Innovative Energy Technology February 2015

CJS Production Technologies Inc.“Committed to Production Solutions for the Energy Industry”

Scott Kiser – Business Development Director – Calgary, AB, Canada, scott@cjsflatpak.ca (403) 463-4740

CJS The Company & its Business Model

CJS is a private Canadian company with offices in Alberta and Texas. Our Company offers alternative artificial lift options for challenged wells to optimize production and revenues and minimize operations costs

CJS is an intellectual property owner, manufacturer and an oilfield service company.

CJS FlatPak umbilical, ArmorPak umbilical, JetVak, HydraPak PCP, HydraPak HSP & ArmorPak ESP are patented or patent pending technologies.

CJS products foster production optimization from conventional and unconventional well configurations.

Over the past six years CJS has landed approximately 600,000 feet of CT umbilical to complement hydraulic pump trials and perform well cleanout operations.

CJS offers its proprietary products directly to oil and gas clients and is fully vertically integrated for ease of product purchase and accountability to our customers.

CJS Solution“One Product – Two Applications”In 2008, CJS was approached by Global Energy of Calgary with a hydraulic pump that Global had developed and successfully field trialed. This pump had been developed to deal with the inadequacies of traditional artificial lift systems in mature low pressure and deviated or horizontal wells. Global had a hydraulic pump that worked but that lacked a safe and cost efficient method of deployment.

CJS identified and developed a unique coiled tubing (“CT”) umbilical to concurrently pump hydraulic fluid to a downhole pump while receiving production fluids to surface through the umbilical. The result of CJS efforts was the development of an industry unique umbilical used for the dual purpose permanent artificial lift and performing well cleanout operations.

During product development, intellectual property applications were filed by CJS on all of its main products. To date CJS has sold over 160 artificial lift solutions to over two dozen client corporations including top tier Conoco, Shell, Devon, Cenovus, Husky.

CJS FlatPak Umbilical

Global Hydraulic

Pump

Typical Traditional Pumping Styles

Reciprocating Rod Drive Pump

Progressive Cavity Rotary Rod Drive Pump

Conventional Service Rig for Pump Deployment

Submersible Tubing Deployed Electric Drive Pump

CJS Pumping Alternatives – Application 1

Reciprocating Hydraulic Drive Pump (Over 100 Units

Sold)

Progressive Cavity Hydraulic Drive Pump (9 Units Sold)

Coiled Tubing Unit for Pump Deployment

Submersible “Live Well” ArmorPak Deployed Electric Drive Pump (1rst Unit Trial)

ArmorPakElectric Umbilical

FlatPak / ArmorPakUmbilical

FlatPak /ArmorPak Umbilical

ArmorPak Hydraulic Umbilical

FlatPak Hydraulic Umbilical

ArmorPakElectric Umbilical

Typical Foam Cleanout Operation

CJS Non-Invasive JetVak

Operation(Over 600

successful jobs to date)

Well Cleanout Alternative – Application 2

Tempress HydroPull cleanout

Operation

Technology Scope and Reach

CJS Systems are relevant in the following circumstances

Light and heavy oil wells

Natural gas wells

Enhanced oil & gas recovery fields / SAGD

Wells from 4.5” outside diameter and greater casing sizes

Wells to total depth equal to current coiled tubing limits

Wells producing low to medium fluid rates (0 – hundreds of BFPD)

Permanent pumping or well cleanout applications

CJS FlatPak / ArmorPak Umbilical Is ... Conveyed using conventional coiled tubing units in a “live well” environment

A coiled tubing umbilical system containing tubes to convey and actuate electric or hydraulic downhole pumps and receive production from the pump to surface.

A system that can include components to inject chemicals and receive downhole data.

Used to facilitate low maintenance artificial lift from conventional, deviated and horizontal wells

Robust and versatile enabling the umbilical to convey pumps for permanent artificial lift or perform wellbore cleanouts

Patented and patent pending technology

ArmorPakTM

All metal banded umbilical for deeper well depths and thermal well applications

Fatigue and stress testing evidences ArmorPak extends umbilical life eliminating potential for wear on the outer thermoplastic jacket

Manufacturing is performed in Canada facilitating improved delivery time frames

ArmorPak - BOP Testing June 2014

FlatPak is Conveyed With ... Conventional coiled tubing units

Modified arch rollers and injector components

Specialized snubbing & blowout prevention systems

CT unit modifications to permit fluid pumping operation

Modified wellhead apparatus including modified tubing hanger

Typical Completion Stack

FlatPak / ArmorPak Field Service Operations

Texas, USA

Peoples Republic of ChinaNorth Central Alberta

Arkansas, USA

FlatPak / ArmorPak Supports ...

