Percussion Drilling &

Motor Tech For Long Reach

Horizontal Wells

IADD Luncheon | May 2018

Agenda

2

• Rival Downhole Tools introduction

• Horizontal Well Challenges for Drilling Motor Technologies

• Solutions

• PDM Reliability

• Percussion Drilling

Ashmin established as a 3rd party engineering firm

for downhole tools

2002

2004POWR Motors product launch

for 1.69” to 12.25”

Launch of full Thru Tubing BHAcomponents

2008

Ashmin Legacy

3

2015Workover Solutions

commenced operations in the NE

US

XtendR friction reduction tool

launched for thru tubing

EV Private

Equity invests

into Ashmin and

WOS

2017

2018Launch of

Rival Downhole Tools

Rival Downhole Tools ("Rival") is a developer/provider of a

suite of innovative downhole drilling and workover tools:

• Rival PDM: Best in class Performance Drilling Motors –

Higher torque, greater reliability, field proven since 2004

• Rival FRT: Friction Reduction Tools for extended reach

and increased rate of penetration

• PDMct & FRTct: Best in class performance motors and

friction reduction tools for frac plug drill outs, milling,

and other completion activities

• Ashmin Engineering: Rival's engineering department

("Ashmin") provides 3rd party engineering services, as

well as develops cutting edge tech for Rival’s offering.

Company

Addressable Market & Value PropositionAshmin provides Rival with a state of the art

R&D department

Contract engineering for 3rd parties

requiring innovative downhole solutionsEngineering

Provides drilling

operations with

high performing,

reliable motors

Higher torque and

longer life

compared to

standard drilling

motors

Patent protected

PDM

Coil tubing

motors & friction

reduction tools for

completion and

workover services

Best in class

product: higher

torque and higher

strength with low

operating costs

Patent protected

ct

Friction reducing,

extended reach

tools

Axial pulses

enhance ROP to

extend reach in

long laterals

Coil tubing &

drilling

applications

Patent protected

FRT

Rival Downhole Tools – Company Profile

• Aggressive growth towards top 3 drilling motor provider

• Partnership versus traditional transactional approach

• Reliability and performance tracking capabilities

unmatched in downhole tools

Horizontal Well Challenges for Motor Technologies

5

Inc

reas

e R

OP

To

rqu

e f

t-lb

2005 2010 2017

Horizontal: 120 FPH30 FPH -

multiple generally 1BHA for curve &

lateral:-

20 days 6 - 7 daysDays per well: -

1995 2017 2020

4-3/4" (5") 16,0001,500 - 2,000 5,000 - 8,000

4,000 - 7,000 45,0006-3/4" (7") 12,000 - 24,000

1

Horizontal Well Challenges for Motor Technologies

6

ConnectionRec’d

Make-up TorqueYield Torque

2-7/8 IF 15,870 21,160

2-7/8 REG 10,850 18,100

2-7/8 Slimline 16,200 27,980

3-1/2 REG 11,500 19,250

675 with 4.50 Head O.D.

Company MotorOperating

Torque

Stall

Torque

BICO 7” SSS100 20,190 33,000

NOV 675ERTcr7850 11,014 30,290

Dyna-Drill DD700786.8 14,630 21,950

Basintek BT675785.7 SX 13,600 20,400

P-V Fluids PV675764-HS-4 15,651 N/A

Horizontal Well Challenges for Motor Technologies

7

• Reduce the bit to bent length from an average of 74” -76” to 48” - 56”

Bit to Bent2

So, limited utilization of a single flex shaft as transmission

Max Bent Angle3

• Maximum angle setting while rotating

2015: 2.38° (2.60°)

2005: 1.5°

Max RMP4

• Maximum RPM of motor

2015: 120 RPM

2005: 20 - 40 RPM

Rival PDM

8

• Had a focused, phase one launch in April 2018

• Is a proven, reliable design based upon +15

years of Ashmin experience

• Is a very simplistic tool with fewer parts then the

industry standard

• Has a mud lubricated bearing assembly with

fixed bend and adjustable housing options

Claw style transmission in 5.12” and 7.12”

CV transmission in 8.5”

• Has double shoulder connections in drive line

Rival PDM Bearing Section

9

• Mud lubricated; no seals; 300 hours minimum run

• In-house Radial Bearings and Thrust Races that:

▪ Allow for max WOB

▪ Improve performance downhole

▪ Reduce NPT and long-term costs

• Mandrel catch safety feature

• Run successfully since 2004

• Available slick or stabilized

Size Max Torque

commercial

Max Torque

prototype

475/500 11,800 ft-lbs 17,000 ft-lbs

675/700 32,000 ft-lbs 40,000 ft-lbs

800 45,000 ft-lbs 65,000 ft-lbs

962 55,000 ft-lbs -

Rival PDM CV-joint Transmission

10

• Designed to handle all industry available

even wall and hard rubber power sections

• Oblong holes reduce washouts

• Patented replaceable ball pocket and

associated balls extend the overall life of the

transmission to reduce the average cost per

run

Our C-V III transmission is a high-torque,

high-strength C-V with patented,

replaceable pocket inserts designed for use

with high torque power sections.

