 2.1902 2.6916 3.1132 3.4842 3.8193 4.1273 4.4138 4.6829 4.9373 60 1.5801 2.2578 2.7746 3.2093 3.5917 3.9371 4.2546 4.5500 4.8274 5.0896 70 1.6213 2.3166 2.8468 3.2928 3.6852 4.0396 4.3654 4.6684 4.9530 5.2221 80 1.6577 2.3687 2.9109 3.3669 3.7681 4.1305 4.4636 4.7735 5.0645 5.3396 90 1.6906 2.4156 2.9686 3.4336 3.8428 4.2124 4.5521 4.8681 5.1649 5.4455 100 1.7205 2.4584 3.0212 3.4945 3.9109 4.2870 4.6327 4.9544 5.2564 5.5419 Diameter of Particle (microns)

Suspension Velocity (ft/s)

1 centimeter / second =

Heptafluoropropane Transport Suspension Velocity

Stokes Equation (Vertical Sections)

Vs =(rhop-rhof)*g*Diap2/18*v

values rhop = specific gravity of particle table (for rhop between 0.50 to 3.0) rhof = specific gravity of fluid 1.42 Diap = Diameter of particle (cm) table (for Diap between 20 to 100 microns) v = fluid viscosity (g/cm-s) 0.0028 g = acceleration of gravity (cm/sec2) 980.665 1 centimeter / second = 0.03281 feet / second 1 centimeter = 10000 microns Specific Gravity of Particle (rhop) 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 20 0.0002 0.0008 0.0015 0.0021 0.0028 0.0034 0.0040 30 0.0005 0.0019 0.0033 0.0048 0.0062 0.0076 0.0091 40 0.0008 0.0034 0.0059 0.0085 0.0110 0.0136 0.0161 50 0.0013 0.0053 0.0093 0.0132 0.0172 0.0212 0.0252 60 0.0018 0.0076 0.0133 0.0191 0.0248 0.0306 0.0363 70 0.0025 0.0103 0.0181 0.0260 0.0338 0.0416 0.0494 80 0.0033 0.0135 0.0237 0.0339 0.0441 0.0543 0.0646 90 0.0041 0.0171 0.0300 0.0429 0.0558 0.0688 0.0817 100 0.0051 0.0211 0.0370 0.0530 0.0689 0.0849 0.1009 Diameter of Particle (microns)

Suspension Velocity (ft/s)

Heptafluoropropane Transport Suspension Velocity

Durand Equation (Horizontal Sections) http://sti.srs.gov/fulltext/tr2000263/tr2000263.html

vt = F[2g(s-1)D] ½ (dp/D)1/6

values F = constant between .4 and 1.5 1.5 s = rhop/rhof rhof = specific gravity of fluid 1.42 rhop = specific gravity of particle table (for rhop between 0.50 to 3.0) D = pipe diameter (in) 6.0 D = pipe diameter (cm) 15.24 dp = particle diameter (cm) table (for dp between 20 to 100 microns) g = acceleration of gravity (cm/sec2) 980.665 0.03281 feet / second 1 centimeter = 10000 microns Specific Gravity of Particle (rhop) 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 20 0.4553 0.9246 1.2258 1.4664 1.6727 1.8562 2.0232 30 0.4871 0.9893 1.3115 1.5689 1.7896 1.9860 2.1646 40 0.5110 1.0379 1.3759 1.6460 1.8775 2.0836 2.2710 50 0.5304 1.0772 1.4281 1.7083 1.9487 2.1625 2.3570 60 0.5467 1.1104 1.4721 1.7610 2.0088 2.2292 2.4297 70 0.5610 1.1393 1.5104 1.8069 2.0611 2.2872 2.4930 80 0.5736 1.1650 1.5444 1.8475 2.1075 2.3387 2.5491 90 0.5850 1.1880 1.5750 1.8841 2.1493 2.3851 2.5996 100 0.5953 1.2091 1.6029 1.9175 2.1873 2.4273 2.6456 Diameter of Particle (microns)

Suspension Velocity (ft/s)

1 centimeter / second =

Comparing Settling Rates between Pure LPG and Slickwater

Assumptions:

• Pure LPG Density = .54 g/cc
• Pure LPG Viscosity = .08 cP
• Water Density = 1.0 g/cc
• Slickwater Viscosity = 10 cP
• No Turbulent Suspension Benefits

Considered Conclusion:

