Sigor CorporationSigor Corporation

Sigor Corporation is seeking to sell its services on wider scale to increase company's profit and contribute to the effort to lower gasoline prices by lowering the cost of oil and gas extraction and increasing over-all productivity of oil and gas wells.

HistoryHistory

Sigor Corporation was established in 1991 by Igor Skakovsky, the current President/CEO, as an analytical laboratory for applied sciences, technologies transfer and its management. During the period from October, 2000 through October, 2003 Company transformed itself into worlds pioneering R&D laboratory in rock mechanics and provider of innovative well stimulation services.

HistoryHistory

In 2003, after series of Company’s successful laboratorial tests, plus production stimulation of 103 oil, gas and irrigation wells, Sigor Corporation

acquired 40 years worth of technical data with agreement of scientific support from its Ukrainian collaborators.

Same year Sigor Corporation began commercialization of developed technology by

marketing its services under Trademark of SWTorpedoTM.

Company TodayCompany Today

Sigor Corporation's high quality well stimulation services SWTorpedoTM (Shock Waves Torpedo) offers cost-effective recovery of hydrocarbon by providing significant, stable-over-time spatial changes in the rock permeability and predictable increase in productivity for more then 300%.

Company TodayCompany Today

As all members of SWTorpedoTM family SWT-GUARANT, SWT-OPTIMUM and SWT-ECONOM

uses dilatant technology and is designed individually for each well to increase permeability of the producing interval.

SWT-OPTIMUMSWT-OPTIMUM service saved over service saved over USD 20,000USD 20,000 when stimulating limestone of the open-hole gas when stimulating limestone of the open-hole gas well Asher #8 in Bell County, Kentucky. well Asher #8 in Bell County, Kentucky.

Producer-Anderson Oil Ltd,. Producer-Anderson Oil Ltd,.

Fundamentals of Dilatant Technology

Dilatancy is a permanent deformation registered in rocks that are subjected to non-uniform dynamic stress. As the rock-volume changes, porosity can increase up to 60% and permeability increases 200% or more, as a result of the microfracturing or cracking that have been measured in laboratory experiments using core samples and in the field tests by implementing SWTorpedoTM services.

Dilatancy

Schema A:Schema A: Granules of the sores rock before stress. Granules of the sores rock before stress.

Schema B:Schema B: Rock-volume have changed under Rock-volume have changed under dynamic stress. dynamic stress.

Dilatancy

Dilatancy is the increase in volume of a granular Dilatancy is the increase in volume of a granular substance when its shape is changed, because of substance when its shape is changed, because of greater distance between its component particles.greater distance between its component particles.

Dilatancy

Factors that affect deformation are:Factors that affect deformation are: DilatancyDilatancy Grain crushingGrain crushing Size of the grainSize of the grain Thermal characteristicsThermal characteristics Spatial variations in bed strengthSpatial variations in bed strength DecouplingDecoupling

The Tool

SWTorpedo Tool will be SWTorpedo Tool will be designed using the rock’s designed using the rock’s characteristics received characteristics received from the client by placing from the client by placing high explosives strategically high explosives strategically in the tool and securing in the tool and securing appropriate timing for the appropriate timing for the detonation of each charge. detonation of each charge.

Figure 2 Schematic view of internal design

Tool’s effect on the rock

High explosives such as TNT, HMX or RDX are High explosives such as TNT, HMX or RDX are strategically placed in the Tool and detonated in rapid strategically placed in the Tool and detonated in rapid succession to generate succession to generate multiple multiple shock waves that in shock waves that in return creates changing in time stress state, which return creates changing in time stress state, which approaching uniaxial compression and perfect shift. approaching uniaxial compression and perfect shift.

At this point fast growing increase in volume of rockAt this point fast growing increase in volume of rock can be observedcan be observed, , even though active forces are still even though active forces are still working in compressive regime. working in compressive regime.

Tool’s effect on the rock

Figure 1 Distinctive characteristics of the dilatant stress state created by SWTorpedoTM during its detonation.

Where: Dotted line is progression of Dilatancy and = is maximum principle stress is minimum principle stress t, MC is time in micro seconds Y-axis shows created pressure in Mega Pascal

r

The laboratorial and field experiments The laboratorial and field experiments confirm that dilatancy begins when confirm that dilatancy begins when

( ( = ) < 0.1 ) < 0.1

r

r

Tool’s effect on the rock

When Tool is detonated explosive forces create pressure of When Tool is detonated explosive forces create pressure of ММPa per second. Successive shock waves prolong the stress and Pa per second. Successive shock waves prolong the stress and initiated fractures will be multiple. The area of Dilatancy or micro-initiated fractures will be multiple. The area of Dilatancy or micro-fractures is on average fractures is on average 6 times6 times larger than an area of radial fractures larger than an area of radial fractures

98 10...10

How SWTorpedo is fielded?How SWTorpedo is fielded?

1 Selected well must be shut in and prepared in the same manner as it would be for perforation. That includes: tubing and rod removal

2 Wireline truck with an operating crew (electrical wireline is required)

3 Depth of productive interval which plan to be treated must be confirm and cable-line must be marked.

How SWTorpedo is fielded?How SWTorpedo is fielded?4 Water truck with and operating crew4 Water truck with and operating crew

To avoid stress on wireline, water, solution or other fluid for depressing the well must be pumped in the well up to at least 90 feet above the interval at which Tool will be detonated. Concentration of the solution, its level and/or water level in the well must be calculated based on the pressure in the formation.

How SWTorpedo is fielded? How SWTorpedo is fielded?

Reusable torpedo’s head must be attached to a cable head by the female adapter with 1 7/16 in. thread

Tool-HeadTool-Head

How SWTorpedo is fielded? How SWTorpedo is fielded?