Rival PDM Flex Shaft Transmission

11

• Designed using Ashmin’s proprietary design

calculator and optimized with Finite Element

Analysis (FEA)

• Direct applied proprietary hardfacing applied

on the shaft

• Carbon steel single piece, stainless steel or

titanium

• Radial upper bearing with tiles or PTA

• Simple to assemble and maintain

Solid, flexible transmission rod for straight

or bent motor applications.

Rival PDM ABH

12

• Only one of two 3-piece ABH on the market (patented)

• Replaceable, low-cost trim ring extends life and lowers costs

• Large bore handles high-torque transmissions

• Full bore options slide over transmission

• Ashmin Tough Hardfacing extends life and can be refurbished

• Adjustable in the field

Size Bit to Bent ABH

(FBH)

475 57” (47”)

675/700 65” (52”)

800 88” (76”)

963 110” (103”)

Rival PDM Transmission Housing with Bypass

13

• Defined mud bypass to the annulus between power section

and bearing section (patented)

• Adjustable fluid bypass based on mud and bit nozzles

• Example: 7” motor with 720 GPM; 120 GPM mud bypass

through transmission housing; 600 GPM mud flow through

bearing section

• Currently shop adjustable only; future – field adjustable

Rival PDM Power Section

14

• Total of eighty motors in phase one,

consisting of:

▪ 15x 5.12” drilling motors rated to 12,000 ft-lb

▪ 40x 7.12” drilling motors rated to 32,000 ft-lb

▪ 25x 8.5” drilling motors rated to 45,000 ft-lb

• Powersection strategy built around asset

intensity in our first phase:

▪ 8” 7/8 4.0 EvenTek

▪ 8” 7/8 4.0 Conventional

▪ 8” 7/8 3.4

▪ 7” 7/8 5.0

▪ 7” 4/5 7.0 EvenTek

▪ 7” 4/5 7.0 Conventional

▪ 7” 7/8 5.7

▪ 5” 6/7 8.0

Rival FRT

15

• Is also undergoing a focused, first phase

launch in Q2 of 2018

• Is a friction reduction tool that enhances

weight transfer and extends the reach of

bottom hole assemblies in lateral applications

• Utilizes a powersection and a shock tool

similar to other FRT technologies available in

the market

• Is not an “us too Agitator”. It’s target

frequency of 10-12 Hertz allowing for

stronger, longer axial pulses and further

shock tool engagement.

• 16 drilling Rival FRT’s are included in our first

phase, consisting of 5” and 7” FRT’s (8 each)

High Speed Drilling

• High speed drilling with an

expected bit speed of app. 800

RPM

Future 750 RPM bit speed + 40

RPM DP rotary

Currently 120-300 RPM bit speed +

80-120 RPM DP rotary

• Increased ROP by 30% to 50%

Percussion Drilling

• Less torque requirement thus

Less reactive torque

Better steerability

Less “rotational” horsepower

requirements at the bit

Alternative Designs to address Challenges

“The pace of drilling an oil or gas well with conventional mud motors is reaching technical limits.

Ashmin has combined the function of a percussion hammer with the rotational action of a drilling motor to further increase drilling efficiency…”

We call it the HammR Drill

Drilling Hammer Trends

Mud Hammer CompanyType of

ActivationType of tool Size Active Comments

AnderhammerAndergauge

Drilling SystemsPiston Percussion Hammer 6-3/4" No

Flow control system -

Agitator

Novatek Hammer Novatek Piston Percussion Hammer 7-3/4" No

SDS Fluid

HammerSDS Digger Tools Piston Percussion Hammer

4-3/4"; 6-3/4";

8"No

Wassara Hammer Wassara Piston Percussion Hammer2"; 3"; 3.5"; 4";

5"; 6"; 8"Yes Clean water only

Mudhammer Drillstar Piston Percussion Hammer 5"; 7" Yes For all drilling fluids

Hydro Efflux

HammerSinopec Piston Percussion Hammer 5"; 7"; 9" Yes

Commercial, for all drilling

fluids, using coanda effect

Fluid Hammer Upside Energy Piston

Percussion section combined

with a sealed mud motor

bearing section

8" YesPrototype testing, for all

drilling fluid

Fluid Hammer NOV Camshaft

Percussion section combined

with a sealed mud motor

bearing section

7" Yes

Commercial, for all drilling

fluids, not run in Western

Hemisphere

HammR Drill Ashmin Camshaft

Percussion section integrated

into a mud lubricated mud

motor bearing section

2-7/8"; 3-1/8";

