LOW VOLUME SUBMERSIBLEPUMP TECHNOLOGY

MAY 2013

Hygr Fluid System – Principal Components

• Positive Displacement Pump– Operated by hydraulic pressure pulse from surface– Prototypes for SAGD developed

• Umbilical – Current design employs two lengths of coiled tubing or standard oilfield tubing– One connects pump to surface pressure source– One connects pump discharge to wellhead

• Surface Hydraulic Drive Unit– Applies hydraulic pressure intermittently through a closed

umbilical line to the pump– Single or dual acting depending on surface configuration

Performance (Single-Acting)

• 0.55 litres (0.09 gal) /stroke • 5,000 psi - Seals (safe operating)• 8,500 psi - Metal (absolute)• >400 °F available

• 0.33 litres (0.09 gal) /stroke • 5,800 psi - Seals (safe operating)• 17,000 psi - Metal (absolute)• >400 °F available

Capabilities – Casing Pump

• Proven and developed capability to lift up to 45 bpd and operate at depths to 4,000 feet.

• Probable capability to lift up to 150 bpd and operate at depths up to 6,000 feet with development effort.

• Possible capability to lift 50 to 100 bpd and operate at depths up to 10,000 feet with development effort

Through casing pump ready for commercial prototyping

Pump Operation

Casing Pump Design

Casing Pump Detail

• Features split-piston design to eliminate high rate of premature seal failure due to installation damage

• Industry-leading sealing solutions company developed custom seals kit with purposely formulated elastomer

• Hydraulic braking and max 0.005” pump concentricity for minimal internal operating stress

System Summary

• Requires low horsepower to operate and can even be powered by solar energy for very low volume intermittent requirements.

• No sucker rod or tubing wear since there are no sucker rods, and no moving parts in the tubing, resulting in fewer and less costly service jobs.

• Proprietary advancements in seal and elastomer design• Significant efficiencies realized in installation and service

methodologies • PRICE COMPETITIVE

Expected Differentiation - Gas

9

GAS WELL DEWATERING HYGR 3 1/2" IntermittentWater Removal

Total Installed Cost $55,000 - $65,000 -

Annualized Operating Cost (fuel and overhead - lower with solar drive) $2,500 - $8,000 $12,000 - $30,000+

Gas Production(relative to natural decline)

Maximum / Stabilized Along Natural Decline

Declining / Low Average Related to Expenditures

Safety No moving parts at surface

Overhead risks during swabbing

EnvironmentalClosed system, tight

seals, full containment

Frequent spill and methane gas leakage risk

Ease of Operation Fully automated at PLC controller Management intensive

Expected Differentiation - Oil

10

STRIPPER OIL WELL PRODUCTION HYGR 3 1/2" Sucker Rod Pump with Pumpjack

Total Installed Cost $45,000 - $65,000 $32,000 - $70,000

Annualized Operating / Maintenance Cost $2,500 - $8,000 $8,000 - $12,000

Oil Production Stable Stable

Safety No moving parts at surface Overhead risks, moving parts

EnvironmentalClosed system, tight

seals, full containment

Leaky stuffing boxes, messy work-overs, large footprint

Ease of Operation Fully automated at PLC Controller

Manual adjustment of stroke length, Optional controller

CURRENT STATUS

Testing Highlights – Casing Pump

• Pilot gas well programs underway (Canada)– Devon, Apache, Husky, Trident

• Chevron – Pilot candidates being sourced– 2 SAGD systems delivered

• Installation & Service infrastructure established (Alberta, Canada and TX/OK/KA/NM)

• Industry sponsored lab testing for gas well dewatering consortium completed– Field evaluation & data collection June 2013 to validate

our production estimates

Deployment: Trochu, Alberta (July 2012) – CBM DewateringHistory: Low declining production and pressure, clear signs of

liquid loading, required frequent swabbing (limited access during much of year)

Pilot Status: Production 10X and increasing, pressure increasing, additional pilot candidates selected for 2013

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Next Steps

• Seeking funding and/or pilot commitments to support the final development &field testing of through-tubing pump.

This pump will build on proven advancements inseal/elastomer design and gas handling capabilities

• Seeking US industry support with commitments for pilot installations for both gas and oil applications to enable:– Completion of algorithms used for automated pump-off detection– Completion of back-flush system