Electrical detonator must be wired and connected to a detonative cord

SWTorpedo Tool with Attached Tool-HeadSWTorpedo Tool with Attached Tool-Head

How SWTorpedo is fielded? How SWTorpedo is fielded?

Connect SWTorpedo to its reusable head and lower the Tool to the mark on wireline that being made earlier Initiate detonation

SWTorpedo Tool Bottom viewSWTorpedo Tool Bottom view

Recovered Debris of SWTorpedo after Recovered Debris of SWTorpedo after Successful TreatmentSuccessful Treatment

Prepare the well for exploitation

Preferable well's and rock's Preferable well's and rock's characteristicscharacteristics

Preferable depth of producing interval for:Preferable depth of producing interval for: Oil wellsOil wells up to 13,200ftup to 13,200ft Gas wellsGas wells up to 14,800ft up to 14,800ft

25.0

Were: -is Young’s modulus;

-is Poison’s ration; -is permeability.

Highly compressible components such as clay, loam, etc. 10%

Psi6105.3 md203

Preferable rock's and well's Preferable rock's and well's characteristicscharacteristics

Representative Characteristics Representative Characteristics of the Formations Rockof the Formations Rock

Results of SWTorpedo Stimulation

1. Sandstone (strong and clean)2. Sandstone (medium strength) Limestone (strong and dense) Dolomite Granite 3. Shale (strong)

Dolomite, sandstone (weak) Limestone (medium strength)4. Shale (medium strength) Sandstone (clayey) Limestone (clayey)

Best

Great

Very Good

Good

Preferable rock's and well's Preferable rock's and well's characteristicscharacteristics

Representative Characteristics Representative Characteristics of the Rock Formations of the Rock Formations

5. Shale (weak with admixtures) Sandstone (weak with admixtures)6. Sandstone (weak with high moisture) Shale (weak with high moisture) Tuff 7. Coal (hard) Shale (strong and/or with high moisture) Tuff (low moisture) Sulfuric ore (with no more than 30% of

sulfur)

Fare

Acceptable

Questionable

Results of SWTorpedo Stimulation

Competitive Advantages of SWTorpedo

SWTorpedoSWTorpedo vs. Common high-explosivevs. Common high-explosive

Effect of dilatancy creates not only macro-Effect of dilatancy creates not only macro-distraction but also micro-fractures that are distraction but also micro-fractures that are main contributors for increase of permeabilitymain contributors for increase of permeability

No compaction zone or cavity createdNo compaction zone or cavity created 10 times less of explosives used for each 10 times less of explosives used for each

treatment treatment SWTorpedo can be used in cased wells where SWTorpedo can be used in cased wells where

casing is perforatedcasing is perforated Easier and safer to handleEasier and safer to handle

Competitive Advantages of SWTorpedo

SWTorpedoSWTorpedo vs. Propellant toolsvs. Propellant tools Each tool is designed individually to meet Each tool is designed individually to meet

specifics of producing formation specifics of producing formation Flat Fee for each type of services regardless of Flat Fee for each type of services regardless of

the treated area the treated area Significantly higher rate of success in Significantly higher rate of success in

sandstone, limestone and dolomites sandstone, limestone and dolomites Initiates multiple fractures vs. 1 or 2 of two Initiates multiple fractures vs. 1 or 2 of two

directional fractures directional fractures Applicable in shallow and under pressured Applicable in shallow and under pressured

wells (only 90ft of fluid required above the tool) wells (only 90ft of fluid required above the tool)

Results can be verified in 5 minutes vs. 30 Results can be verified in 5 minutes vs. 30 minutes minutes

Competitive Advantages of SWTorpedo

SWTorpedoSWTorpedo vs. Acidizing treatment vs. Acidizing treatment Enhance acidizing by increasing area of acid-Enhance acidizing by increasing area of acid-

rock contact when used prier to the acidizing rock contact when used prier to the acidizing treatment treatment

Low risk of the well’s integrityLow risk of the well’s integrity Higher predictability of outcome Higher predictability of outcome

Competitive Advantages of SWTorpedo

SWTorpedoSWTorpedo vs. Hydraulic fracturingvs. Hydraulic fracturing Adjustable vertical growth Adjustable vertical growth Multiple fracturesMultiple fractures For any wells aggregated permeability is For any wells aggregated permeability is

higher higher Significantly lower cost Significantly lower cost Equipment requirements are minimal Equipment requirements are minimal

Competitive Advantages of SWTorpedo

Distinctive Advantages Distinctive Advantages SWTorpedoSWTorpedo creates greater area of effective creates greater area of effective

micro-fractures than any of the existing techniques micro-fractures than any of the existing techniques can create by at least 20ft in each direction. can create by at least 20ft in each direction.

Minimum production increase is agreed on and Minimum production increase is agreed on and approved by the Client prier to the treatment, and approved by the Client prier to the treatment, and will be delivered with 96% of success will be delivered with 96% of success

Fractured area is spherically shaped and connects Fractured area is spherically shaped and connects (net like) stratigraphic traps and productive (net like) stratigraphic traps and productive formations to the main producing interval. formations to the main producing interval.

Range of effective micro-fractures can be adjusted Range of effective micro-fractures can be adjusted from 5 to 35ft for the cased wells, and from 5 to 54ft from 5 to 35ft for the cased wells, and from 5 to 54ft for open-hole wells, limited control of vertical for open-hole wells, limited control of vertical fracture’s propagation is possible. fracture’s propagation is possible.

Fractures are stable over time and its stability Fractures are stable over time and its stability varies from 4 to 12 years varies from 4 to 12 years