Hydraulic Submersible Piston Pumps- HydraPak HSP – Over 100 systems installed with multi year run lives – field proven technology

Hydraulic Progressive Cavity Pumps – HydraPak PCP – Testing in Chops and CBM wells prove reliability and reasonable run life – 9 wells total to date – field proven technology

Electric Submersible Pumps – HydraPak ESP – First trial to take place Spring 2015. System to be field proven spring 2015

Permanent Pumping Applications

Well Cleanout Applications JetVak – 600 applications -

proven technology

HSP Value Proposition

• Rig-less, Live Well, Rod-less Technology

• HSP is installed with a conventional coiled tubing unit

• HSP operates efficiently in vertical, horizontal and deviated environment

• Can include downhole sensors for pressure monitoring

• Eliminates rod and tubing wear reducing well downtime

• Pumps natural gas very effectively and operates in a “pumped-off” state – no gas locking

• Handles sand / formation fines via sand screen

• Can be used to pump oil or dewater natural gas wells

• Scalable from .1 m3 to 25 M3 per day depth dependent

• Versatile OD of 3.6”

• Versatile Power Source Electricity, Propane, Field gas, Wind/Solar

• Effective heat tracing system for surface piping

HydraPak HSP - Rod-less Artificial Lift

• The HSP surface unit supplies the hydraulic power to the submersible pump and is comprised of: • Prime Mover (Natural gas

engine, Electric motor, Solar Power)

• Hydraulic pump coupled to prime mover

• WandFlu valve for alternately energizing the hydraulic oil lines

• Hydraulic Oil Storage Tank• Electronic Controls

• General purpose classification

meaning that the surface unit is placed more than 7-m radial distance from the wellhead

HydraPak HSP - Rod-less Artificial Lift

HydraPak HSP Alberta Shallow Gas Well Case Study

HydraPak Rod-less PCP

Advantages

• Rig-less, Live Well, Rod-less Technology

• Pump installed using a conventional coiled tubing unit

• Operates efficiently in vertical, horizontal and deviated environments

• Eliminates rod and tubing wear and well downtime

• Creates a greater variety of well service options to deal with solids production etc. (ie: pump can be reversed to flush solids)

• Can include downhole pressure monitoring sensors to eliminate well “pump off” and protect the pump

• Can include chemical injection at the pump intake treating torque, scale, wax, H2S and corrosion

• Can be used pump oil and dewater natural gas wells

HydraPak PCP Rod-less Artificial Lift

CJS G2 HSPCP

• System developed by CJS Q4 2010

• System incorporates CJS FlatPak / ArmorPak and downhole hydraulic motor delivering 400 ft/lbs of continuous torque; 800 Ft/lbs intermittent torque

• First systems run in Canada into 800 meter CHOPS wells near Lloydminster

• System proves a minimum 9 months runtime equal to pump life

• System can accommodate down to 5.5” OD casings with future designs for 4.5” OD casings

• New G2 1200 ft/lb torque motor now available for field testing

HydraPak PCP Technology Overview

HydraPak PCP Field Installations

“G2” HydraPak PCP Pumping Chart400 Foot Pounds of Continuous Torque up to 200 RPM

“G2” HydraPak PCP Pumping Chart1200 Foot Pounds of Continuous Torque up to 200 RPM

HydraPak PCP Case Study

Produc-tion

Month

1 2 3 4 5 6 7

0

1

2

3

4

5

6

7

HydraPak PCP800 Meter Alberta Heavy Oil Well

Heavy Oil Production M3/D

ArmorPak Conveyed ESP

• ArmorPak umbilical that conveys electric submersible pumps

• Facilitates live well installation and subsequent service of electric pumps

• Substantially reduces servicing time, cost and lease footprint

• Eliminates requirement for service or work over rigs

• Eliminates cable spool unit when conveying electric pumps

• Reduced equipment mobilization and associated cost

• Eliminates tubing connections reducing corrosion points

• First system to be installed in Spring 2015 for Conoco in Alaska

ArmorPak

ESP

ArmorPak Conveyed ESP – Termination and Hanger

ArmorPak Conveyed ESP - Field Test - June 2014

JETVAK

• Wellbore cleanout system developed in 2009 by CJS and partners

• The primary function of this technology is to create a low pressure environment in the well bore to pump the fluid and/or solids to surface

• Hundreds of jobs performed with the JetVak cleanout system since development of this technology

• System methodology increases post cleanout well production via evacuation of near wellbore fluid and solids blockages.

