The following material was emailed to us byDavid Mallardof Microfrac Technologies Corp.AnaLog Services, Inc.has no economic interest in Microfrac, and we make no representations as to the accuracy of the material on this page (we have verified nothing on this page). Minimal spelling and grammatical corrections have been made, but we lack the time to properly edit this material.From: Beth and David Mallard To: syd levine Sent: Wednesday, November 01, 2000 6:31 PMSubject: MICROFRAC QUESTIONS

Microfrac Technologies Questionnaire

[Introduction deleted.]

Procedures and Wireline Service Company Questions:

1. Describe the tool and propellant. How can we prove that this propellant is an improvement over what has been used in the industry? Is it a vast improvement or just a tweak of what has been out there?

Currently the tool is in the third phase of development that has taken over five years of R&D to develop. The dynamics of our tool out shines all other attempts at developing a High Energy Pressure Frac for use in oil and natural gas recovery for the following reasons: (1) Our research team just won a $6 million dollar Navy contract to evaluate and assist major military contractors like Thiokol, General Dynamics, and Raytheon, which contractors recently blew up 56 artillery pieces in a futile attempt to launch a 105 cannon shell 90 miles (historically shells fire at 18 miles). Our scientists were able to launch their first shell 93 miles by developing a sophisticated rocket assist unit, which did not explode when the shell was fired. To date our team has completed 38 successful test firings and have reached a distance of 138 miles. While this example may seem unrelated to down hole performance, and fracturing it is not, billion dollar companies with tremendous resources were unable to complete this task, as they have been unable to develop as much controlled power and thrust, as we have in our MICROFRAC X-2000 down hole-tool. (2) There exist thousands of combinations of chemicals, but we have 8 formulas that really work. [Unverified assertions about competitors deleted.] (3) All other types of down-hole pressure fracs have 25% of the power curve we have developed; not all tools are the same. (4) While our competition is playing with VWs, our system would be akin to a racing Turbo Porsche. (5) The base tool is 2 inches by 17 inches. 2 Grains loaded in a 10 foot hollow carrier make 1 tool. Each Grain will cover a 5- foot pay zone. Tools may be divided into 1 grain shots for smaller pay zones, but for marketing purposes 1 tool must always equal 2 grains. (6) In the final analysis, customers are focused on potential results. In recent tests, with Thiokol scientists present, we saw physical communication with an adjacent sister well some 1,250 feet away in a Tennessee Limestone bed at 1,600 feet. Other chemical base pressure tools are advertised as developing energy releases to 60 feet, if that. (7) Our early tests in Casper, Wyoming, produced a production curve registering 22:1. Before releasing our energy, the well was producing 1,250 barrels of fluid per day. After we shot a 10 foot zone and a 20 foot zone production dramatically increased to over 24,800 barrels of fluid per day. Some five months after that demonstration, the test well is still holding at 19,000 barrels of fluid per day. A complete DOE report should be made available to all interested customers. (8) The fracturing benchmark for most contemporary fracturing methods ranges from a 200 to 300% increase. Lighter rock formations, like shale, tight sandstones and methane coal-beds will stay open longer than heavier rock formations. (9) As a rule of thumb, our system should out gun other attempts at this technology 3:1; however, we cannot predict the outcome of any well situation or promise results, as each formation and well history is widely different with many variations, which make it impossible to guess or guarantee.(10) Our early tests indicate we are way beyond just a tweak. Several countries have had their engineering firms review our technology, and contracts are forthcoming for entire nations and their national oil and gas reserves.

2. Is the propellant placed in a canister? Just what are the components of the tool?

We can deliver the tool into the well bore via a hollow carrier, which must be watertight at deeper levels. This is helpful in that the carrier acts as a container to harness all the energy and direct it horizontally into the pay zone. We have also been improving several other systems to accommodate shallow wells, using a light weight fiberglass carrier joined to an ignition stem, which allows for maximum energy releases, avoiding loss of wire line and damage to well casing. Please note that well selection is important (wells that take a lot of water, over 1,000 barrels per day are thought to be already open). We should be looking for wells that have tighter porosity and permeability in the under 18 milidarcy range. The tools are cylinders of complex energetic materials. The formulas are secret company property and will not be disclosed. We have engineered a chemical mask so that no amount of spectra-analysis can determine the formula.

