Advantages of Wireless Technologies

For

Gas Well Automation

Larry J. Compton, President

VECO Gas Technology, Inc.

9000 E. Nichols Ave., #250

Centennial, CO 80112

303-268-3418

February 20, 2006

Complete Production Automation System

Field

Office

VECO Gas Technology, Inc. Page 2 of 7 February 20, 2006

Advantages of Wireless Technologies for Gas Well Automation New wireless technologies can significantly reduce the costs to automate natural gas wells. Wireless connectivity from multiple well sites to a single remote location (over 5 miles away) and the automation of multiple wells and their associated lease equipment from a single Remote Terminal Unit (RTU) are now feasible through the integration of these technologies:

• Spread-Spectrum Radios • Wireless Remote I/O (RIO) Units • Virtual-RTU Hardware • Wireless Field Network

Spread-Spectrum (SS) Radios

SS radios are combined to create a wireless field network connecting multiple wells to a single RTU (Typically < 7-mile range) and multiple RTUs to multiple host computers located in trucks in the field as well as the field office (Typically > 7-mile range).

There are three types of SS radios that can be utilized.

Figure 1 is a small OEM radio. These radios are installed directly onto the RTU boards and remote I/O boards to facilitate communications between the RTU and remote I/O units. Figure 2 is a board-mounted radio that resides in the same enclosure as the RTU board and is connected to the RTU board with a pigtail wire. Figure 3 is a radio in a ruggedized enclosure and typically resides at a host computer in the field office or in a field truck. Radios in Figures 2 and 3 facilitate communications between the RTU and multiple field host computers. All of the radios are 1-watt and broadcast in the 900 MHz range.

Wireless Remote I/O (RIO) units

RIO units, hard-wired to field end-devices at each well site; communicate with a centralized virtual-RTU system to facilitate the monitoring, measurement and control of natural gas production.

Figure 2: Board Mounted

Figure 1: OEM

Figure 3: Self-Enclosed

VECO Gas Technology, Inc. Page 3 of 7 February 20, 2006

RIO type #1 units are installed next to 3-in-1 transducers at well meter runs and provide remote gas well production measurement only. RIO Type #2 units are installed next to the wellhead, connect to tubing and casing pressure transducers, plunger arrival switches and choke valve or solenoid valve actuators. They provide remote gas-well production measurement, well and lease equipment monitoring and gas well control.

Virtual-RTU Hardware Typically, conventional RTU boards are connected to devices on a single well. The I/O capabilities are limited to the hard-wire connections available on the board.

A virtual-RTU board is identical to a conventional RTU board except that an OEM radio is attached directly to the board. This radio communicates to remote I/O devices and significantly expands the I/O capabilities of a conventional RTU board. Multiple wells are connected to one virtual-RTU board and virtual-RTUs are created in a virtual-RTU software package. To a user, a virtual-RTU performs in the same way as a conventional RTU.

o RS-232 connector o RS-485 connector

Figure 4: RIO Type #1

Figure 6: Conventional RTU Typical I/O Capabilities

o Digital / analog inputs o Pulse rate / pulse counter inputs o Digital to analog outputs o Digital outputs o RS-232 connectors o RS-485 connectors o USB connectors

o Digital / analog inputs o Pulse rate inputs o Digital outputs o RS-485 connector

Figure 5: RIO Type #2

VECO Gas Technology, Inc. Page 4 of 7 February 20, 2006

Wireless Field Network A wireless field peer-to-peer network is created in software by utilizing the previously discussed wireless technologies. These technologies provide real-time monitoring and control of all wells and their associated lease equipment in a field from any host computer with access to the network. Any PC with the appropriate security rights can be connected to the network. There are multiple access points to the field network as indicated in Figure 8:

• Computers directly connected to the field local area network (LAN) • Computers connected to the field LAN through the internet • Computers accessing a field modem via a phone-line • Laptops in trucks connected to the network via truck-mounted radios