7"Yes

2-7/8" & 3-1/8" are

commercial, 7" prototype,

for all drilling fluids

Drilling Hammer Trends

• Integrate Percussion & Rotation

• Increase in ROP >30%

• Compatible with MWD

• Improve Steerability

• Compatible with all bit types

• Reduce stick slip with PDC

• Minimizes tool failures

• Produce a less tortuous wellbore

HammR Drill

HammR Drill - Design Objectives

• 3 year R&D program

• Developed entirely in-house

• Commercial version of 2-7/8” and 3-1/8”

tools sizes

• Successfully completed 7” system in field

trials in cooperation with Scientific Drilling

HammR Drill - Development

HammR Drill - First Generation

22

HammR Drill - Second Generation

Bearing Section Specifications

Generation Gen 1 Gen 2 Gen 3

Bearing Section Overall Length (in |

cm)74.7 | 189.7 74.6 | 189.5 76.0 | 193.0

Bit to Bend Length (in | cm) 84.2 | 213.9 84.1 | 213.6 86.0 | 218.4

Hammer OD (in | cm) 7.13 | 18.1 7.13 | 18.1 7.25 | 18.4

Bearing Housing OD (in | cm) 7.13 | 18.1

U-Join Housing OD (in | cm) 6.88 | 17.5

Bend Housing Pad Radius (in | cm) 3.81 | 9.7

Maximum Drilling WOB (dynamic) 108,000 lbs. (49,000 kg)

Maximum Overpull to Re-Run 250,000 lbs. (109,000 kg)

Absolute Overpull 600,000 lbs. (272,000 kg)

Maximum Driveline Torque 14,000 ft-lbs (19,000 N-m)

Maximum Operation RPM 150 rpm

Bit Box Connection 4-1/2 Reg Box

HammR Drill - Specifications

Hammer Mechanism Specifications

Generation Gen 1 Gen 2 Gen 3

Number of Ramps 8 24 8 6

Maximum Impact

Frequency (Hz)20 60 20 15

Impact Energy (J) 146 32 146 192

Impact Force

(approximate, lbs.)15,000 6,000 15,000 20,000

Spring Design Belleville Belleville Coil Spring

Ramp Contact Design Sliding Sliding Rolling

Hammer Linear Support

Design2 Castles 2 Castles 10 Splines

HammR Drill - Specifications

No. of Test

Runs

Interval Drilled

(m)

Total Drilling

Hours.

ROP (m/hr.)

Avgas

Company 1 6 5,276 154 34.3HammR Drill

Generation 14 3,378 114 29.6

HammR Drill

Generation 22 1,898 40 47.45

Company 2

(All Gen 2)4 2,280 140 16.2

Company 3

(All Gen 2)2 2,583 93 27.7

Grand Total 12 10,140 387 26.2

• Company 1 and 2 are operators in Pennsylvania. Company 3 is in Canada.

• All runs were in 8.75” hole size in intermediate section down to kickoff point

HammR Drill - Field Test Run Results

Note:

Key Points

• Increased ROP

• Minimized Slide

Time

• No MWD Failures

• Similar Power

Sections 7:8 3.3

• Similar Flow Rates

& Density

• Similar Water

Based Drlg. Fluids

HammR Drill - Field Test Data

Smith Si616 BPX: 1-1-CT-A-X-I-CT-TD

Bridge plug Sandstone

Bradford Sandstone cuttings

HammR Drill Cuttings

Key Observations/Results

• Good/excellent ROP: 30 - 50% increase

• No effect on PDC durability

• Excellent Steerability

Repeatable/predictable tool face - low

reactive torque

Reduced slide time - improved BUR yield

• No interference MWD signal

• No BHA related failures

• Successfully integrated hammer

mechanism into bearing

assembly of steerable mud

motor

Summary

• Effectively run in directional and

vertical wells, all with PDC bits

HammR Drill - Summary

RRS

Potential competition

and replacement to RSS

Result Motor Power Section

No need for high

torque power section

anymore

HammR Drill - Summary

Reduced slide time

from planned 7% to

1% - 2.5%

• HammR Drill – 7” Fourth Generation 68” – 70” BTB

Ten 7” tools in the field for optimization in 2018

• Drilling Optimization Formation (soft to hard)

Bit (design and WOB)

Hammerdrill

• Impact Load

• Impact Frequency

• Numerous more runs needed to research the potential of a RSS

alternative and less torque power sections

HammR Drill - Path Forward

Percussion Drilling &

Motor Tech For Long Reach

Horizontal Wells

IADD Luncheon| May 2018