3. Who needs to handle and load the tool?

All field wire line services will need an ATF license to handle the tools.

4. What tools go down the hole? GR, CCL, Canister

The tools can be designed to accommodate a wide variety of well bore situations from smaller pay zones of 4 feet to large 100 to 300 foot pay zones. Delivery has become an important part of the equation for safety and optimum results. Wire line companies who desire to work the Microfrac tool must pay $1,000 [sheesh, editor] for a short course in proper down-hole delivery of the tool. A teaching video is in the works. Our engineers will recommend the proper number of tools and their mode of delivery into the well bore. There are so many variations and needs requirements, that at this writing each well must be individually evaluated to formulate the number of tools needed to service the well and the custom carrier designed for the job. Right now we have a hollow carrier format, providing the well bore is 5.5 inches or greater. We can join a number of tools in a string to service a greater pay zone and we have a light-weight fiberglass water proof carrier complete with a hot rod connection for perfect ignition. In one of our recent tests the force of the suction was so intense a inch solid steel connecting rod 2 inches in circumference, collapsed to an 1/8th inch opening (another incredible Microfrac first!).

5. What type of wireline cable is required?

Standard wire line cable is okay. The tools are lightweight. A 10 -foot hollow carrier, filled with frac sand and 2 grains of our tool will weigh less than 200 pounds.

6. Can slickline be used?

Yes, slick wire line is okay, as long as it will support the rated weight of 200 to 300 pounds.

7. How is the canister/tool physically and electrically attached to the wireline? Is it a normal oilfield procedure, or are there special instructions we will have to supervise with each service company?

We have developed several ignition systems with the assistance of Well Services in Crossville, TN. The wire line operators will connect their normal firing wire to a fireplug, detailed in the operator's guideline handbook. Additional firing systems are being evaluated; however, Well Services will be happy to advise other wire line operators. Note: Most operators are aware of basic firing procedures for perforation guns; the system is similar.

8. Can we design the tool so that it can be easily handled by the wireline company when it is attached to their tools?

Our Microfrac tools are universally designed to be used by any wire line service rig on the planet. Any decent wire line crew will have no problem using this tool in the field with just a little coaching from a telephone consult, video or instruction guide line, being developed by Microfrac.

9. Will a wireline company have any liability and safety problems running the Microfrac tool?

Most small and independent wire line service companies carry $2 million dollars in personal injury and well damage coverage. These coverages are normal and will be more than sufficient to offset risk and use.

10. How is it fired from the surface? Is it a normal wireline electric command from the truck or will they need special equipment and instructions?

Wire line trucks are outfitted with normal fire wire capability. When they lower our tool to the desired depth, they set and push their firing ignition system. An electrical current races through the inside of the wire and sets off a small blast, which in turn ignites the tool. Please note our tools DO NOT EXPLODE!!! They ignite and generate a massive energy pulse wave that slams into the formation rock at 22 miles per second, loading the rock with more energy than the rocks can absorb, thereby fracturing the surrounding formation in a radial fashion. This pulse wave has 4-5 energy cycles. The energy cycles closest to the well bore mouth are the strongest. As the energy moves through the rock and around the rock, it loses it's intensity the farther out it goes from the ignition site (the well bore).

11. What is the best method of igniting the subsurface tool; primer cord, blasting cap, or by another method?

The best method of igniting the tool is by threading 100-grain deflagration fire wire cord by hooking it to the wire line firing wire system with an electrical system called a bobby pin. 80-grain det cord has been successfully used, but it tends to chunk out the tool and lessen the results of the frac. By staying in the ignition loop, our engineers have created a full 40% increase in efficiency.

12. What is destroyed or damaged? Canister, wireline tools, wireline?

By using the hollow carrier, with 4-10 holes per running foot, providing the hollow carrier is thick walled inch steel, no wire line should be lost. The 2 grains convert to hot gases and are loaded into the formation pay zone thereby fracturing the pay zone and melting migrating fines and paraffin wax clogging the perforation holes. Once new pools of energy are stimulated, energy in the form of oil or gas or methane gas begins to flow again. This is the whole reason behind the secondary recovery effort. NOTE: It is worth noting that no well ever runs dry. Most wells retain up to 70 to 85 percent of their reserves! The challenge is to stimulate these wells to optimize the recovery. Most wells will only give up 30% of their reserves. Any effort to increase the recovery up to 40-50% will be well received in the oil patch. Our tools are an economical and efficient solution in the over all recovery effort.

