Hydro-Impact TM Stimulation Services

1. Hydro-ImpactTM Stimulation Services Applied Seismic Research Corporation

2. Industry Comments • “…first departure from variants on conventional stimulation methods (thermal, polymer, chemical, microbial) to be introduced commercially since the 1970s”. JPT Technology Update, April 2005 • “…technology has the potential to provide a low-cost procedure for enhancing oil recovery in depleted fields and making it economically feasible to restore wells previously considered for abandonment as well as increase production in currently producing fields. …seismic stimulation technology may apply for a wide range of reservoirs, from varying water-cuts and large amounts of immobile oil, virgin lower-gravity consolidated-sand oil reservoirs where predicted recoveries are low (Alaska), to improved water injection and water flood sweeps.” Dr. Ernie Majer, Dir. Lawrence Berkeley Nat. Lab. Geophysics • “I think this is pretty exciting stuff,” Texas Railroad Commissioner Charles Matthews, October 2004.

3. The Hydro-ImpactTM Tool Installs and Operates Similar to a Conventional Tubing Pump

4. Shockwaves are Created by Compressing Wellbore Fluids A Hydro-Impact Tool creates 2 to 10million-watt shockwaves at the reservoir datum ASR Seismic Stimulation increases production and recovery over substantially large areas of a reservoir. The Texas Railroad Commission recently certified ASR’s Seismic Stimulation as an EOR process – granting a producer a 4.8% tax relief on TOTAL field production within a three quarter mile radius of each tool.

5. Shockwaves Enhance Recovery and Increase Production by Mobilizing Oil in Two Ways:

6. Shockwaves are Analogous to Downhole Earthquakes in Your Reservoir … Group of 26 Wells to the Northwest that responded to both the earthquake events of Sept-Oct 1999 and to ISS Group of 5 Wells to the Southeast that did not respond to either the earthquake events or to ISS Diatomite

7. Shockwaves Travel over VERY Long Distances …Both Vertically and Horizontally Sandstone

8. It is NOT Distance from the Source that Matters, it is the Presence or Absence of Unswept Oil Source located 200 feet from responding well Source located 1200 feet from responding well Diatomite

9. By Covering Such Large Reservoir AreasEnhanced Oil Recovery and Increased Oil Production Can Occur in Large Groups of Wells Sandstone

10. It Works by Shifting Relative Phase Permeability Towards Oil - In this Field 6 Dewatering Wells Become Prolific Oil Producers Sandstone

11. Shifting Relative Phase Permeability Towards OilImproves Oil and Reduces Water Production Diatomite

12. Seismic Stimulation ALSO Increases Injectivity - Injecting Water in New Oil-Bearing Strata … Carbonate

13. Resulting in Increased Oilcut and Oil Recovery Carbonate

14. Changes in Recovery Can Be Long-Lasting …but Re-stimulation Shows the Best Use of Seismic Stimulation is on a Continuous Basis Diatomite

15. Permanent and Non-Permanent Stimulations Initial Testing of the First Design In Samotlor Field Russia proved that in-situ seismic stimulation does work and even after the stimulation was removed, in this field it made a permanent change in oil production In early US testing of the First Design the technology proved that for this particular field oil production increased during in-situ seismic stimulation, but quickly returned to the prior decline after stimulation stopped

16. Fields Where Seismic Stimulation did not Work The computer model ranked this field as a good candidate but use of a single Second Generation tool did not create sufficient power to yield results – use of several of our current Third Generation Tools would create the expected increases to oilcut and production as predicted by the computer program. The computer model ranked this field as a poor candidate, having few unswept sublayers – subsequent stimulation proved this to be the case as oilcut did not change appreciably.

17. Will Seismic Stimulation Work in My Reservoir? The Answer is free… ASR has a computer program for the qualitative determination of oil field suitability to seismic stimulation. The data required by our computer model are: • Cumulative oil and water production for the field, • Monthly oil and water prod. for last 3 years, • Core data analyses for at least 3 wells, • Spinner surveys if available, • Oil API gravity, and • Map of the field showing well type and locations.

18. Will Operation of the Seismic Tool Damage the Pumping Unit? No. The Pumping Unit Never Sees a Zero Load. Tool fires near top of stroke releasing shockwave. Compression occurs during upstroke. D Load ~ 10,000 lbs

19. The Tool Shipped in 3 SectionsAssembled by a rig crew using standard equipment

20. Should You Try it in Your field? If the following conditions are met: • FIRST, we advise against reservoirs with GOR’s greater than 2,200 scf/stb and/or reservoirs with API gravities less than 15, • SECOND, based on our computer model results, we would advise against fields where seismic stimulation could provide less than 10% increase in oil production and oilcut, and • THIRD, economics – we suggest using a 5 - 10% increase on TOTAL oil production within a ½ to ¾ mile radius of the seismic source to determine if the expenditure is justified, then, We encourage you to try it -