Figure 8: Wireless Field Network

Figure 7: Virtual RTU

Expanded I/O Capabilities Typical I/O capabilities of a conventional RTU plus additional:

o Digital / analog inputs o Pulse rate inputs o Digital outputs o RS-232 connectors o RS-485 connectors

VECO Gas Technology, Inc. Page 5 of 7 February 20, 2006

Virtual-RTU System

A typical conventional RTU setup includes an RTU board mounted in an enclosure with a spread-spectrum radio and backup battery. The enclosure is mounted on a tower stand with an antenna and solar panel. One of these units is required for each well. In contrast, the virtual-RTU system (VRTU) consists of a single board and software. The system is designed to allow users to create “virtual” RTUs in software that automate multiple wells and their associated lease equipment from a single board. The wireless VRTU system shares a single RTU system among several wells. The single virtual-RTU board communicates to remote I/O devices located at the remote wells. The system then automates the multiple wells through virtual-RTUs created in the software.

In Figure 10 below, the OEM mounted radios are depicted as yellow. The range for these radios is usually less than 7 miles. The board-mounted and self-enclosed radios are depicted in blue. The range for these radios is usually greater than 7 miles and less than 25 miles.

As stated above, a virtual-RTU acts in every way like a conventional RTU. A VRTU is not just an I/O extender, but acts as a fully functional conventional RTU with gas well flow measurement, production monitoring and gas well control functions, but has the following advantages.

Figure 9: A Typical Conventional RTU set up.

Figure 10: Wireless-Virtual RTU Technology

VECO Gas Technology, Inc. Page 6 of 7 February 20, 2006

Advantages of Virtual RTUs The financial advantages of the wireless virtual-RTU system are significant. There is no longer the need for a conventional RTU system (RTU hardware, power and communications equipment) at every well. The cost of a typical conventional RTU system can be shared among multiple wells. For example, 4 wells sharing the same RTU system will reduce the per well RTU system costs by 75%. Of course, there are additional costs for remote I/O devices, but these are usually more than offset by the reduced costs of installation. The costs of excavation around each well, long-distance trenching and under ground wiring are minimized or eliminated. Also, induced transient currents in long cable conductors can often damage end-devices and RTU boards. These currents are eliminated thereby enhancing the system reliability. In addition, the virtual-RTU system improves operations productivity by providing field personnel with multiple access points to the wireless network including access from a PC in a truck.

Added Complexity and Costs

While the wireless virtual-RTU concept reduces the hardware costs, it does increase the software complexity and costs. Software is required to utilize the wireless technologies and additional software is required to create a complete production automation system.

What Are The Steps to Creating A Complete Production Automation System? The following pieces of the “puzzle” are required for a fully functioning production automation system. Step 1: Merge the various wireless technologies:

o Spread-spectrum radios o Remote I/O devices o Virtual-RTUs o Field wireless network

Step 2: Connect to the various 3rd party components required to make a working system:

o Instrument end devices o Communications equipment o Solar power equipment o Electrical and mechanical systems

Step 3: Interface with end-user systems by using open standards and/or developing custom drivers to connect to:

o Legacy hardware o Enterprise software o Business systems

Merge Wireless Technologies

Connect to 3rd Party

Components

Interface w/ End-User Systems

VECO Gas Technology, Inc. Page 7 of 7 February 20, 2006

Step 4: Integrate multiple functions including:

o Custody transfer EFM o Well controller/optimizer o Communications system o Multiple host software package

The ultimate result is a complete production automation system. The glue that holds all of the pieces of the puzzle together is software and it is the software that allows the use of the powerful new wireless technologies to create a production automation system that will bring value to the entire production organization (personnel in the field as well as the office staff).

Integrate Multiple

Functions

Connect to 3rd Party Components

Interface w/ Customer Systems

Merge Wireless Technologies

Integrate Multiple Functions

Figure 11: The Production Automation Puzzle Solved