13. Can we prove to the wireline company that we will not destroy their wireline or sub-surface tools?

Yes, providing they listen to our wire line advisors and follow our instructions. We have already bent the learning curve and they will profit from our collective experience, if they listen and follow our tried and true methods.

14. If there is any damage who is liable to pay for the replacement?

Liability issues fall with the well operator and the wire line operator. Once we deliver the tool they are on their own. We are no different than any other well services company in that respect. Old well casings or casing that are not properly cemented must be avoided. Shooting wells that are near underground water tables must be closely analyzed. Along with well histories common sense must be applied to every well setting. Many potential problems will be avoided, if everyone looks before they leap into a completion situation and follow our instructions. Greed and taking inappropriate short cuts must be avoided and in so doing "train wrecks" will be few and far between.

15. Is there any junk left in the hole or trash that will need to be recovered?

It is possible in a misfire to occasionally lose an entire tool. In most cases, there is minimal debris and tools or connecting pieces can be fished out. Most wells are designed with 30-40 foot rat holes for any unwanted junk that falls to the bottom of the well.

16. How much fluid in the wellbore is required to be above the tool? Is it a hydrostatic safety precaution, an energy absorbing technique, or a surface safety factor?

In most gas well settings, we only need a water block that will offset bottom hole pressures, formation pressures, which will widely vary from well to well. In oil wells we need to use a diesel block, which will decrease the swabbing unit time at the well. For safety's sake a good water or diesel block will help direct the energy outward, not upward, and depending on the depth of the pay zone, a water block can be installed to within 200 feet of the ground. Hydrostatic pressure will keep oil and gases from exiting the newly fraced well until they are removed. A good rule of thumb is that hydrostatic weight is equal to of the distance of the column of water or fluid. If we were working at 6200 feet, the hydrostatic pressure bearing down on the release of the new energy trying to surface is 3,100 pounds. This weight must be removed before the oil well is put on pump or we can get an accurate picture of the true gas flow in the recovery effort. A hollow carrier could withstand pressures of 9,000 pounds working at a depth of 18,000 feet or 3 miles below the surface. Warning: All port plugs must be absolutely water-tight!!!

17. Is there a recommended or minimum hydrostatic head needed to safely use the tool? Why?

The minimum head should be equal to the bottom hole pressures. Bottom hole pressure is 2,000 pounds, at 5,000 feet of depth, we should develop a 4,000 foot fluid block, which would give us 2,000 pounds of hydrostatic pressure. Why? (1) We want the force of the energy to go outward not upward. (2) We want to contain any upward surge within the well bore so no spillage occurs around the surface of the well.

18. Does it matter if the fluid pad is water, oil, acid or other?

The block should be water for gas and methane wells, and crude oil or diesel for oil formations.

19. Can the wellbore be empty?

Yes, I have read of dry shots, but they are rare and much more dangerous and more difficult to fire the tools remotely underneath a wire line block. We would not want a steel block to become airborne and land on anything.20. Will part of the fluid pad be vaporized when the tool is ignited?

Not enough to worry about. Temperature is approximately 5300 degrees F for several moments after the shot.

21. Can we stimulate under a packer and tubing?

No. It has been tried and in each case you end up losing the tubing; you have to pull it and replace it. So why not just spend the extra $2,000 and get it out of the way before you begin.

SAFETY

22. What service, design, guarantees, training and technical help can we get from you as we sell this product and get it into the field?

We will offer a 100% replacement policy, providing the tool, for whatever reason, fails to ignite. The catch is that the customer will need to ship it back. If a tool is lost down hole, that issue will fall upon the wire line service company. If the tool does not return to the surface 99% of the time it ignited. We will offer regional training via video training and encourage all sales people to visit a local shot to actually see the well site and become familiar with all of the well equipment on the job.

23. Is there a safety manual or a Standard Operating Procedure?

We are developing a safety manual and this document will become part of it. We will send a complete outline later.