“JetVak” A Hydraulic Wellbore Cleanout System

Typical JetVak Cleanout

Husky CHOPS Hz well cleanout with JetVak

• 1550 meter measured depth• 0.8m3 sand• Recovered 30%; 3.5m3 of fluid

• This well was 1yr old and did not produce

• Post cleanout the well produced at 10m3/day

FlatPak Application History

• Canada & United States

- Over 160 HydraPak HSP & HydraPak PCP pump installations to date

- Installations including vertical, deviated and horizontal oil and natural gas wells

- Pump run lives up to many years

- hundreds of 1,000 to 3,000 meter vertical & horizontal well JetVak cleanouts

- horizontal reach in horizontal leg to over 2,000 meters

- First live well “ArmorPak ESP” to be installed for Conoco Phillips Spring 2015 in Alaska

• China - HydraPak PCP pump landings in coal bed methane wells

• Oman - JetVak cleanouts to take place in 2015

Operations for companies such as Shell, Conoco, Devon, Total, Nexen, Suncor, Husky, Encana

How CJS Can Add Value “Live Well Solution, Production Optimization, Decreased Operations Costs”

Rig-less “Live Well” Operations

Servicing wells with a conventional coiled tubing unit requires less equipment and staff thereby reducing costs to the customer, lease footprint and environmental impact while improving safety and on-production turnaround time

Pump installations are completed in hours with a conventional coiled tubing unit with minimal footprint at a fraction of the cost of service rig intervention

“Live” well pump installations increase efficiency, reduce cost and eliminate potential reservoir damage

Rod-less Technology

Eliminate well downtime and service costs associated with tubing and rod failure

Increased production volumes with optimum downhole pump placement Increase daily production and ultimate recovery of reserves by lowering the pump to ‘full true

vertical well depth’

Improved service options Eliminate reciprocating pump gas locking with a full stroke every time

Facilitate reverse spin on progressive cavity pumps to flush solids out of the pump

Increase solids carrying capability using smaller diameter tubing with no additional reservoir drawdown

Pull an ESP with one unit on location in hours, not days

Quality Control and Competitive pricing Increase quality control and accountability with CJS delivering the entire system System price for this technology is similar to traditional artificial life pricing

Cost effective and efficient use of a coiled tubing unit

Coiled tubing unit service requires less equipment and staff thereby reducing on location costs by more than 50% also mitigating lease footprint and environmental impact. Coiled tubing service increases safety and revenue from better on-production turnaround time.

Live well operation

CJS offers live well intervention thus eliminating the possibility of wellbore damage therefore decreasing downtime and increasing revenue and potential ultimate recoverable reserves.

Elimination of rod and tubing wear

CJS solutions eliminate rod and tubing wear increasing the well’s “on production time” while reducing the service costs and service visits.

 Increased revenue from proper downhole pump placement

A CJS pumping system differs from a conventional artificial lift system as our pumps are always placed in the optimal position in the well to maximize production and revenue.

 Quality Control

CJS solutions are vertically integrated offering the customer maximum operational control and accountability.

 Return on Investment

When considering all revenue and cost optimization, assuming certain well conditions exist, the cost of a CJS system could reasonably be recovered in one year.

 

How CJS Can Add Value “Live Well Solution, Production Optimization, Decreased Operations Costs”

Possible Economic Value Case Pump Installation Cost Savings

Typical Service Rig Pump Deployment - $20k rod pump / $50k electric pump (can take 1 to 3 days)

CJS Hydraulic or Electric Pump Deploy - $8k hydraulic pump / $20k electric pump (generally takes one day)

Total Pump Installation Savings = $12k to $30k

Operating Cost Savings and Revenue Increases

Assuming a rod string has a one year life…. and the umbilical has a multi year life then each yr:

1. Save - One rig intervention each year with no rod or tubing wear = $20k

2. Save a partial replacement of tubulars .. Assume 100 meters each of 3.5 inch EUE + co-rod strings = $5k

3. On a 25 barrel per day well at $50 per barrel save two weeks well downtime = $18k downtime savings

4, If the well is lower pressure and you drop the pump 100 true vertical meters of depth and add 20% to the daily production rate: 5 bbls/d x $50 barrel is $250/d x 365 days = about $91k in incremental production

Total Operating Cost Savings and Revenue Increases = $134k

TOTAL INCREMENTAL VALUE = $134K + $12K = $146k : SYSTEM COST $120K : PAYOUT = 9.9 MONTHS

CJS PRODUCTION TECHNOLOGIES “Committed to Production Solutions for the Energy Industry”

Scott Kiser – Business Development Director – Calgary, AB, Canada, scott@cjsflatpak.ca (403) 463-4740