© 2013 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE CONFIDENTIAL AND PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY " INFORMATION") . BAKER HUGHES RETAINS ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL TO BAKER HUGHES’ INTEREST.

Challenging the Lower Limits: A FLEXible Solution for Unconventional Oil Wells

Rod Lift Systems: A Proven, Long-Term Production Solution for Conventional Oil Wells

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Easily adjusted pumping capacity

Simple to design, operate and analyze

But are they the best solution to the challenges of unconventional oil wells?

Interchangeable, readily-available components

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There is another proven choice for unconventional oil wells

with better economics and fewer HSE risks

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TECHNOLOGY

SERVICES

COMMERCIAL MODELS

FLEXible Solution for Unconventional

Oil Wells

Better Economics: 25% Production Increase Problem •  Reduce downtime and increase production

Solution •  Convert to Centrilift FLEX 3.2

pump system •  Technology deployed to handle gas

within this low-flow regime

Benefit •  Increased oil production ~45 bopd •  Eliminated downtime from rod and

tubing issues •  Zero ESP downtime

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Better Economics: 42% Increase in Oil Production Problem •  Reduce downtime and increase production in wells with GOR >2000 scf/bbl

Solution •  Install ESP system, coupled with newly developed VSD algorithms •  Technology deployed to handle gas across broad production range

Benefit •  Increased oil production by 42% with zero gas-related shutdowns

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Better Economics: 100% More Oil Produced in 150 Days Problem •  Determine best artificial lift method

Solution •  Drilled 2 identical wells with same

completion methodology •  ESP and gas lift systems used from IP

Benefit •  ESP system delivered 100% more oil in

150 days •  Decreased payout from 15 to 5 months

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Better Economics: Oil Production Rate Increased by 75% Problem •  Is conversion from gas lift to ESP economic?

Solution •  Monitor performance of gas lift well to stabilized rate •  Convert to ESP system with proven design and observe

Benefit •  Increased oil production rate by >200 bbl/d (>75%) •  Increased gas production rate by >800 mcf/d (>60%) •  Payback on ESP system installation <1 month

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Improved Cash Flow and ROI in the Eagle Ford Problem: •  Reduce downtime and increase

production

Solution: •  Convert from rod lift to ESP FLEX

3.2 Pump •  Technology deployed to handle

gas across broad production range

Benefit: •  Increased cumulative oil production

due to reduced downtime •  Improved cash flow and ROI

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

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Year One Operating Cash Flow

ESP

Rod Lift

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Fewer HSE Risks: Rod Lift Systems vs ESP Systems ©

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• Up to 47’ high • Unsightly on the landscape • Exposed moving parts

•  4’-6’ high • No exposed moving parts • Mechanically safer

RODLIFT SYSTEMS

ESP SYSTEMS

A FLEXible Solution based on Today’s ESP Technology

FLEXIBLE RELIABLE

EFFICIENT SAFE ©

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•  Operates in ranges from 4000 bfpd to 50 bfpd

•  Maximizes uptime and well drawdown in high GLR environments •  Minimizes damage from abrasives •  Eliminates downtime due to rod and tubing wear

•  Eliminates reduced rod-pump efficiency due to gas

•  Is landscape friendly

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TECHNOLOGY

SERVICES

COMMERCIAL MODELS

FLEXible Solution for Unconventional

Oil Wells

Growing Confidence in ESP Systems

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800

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Baker Hughes ESP Systems in Shale Wells – North America

1000+ systems Installed since

2007

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ESP solution developed at customer request

First shale ESP replaces rod pump

Flexible Pumps vs Rod Lift Systems

Conventional oil wells •  Improve gas/solids handling •  Optimize power costs

Unconventional oil wells •  Operate in low flow ranges •  Deploy in horizontal, deviated wells

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As a well’s PI or GLR changes…

…ESP systems meet the challenges 50

Gas Mitigation: Key to Reliability ©

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GAS AVOIDING: Patented gas-avoiding intake

GAS SEPARATING: Patented high-angle vane auger

PUMP CHARGING: GI NPSH stage for well drawdown

GAS HANDLING: Patented multi-vane pump

LIFTING: FLEX™ series pump technology

Gas Avoider Intake ©

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FLUIDS Open ports at bottom for fluids entry

GASSES Blocked ports on top prevent gas entry

•  513 gravity cup available •  400 gravity cup pilots 11/2013

Gas Mitigation: GM Series Separator Increase production ▪ Higher volume capacity ▪ Better efficiency Longer run life ▪ Better wear resistance

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Gas Mitigation: Gas Handling with GI Stage “Charging” •  Improve overall gassy well drawdown

•  Help “charge” upper pumps

•  Diminish pressure difference across the vane with gentle sweep

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Gas Mitigation: Gas Handling with MVP Stage Increase production