24. What do we do if the tool does not ignite or part of it comes back out of the hole?

Again if they can produce a dud or part of a dud, we will replace the tool(s) as soon as they become available. At some point it is our intention to stock pile for situations like this, we are not at that point yet.

25. What federal, state, explosives or transportation permits are required to transport and store the tool?

Become familiar with ATF guidelines, your sales group will need to work under a distribution license and will be required to have access to a Class One Storage bunker, even if you do not use it. On our liquid- frac none of the above licenses will be required, however it may be several years before we offer the new generation to the customer base.

26. How is it safely transported, and does it go to a service/storage center or to the wireline camp?

In transportation matters, we have developed the first exception to shipping requirements. If we restrict the number of grains to 4 per box, less than 12 pounds, we have a permit that will allow us to ship UPS ground anywhere in the U.S. (3 DAY). For $38.00 per box. Otherwise anyone else would have to ship with a licensed dromedary 18 wheeler from 1 -2500 pounds at, depending on distance $1,250.00 per 2,500 pounds of Class 1 explosives.

27. Who loads the tool?

All Microfrac Tools should be loaded and set up by a licensed and trained wire line company owner or skilled employee. Part of their overall bid should include this minor assembly. If they know what they are doing it should not take more than 30 minutes per 2 grains or 1 tool.

28. Who attaches the tool to the wireline company tools?

The wire line company always makes the connection to our tool/hollow carrier. Remember they are used to attaching their wire line to perforator guns, that's how they make their living, day in and day out.

29. How do the tools and wireline react when the tool is set off? Can the wireline jump up and loop around itself?

If the tool is set up properly there may be an instant where the line pulls downward as the energy is released. The weight of the hollow carrier will keep the line from snapping back. We have had shots in the early development stages, where some line curled and we lost 300 feet. But that was 2 years ago. Since those days we have perfected the delivery system.

30. What accidents have there been?

Over the years mishandling this type of energetic material has killed several people. Extreme care must be taken. One gentleman was killed because he tried to force a tool into a well bore that was too small and started beating it with a hammer. On the third strike he went to see God in a million pieces. However, most of the five deaths were as a result in grinding the energetic materials to smaller micron size. It is in the mixing and grinding work at our laboratories where 98% of the risk is found. Hence the cost rise in the technical labor needed to mix and grind these materials. Also the materials are in short supply, but we have grand fathered guarantees that will assure Microfrac can move forward in building and delivering these tools.

31. Does the top of the well have to be open to the atmosphere or can we have it closed in?

You must never close a well bore or seal it off at the top! One of our recent customers did this and damaged his well casing when he went against our instructions. To pull and replace and cement a 2000-foot string of 5 inch steel casing can cost $20,000 or more, depending on the depth of the damage. Casing can also be cut and be replaced by a section of 30 feet, but do not go there and warn your customers and wire line people to do this work at our direction.

32. If the well must be left open how do we handle pressure at the surface when trying to get the tools out of the hole?

Depending on the depth of the pay zone and the length of the water-block, the hydrostatic pressure will not allow much of an upward thrust of fluid. Also we must remember that the same weight factor will block any renewed stream of gas and some cases formation energy. Unexpected oil flows will also block new streams of natural gas. In every case, the well bores must be swabbed and put back on pump as soon as possible.

STIMULATION

33. How can we best describe the downhole action to impress the well owner that we have something he can use to improve his production?

In most cases cost is an important element in developing a complete stimulation treatment. Remember, as a backdrop that all forms of stimulation rely on energy deposits being present in the formation. In High Energy Gas Fracturing only approximately 75% of good candidate wells respond to High-Pressure stimulation. Having said this, HEGF is and can even be more effective than a hydraulic water or sand frac for thousands of dollars less. It is quick and easy. All wells should be perforated at least 4-6 inch shots throughout the pay zone. A wire line crew can set up to shoot one well in less than 2 hours. There is minimal swabbing; hence the well can go back on line much quicker. Because our HEGF is the most powerful pressure frac of its kind, if the energy is there odds are good that our system will increase production.

34. Is it true that the tool uses a quick burn to generate high pressure gases that quickly expand and overcome the fracture strength of the formation?