• Effective Proppant Transport can be

Achieved with Lightweight Proppant in Pure LPG

Pure LPG Settling Velocity Relative to Settling in Slickwater Slickwater Settling Velocity Mesh Size Proppant SG ft/s Mesh Size Proppant ft/s 175 (81μ) Sand 0.1592 ≈ 20/30 Sand .208 ‐ .104 270 (53μ) Sand 0.0965 ≈ 20/40 Sand .208 ‐ .047 270 1 0.0288 ≈ 40/70 Sand .047 ‐ .013 270 0.6 0.0038 LPG is Slower 40/70 Sand .047 ‐ .013 270 0.54 0.000 No Settling 40/70 Sand .047 ‐ .014

Proppant Dimension Considerations

Why Small Grains Can withstand Higher Loads without Failing

Cubic Packing Yields the Highest Porosity thus Providing the Least Amount of Contact Points for Distributing the Load For 30 Mesh Particles

• Dia = .0232” or 595 microns
• Cubic Packing = 1849 grains (432) per in2

For 270 Mesh Particles

• Dia = .0021” or 53 microns
• Cubic Packing = 226,576 grains (4762) per

in2

• 270 Mesh Particles Provide 122 Times

more Contact Points Example at 8000 psi Closure

• 30 Mesh Particles = 4.3 lbf per grain
• 270 Mesh Particles = .035 lbf per grain

Cubic Packing 1” 1” Bed of Nails Principle

www.fugro.com

Permeability &Tri-Axial Screening at Fugro Mechanics Lab

• Capable of 8 Permeability and 30 Tri-Axial Tests

Simultaneously

• Computer Controlled Load Frames and Pressure Pumps
• Multi-Stage / Multi-Direction Tests Performed
• High Confining Stress Capability to 3 MPa
• Un-drained, Drained, Creep, Stress Path & Extension Loading
• Internal Force Measurements

Why Proppants That Did Not Work in the Past Might Work Today

Infinite Conductivity is Achieved as Fcd Approaches 30

Past Reservoirs

Formation Perm = .1 md (tight gas) Frac Lengths = 300 ft Small Size Proppants Perm = 58 md Fcd ~ 0 (no effective stimulation) Minimum Proppant Perm Required for Infinite Conductivity = 100 Darcies (833 md‐ft)!

Today’s Shale Reservoirs

Formation Perm = .00005 md (50 nanodarcies) Frac Lengths = 300 ft Smaller Size Proppants Perm = 58 md Proppant Conductivity = .48 md‐ft BUT Fcd = 30+ Infinite Conductive Fracture (Ideal Fracture Performance)

One Example: High Strength Hollow Glass Bubble

Product True Density (g/cc) Isostatic Strength (psi) Particle Size (microns)

• Avg. Wall

Thickness (microns) 10% < 50% < 90% < Max S60 0.6 10,000 15 30 55 55 1.49 iM16K 0.46 16,000 12 20 30 40 0.72 S60HS 0.6 18,000 11 30 50 60 1.09 iM30K 0.6 28,000 9 16 25 29 0.70

• Non-Crystalline Borosilicate Glass
• Softening Temperature 600 °C
• Water Resistant
• Various Coatings are Available
• Current Oil Field Application in

Drilling Fluids and Cements

• Primarily Used in Injection Molding

as Filler and Weight Reduction

Data and Photos from 3M Advance Materials Division

Conclusions

Pure Propane Stimulation and Non-Flammable Propane could offer a compelling alternative to tradition water-based fracturing methods.

Beneficial Characteristics Should Include:  No water consumption  No water disposal or associated seismicity risks  No chemicals or additives  Fewer trucks and smaller environmental footprint  New proppant designs and improved proppant transport in fracture  Increased fracture length and more complex fractures  Improved relative permeability near wellbore  Increased reservoir recoveries

Business Drivers for Fracturing with Propane / NFP

• 1. Rapidly Achieving Maximum Production Rates

– Minimal to No Clean-Up Period of Non-Hydrocarbon Fluids

• 2. Reducing Negative Environmental Costs and Exposure

– No Water – Reduced Emissions – Less Truck Traffic

• 3. Maximizing the Gas Recovery and Achieving it Sooner

– Larger Effective Stimulated Reservoir Volumes

• 4. Greater NPV’s

– Larger Drainage Areas, Less Wells, Lower Cost to Find and Develop – Competitive Advantage Requirements for Success

• 1. Ensure Safe Operations throughout the Completion Procedure

– Building upon 100+ Years of Propane History

• 2. Job Execution

– Fracture Geometry and Proppant Transport – Flawless Pumping Procedures and Operations – Timing of the Completion Phrasing

• 3. Cost Effective

– Successful Capture and Re-Use

Commercialization – The companies expect to deploy their field services and environmentally sound technologies in Europe, and globally, to develop eCORP’s portfolio of E&P assets as well as to provide the services to any and all third parties. IP and patent filings have been completed for the processes, mechanicals and protocols worldwide.

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