! Better gas handling

! Better lift characteristics

! Better efficiency

! Extended ESP applications

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Gas Mitigation: MVP Unique Patented Design

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Balance holes

Split vane

Steep discharge

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Gas Mitigation: Gas Handling with Standard Equipment ©

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Free Gas Handling Ability Radial Mixed

Sand Handling Solutions: Key to Performance Enhanced abrasion-resistant technology !  Rapid temperature changes !  Thermal growth allowances !  Lack of lubricity

Patented stage coating !  Protects against sand, scale, and asphaltenes !  100% coverage

Completion tools !  Sand screen

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EXCLUDER™ Sand Screen

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Base Pipe

BAKERWELD Inner Jacket

Vector Weave Membrane

Vector Shroud

Durability In addition to the EXCLUDER screen’s superior longevity, the screen is extremely durable. The EXCLUDER screen was tested to the following criteria without failure: • Collapse test to 6,000 psi •  Tensile loading to 2% elongation • Crush test to 60% of original diameter

•  Torque test to 1°/ft deformation. After being crushed to 60% of its original diameter, the EXCLUDER screen continued to provide formation control and excellent flow.

Screen Longevity In comparative tests, the EXCLUDER screen outperformed other “standard” well screens. The vector weave membrane delivered greater solids retention and extended the time to plugging.

Power Monitor ©

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The Power Monitor is a standalone assy C906224 $1358.09

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TECHNOLOGY

SERVICES

COMMERCIAL MODELS

FLEXible Solution for Unconventional

Oil Wells

People with Experience from Innovation to the Field ▪ Applications engineers ▪ Real-time optimization experts ▪ Field service professionals ▪ Support professionals

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On-Time Manufacturing and Delivery ©

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REMOTE COMMUNICATIONS

KPI REPORTS

INTERACTION AND COLLABORATION ANALYTICS

Web-Based Monitoring: Driving Optimized Performance

VISUALIZATION

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▪ Compliant to stringent security standards ▪ Can optimize optimize production and performance through advanced

exception reporting and innovative mathematical modeling feedback

Downhole Sensors Enable Web-Based Monitoring ▪ Increase production

–  Reliable, continuous pressure data that ensures optimum drawdown for improved pump efficiency

▪ Increase run life –  Intake pressure monitoring prevents pump-off and thermal cycling

▪ Prevent thermal failure from overload, pump-off, and scale –  Monitor motor winding temperature

▪ Reduce OPEX –  Continuous monitoring reduces resources required to perform

surveillance, operations support, and data collection and analysis

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Fluid

Disposal

Flow Meter

System Features •  Artificial lift system tailored for wellbore environment •  Chemical injected proportionally with flow •  Surface injection system for re-pressuring, disposal •  Remote monitoring of chemical, down-hole and surface assets •  Real-time system performance, data analysis, optimization and failure prevention

Integrated Chemical Services

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Tank Battery

Chemical Tank

Chemical Tank

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SERVICES

COMMERCIAL MODELS

FLEXible Solution for Unconventional

Oil Wells

TECHNOLOGY

Commercial Models to Meet Economic Requirements ©

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Rental

Incentivized

Lease to Own

Sell/Trade

Expanded Warranties

Well Testing

Straight Sale

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BETTER ECONOMICS

FLEXible Solution for Unconventional

Oil Wells

SAFER

FEWER HSE RISKS

ProductionWave™ FLEXible Solution

© 2013 BAKER HUGHES INCORPORATED. ALL RIGHTS RESERVED. TERMS AND CONDITIONS OF USE: BY ACCEPTING THIS DOCUMENT, THE RECIPIENT AGREES THAT THE DOCUMENT TOGETHER WITH ALL INFORMATION INCLUDED THEREIN IS THE CONFIDENTIAL AND PROPRIETARY PROPERTY OF BAKER HUGHES INCORPORATED AND INCLUDES VALUABLE TRADE SECRETS AND/OR PROPRIETARY INFORMATION OF BAKER HUGHES (COLLECTIVELY " INFORMATION") . BAKER HUGHES RETAINS ALL RIGHTS UNDER COPYRIGHT LAWS AND TRADE SECRET LAWS OF THE UNITED STATES OF AMERICA AND OTHER COUNTRIES. THE RECIPIENT FURTHER AGREES THAT THE DOCUMENT MAY NOT BE DISTRIBUTED, TRANSMITTED, COPIED OR REPRODUCED IN WHOLE OR IN PART BY ANY MEANS, ELECTRONIC, MECHANICAL, OR OTHERWISE, WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF BAKER HUGHES, AND MAY NOT BE USED DIRECTLY OR INDIRECTLY IN ANY WAY DETRIMENTAL TO BAKER HUGHES’ INTEREST.

Challenging the Lower Limits: A FLEXible Solution for Unconventional Oil Wells