Just the opposite. Our tool in 1.5 to 2 seconds is considered a slow burn. The energy pulse created by just the right amount of chemical combination in the burn creates a jet stream so powerful that it overcomes the tensile strength of the rocks in the formation thereby generating a wave of multiple fractures in a radial pattern throughout the pay zone.

35. What are the gases?

We can not release any proprietary information.

36. How much pressure?

We are evaluating this information, but for general purposes, our engineers and scientists are saying more than double or (40,000 psi) directed into the pay zone at the moment of release.

37. How can we generate enough pressure/force to fracture the formation but not overcome the burst strength of the casing and the cement sheath between the casing and the formation?

Providing the casing has been properly installed and cemented, the quickness of the burn will not do any damage. Remember our tool transforms from solid to powerful gases, it does not nor will it ever explode down hole.

38. Is the energy direction controlled to go horizontally? How do we prove it?

Yes. When carried to the pay zone in a hollow carrier, which has a top and a bottom, the energy must escape out the jet-ports, designed to give way under pressure.

39. How can we prove the pattern of the stimulated reservoir? Is it a conical shape or a does the cone build and then dissipate to a point? Can we show that after the stimulation enters the perf that it doesn't angle down into unwanted water reservoirs?

In physics, the release of energy will follow the layered rock upward, straight, or downward however the rock was formed, until after 4 to 5 energy releases, the thrusting and fracturing experiences a diminishing power curve.

40. How far out horizontally does the stimulation affect the reservoir? If it depends on rock properties, is this taken into consideration when the tool is designed?

The horizontal thrust in Tennessee was observed at the next well over, which was prepped and uncovered, with Thiokol scientists present. The following day the same event occurred going to the first well, which we left uncovered. The measured distance was an amazing 1,250 feet. Most HEGF contemporaries struggle to send their wave 60 feet. Clearly Microfrac tools are the most powerful instruments available today in the oil service industry. This test was conducted in Limestone at 1,600 feet in depth. Coal-beds, shale formations and tight sandstone formations, where the perms are tight and the porosity is less than 18 milidarcy should be excellent candidates.

41. How can we show or prove it has this much reach into the reservoir?

Today we have eyewitnesses and signed affidavits. We are scheduling seismic sensors on new demonstration well sites, which maybe able to pick up readings at depths of less than 6,000 feet.

42. A hydraulic frac stimulation produces a fracture perpendicular to the plane of least resistance. Does Microfrac have the same result and also produce fractures in the other planes? If yes how can we prove this?

A Hydraulic frac will pick the path of least resistance and open along one or two elongated fissures. In the Expanded Technical Resume there is a long comparison between the two systems. Pressure fracturing will always generate many more multiple fractures because of the dynamics and the turbo-shock waves released into the pay zone. On proving up any technology, except penetrators, which can be objectively measured at surface, all modes of fracturing must be measured by their performance and the duration of the increased flows of energy, and increased deposits in the well owner's bank account.

43. How do we prove that the energy pulse or expanding gases don't go up and down in the casing, where the only resistance is a hydrostatic column of fluid?

In some cases, depending on the mode of delivery of the tool, a small percentage will go up the well (12% maximum), however there are methods of delivering the tool into the well bore that can effectively cut this loss to 3 % or less by using a sealed hollow carrier.

44. Does the stimulation damage any down hole conditions such as squeezed perforations, cast iron bridge plugs, open perfs?

In the Wyoming test, we fired 2 separate pay zones 200 feet above a newly installed bridge plug and noted no damage to the cast iron plug, whatsoever. Normally the new energy opens clogged perfs it does not further squeeze them.

45. What is effective treatment of the reservoir for a typical length of the tool?

Ideal coverage is 5 foot of pay zone for each 1 grain used in the stimulation effort. For example, in trying to treat a 100 foot pay zone, one would employ 8 ten-foot hollow carriers spacing them 3-5 feet apart. Be careful to limit the number of 10 foot tools to 3 on any one string effort. Start at the bottom of the zone and work your way up to the top of the pay zone.46. Can more than one tool be run at a time on the same wireline run?

Yes, but no more than 3 tools.

47. When the multi-tools are ignited, do they fire all at once or does the bottom tool set off the tool above it and so on?

It will depend on where your wire line company sets the blasting cap igniter. The ignition sparks at 22,000 feet per second thereby igniting the whole string pretty much at the same moment.

48. The Barnett shale is 300' thick and all of it is considered gas productive. What is the recommended amount of tool to run? Cost?

24 to 25 tools, starting at the bottom of the pay zone and working your way to the top of the zone. Using same rigging instructions as detailed in #45.

49. Would the tool work better if the 300' reservoir was an open-hole completion?

No! You must always develop perforation holes to expedite the initial surge of gas to the pay zone!

50. How much tool for a 10' reservoir? Or less than a 10' reservoir, especially where the hydrocarbons are on top of water?

If there are ground water tables or pools of water, extreme care must be taken to stay at least 200 feet above the water zone and within 1400 feet of any hidden underground water tables. Number of tools needed in a 10-foot zone is 1 complete 2-grain tool.

51. A reservoir is 100' thick with the bottom 20' having good porosity and the top 20' having good porosity. What is the recommended treatment for these 40'?

As a rule of thumb, if a well is in a reservoir where it is difficult to maintain a good water block (in other words the well is already open, pass-by the candidate well and save your client the expense).

52. What questions do we ask to design the right tool for the right application?

Right now we have developed an all-purpose tool. The Question is more one of is the well site able to hold a water block? Have the correlation logs been thoroughly examined by professional Geologists. What is the history of the well and surrounding wells? What was the initial flow of oil or gas (ip) and what is its decline curve. Have any new feasibility studies been conducted and what are the reasons for selecting this well over other wells of promise. The more current information made available to us, the better well service judgments will be made in the best financial interest of the client.

53. Has the tool ever failed to increase production?

Twice, in Texas, when an operator failed to follow instructions and capped the top of the well. Then again when the same operator used three of our largest tools and pulverized a 10 pay zone, thinking the tool had not ignited, when in fact it did go off with great power.

54. Is the application designed for rock type, casing size and weight, number of perfs and size of perfs?

One size and strength fits all right now. We are developing advanced technologies, but it may be another 5-6 years to the marketplace.

55. Are rock properties analyzed for the right design? Such as tensile strength, porosity, natural fractures, laminations, fluid filled porosity?

Yes, we encourage the client to have the well(s) and his formation studied and analyzed by licensed Geologists, that burden is entirely up to the client. Most wells come with good histories. In 2 recent field studies, our field engineers were able to locate over 1 million barrels, hidden below rigged wire line blocks that hid these deposits. In another case study, our engineers found 500,000 barrels behind the pipe, where previous promoters perforated the wrong zones in an effort to defraud investors and hide major oil deposits. Often fields are set up in such a way that they are pumping way below their optimum. In the future we will offer reservoir analysis as a service to the customers. Our field engineers and Geologist have a combined field experience and knowledge of oil and gas of over some 125 years of making the right choices.

56. Does the stimulation damage the casing or perfs? This has been addressed.

57. Is the theory that after ignition expanding gases go through the perfs and fracture the rock or is it a mechanical pulse (like a big hammer blow) that fractures the rock?

It is a energized series of powerful energy waves that load the rock, quicker than the rock can absorb the energy, thereby fracturing the rock and creating to some extent its own proppants, to assist keeping the fractures open longer.

58. Are there volume discounts for manufacturing the tools? Can we pass on attractive discounts for a 10 well program or a 100 well program?

Right now there is a shortage of material and an increasing demand for the tools; we do not offer discounts. The tools are already priced at an excellent price point compared to the potential return. Companies discount merchandize they have a hard time selling it, this is not our problem at this moment.

59. If we had an order for a job today, October 25, how long would it take to get a tool on location in North Texas?

There is approximately a three week turn around. It takes 3 days to mix and cast a batch of tools and another 10 days to cure the tools. After the process is complete, UPS takes 3-days to deliver anywhere in the Continental United States. Weather, order number and volume all play a role in the time factor.

60. How long would it take to store tools for a 10 well program?

The suggested route for a 10 well or greater program is to order the entire job and secure it with proper deposits. We have some limited storage available for 30 days maximum.

61. How can we realize a benefit from having a relationship with Schlumberger? Does one of their camps have more of a benefit than other areas of the country?

We will soon look like and smell like a 15 billion dollar oil service company. It can offer any of the service internationally and domestically on medium to larger projects that may require seismic analysis, drilling, and wire line services, over 100 services. We strongly advise your that team become familiar with the variety of services offered by this giant company. We will be using their services exclusively in three international settings where the country wants to deploy our Microfrac tools. Assume your client needed to drill 10 wells and agreed to contract with Schlumberger.

62. Why would Schlumberger help us run the tool when Microfrac competes with their stimulation tools and with Dowell's fracture services?

They may or may not depending on the size and competitive price of the winning bid on the contract. There will be many options for the client to not only give them superior service, but also better pricing for the best job available. Good results come from good information and complete service, not cutting corners. Most operators want to do the job right and have completion funds to correctly execute their energy project.

HISTORY AND RESULTS

63. Can we have the Department of Energy test results and opinions?

Yes, I believe you have this report. As other tests occur we will try to make additional case studies available.

64. Are there any Society of Petroleum Engineers technical papers on theory of the use of propellants? Any papers on case histories? We would like to write and submit lots of success stories.

Yes, 15 different organizations. Investigate the Internet. Currently, Microfrac has anarticle appearing in the Petroleum Technology Transfer Council's "Network News" 3rd quarter edition, second page. Contact: PTTC, 1101 16th Street NW, Suite C, Washington D.C. 20036-4803, phone 202-785-2225, Lance Cole, Technical Advisor. We are also invited to place an article in World Oil, December edition. The circulation is 9,000 oil and gas operators and 30,000 operators respectively. The trade papers are sources for excellent leads and networking contacts. Books and articles measure in the hundreds, if you want to spend some time researching the subject in the library. The more information you have in your tool bag, the easier it will be to close the big sales.

65. Where has the tool been used in the oilfield and with what results?

In Kentucky, 27 of 29 wells were stimulated to a positive 1,000 percent increase across the board lasting some 14 to 18 months, in shallow 800-foot oil in Dolomite.

66. What non-oilfield applications are there?

In Tennessee, one well went to 19 barrels of oil up from 1 barrel per day in a blanket formation. The pay zone was 1650 feet in a Limestone formation. Wyoming reservoir, we fraced a 20 foot and a 10 foot zone, lifting daily production from 1,250 barrels of fluid to 24,800 barrels of fluid per day. The well held for 60 days, then dropped to 19,000 barrels per day and held another 60 days, then last week dropped to 10,300 barrels per day for 45 days and still holding. Total number of new barrels delivered after treatment over the last 165 days is 3,073,500. Because of this spectacular result, the DOE is expanding our original $300,000 grant to do more testing next year.

67. Has the stimulation ever not worked? Already answered this question.

68. Has a wellbore ever been lost? Already answered this question.

69. Is the best application been found to be as a new perforation breakdown stimulation, to open up new perfs?

Perf's are necessary for this stimulation procedure.

70. Has the tool been used in coal-bed stimulation?

We are contracting to shoot coal in Alabama and Virginia in the near future. Right now Halliburton is fracing coal wells with small hydraulic treatments for $35,000 per well, and opening wells to 200,000 MCF for 1-2 years. We think our efforts will do better for half the price.

71. Is the tool/propellant temperature sensitive?

Yes and no. Temperatures play more of a role with fiberglass carriers. They will have little effect when hollow carriers are deployed. Generally temperatures are below 300 degrees in most well bores.

72. Does the stimulation make its own proppant to keep fracs open? Can it be so fine that open fractures will heal on the crushed material and have a better path to the wellbore, or can the crushed rock be so fine that it will cause the perfs to be clogged up?

Yes in shale, and we believe in coal seams, and lighter formation rock, the power of the energy will tear small pieces of the formation rock and develop its own proppants. Currently we are examining the possibilities of using a round "ferro material" in the carrier tubes and above the tool carrier, which will be sucked into the formation when the energy rockets through the formation rock. The rocks will crack under pressure, not heal. If the ignition is developed with deflagration cord instead of 80 grain Det cord, the overall performance will increase by as much as 40% over current results, which should average 300 to 1,000 percent or greater.