NFSI Super System

Our MissionIs to provide our customers the bestnew technologies and select existingtechnologies with honesty andintegrity. NFSI can design drillingfluid programs for all types of wells.

Environmentally FriendlyNFSI Super SystemNFSI Super System

Benefits

Ease of applicationFormation compatibilityContaminant friendlyEnhanced borehole stability

AdvantagesNFSI SYSTEM INVERT

Gauged Hole

Resistance to Chemical Contamination

Lubricity

Excellent Hole Cleaning

No disposal problems (passed Microtox EC50 Bioassay) LC50

No aromatics to cause harm to rig personnel

No extra rigging up costs required

Less Expensive (equipment rental, trucking)

Solids Tolerance

Gauged Hole

Resistance to Chemical Contamination

Drilling water sensitive shale's

Lubricity

Fast Penetration Rates

Solids Tolerance

Composition of NFSI System

NFS-VISCAPSULETM Viscosifier

NFS-FILTRATECAPSULETM Filtrate Control

NFS-SHALECAPSULETM Shale Stabilizer

NFS-TORQCAPSULETM Friction Reducer

NFS-LUBRACAPSULETM Accelerator / ROP Enhancer

Composition of NFSI System

NFS-FILTRATECAPSULETM Filtrate Control

NFS-TORQCAPSULETM Friction Reducer

NFS-VISCAPSULETM Viscosifier

NFS-SHALECAPSULETM Shale Stabilizer

NFS-LUBRACAPSULETM Accelerator / ROP Enhancer

Before Shale Exposure After Hot Roll and DryingSample from Arkansas

EconomicsSignificantly lower total cost per barrel

No environmental clean-up cost

No cuttings transportation cost

Lower transportation cost

Availability of fresh or seawater as base fluid

Low maintenance cost

EconomicsSignificantly lower total cost per barrel

NFS-Super SystemInvert

Test ID NFS- Super System TEST DATE Jan-17-2007 Test Group NFS-Houston lab 01172007 TESTED BY Mano Shaarpour/Sam Khosh

SAMPLE VOLUME 350 ml/275

PRODUCTS/MIXTURES PRODUCTS     UNITS 1 2   1a 2a       Freshwater     ml 350 275   350 275       NFS-VISCAPSULE™   g 11.0 9.5   11.0 9.5       NFS-FILTRATECAPSULE™ g 2.0 1.0   2.0 1.0       NFS-TORQCAPSULE™ ml 3.5 3.5   3.5 3.5       NFS-LUBRACAPSULE™ ml 3.5 3.5   3.5 3.5       NFS-SHALECAPSULE™ ml 7.0 7.0   7.0 7.0       Rev Dust   g 5.0 4.0   5.0 3.0                            Barite g 250 205                                      PERIOD AGED   HOURS       16 16       TEMPERATURE   °F       150 150       DYNAMIC/STATIC   D/S       D D       RHEOLOGY: TEMP. °F 120 120   120 120        600 RPM     71 74   69 71        300 RPM     46 48   43 44        200 RPM     31 33   29 30        100 RPM     19 18   20 17        6 RPM     6 5   5 4        3 RPM     4 3   3 3        GELS 10"   lbs/100ft2 4 3   3 3        GELS 10'   lbs/100ft2 6 5   5 6                             PLASTIC VISC. cP 25 26   26 27        YIELD POINT   lbs/100ft2 21 22   17 17       Accretion ANAHUAC %       50.6 51.6        OXFORD %       39.2 36.8       Lubricity   5/10 Min       .09/.11 .12/.14       API FLUID LOSS   ml       3.4 4.4       SHALE EROSION %   %       1.6 1.8       pH         10.4 10.1   9.8 9.6       COMMENTS: Testing and evaluations of NFS-Super System with new NFS-Shalecapsule    test number one is with full 350 cc water and test number 2 is with 275 cc for a finish barrel of mud 12.2 ppg   The results of 1 a and 2 a are after the hot rolling          

Location: Woodville, TXWell name: ETOC T. HoleTotal depth: 7300’

Casing 9/58” and 7/78”Mud System: NFS-Super System Water base.

Drilled a 12/25” surface hole to 1750’ with conventional gel/water mud. Sat the surface casing 9/58” casing and tested the casing.

--Cleaned the mud tanks and filled with freshwater and began additions of NFS-Super System.

--Added 10 ppb of NFS-Viscapsule, 1% by volume NFS-Shalecapsule, followed by 1% by volume

NFS-Torqcapsule. --Maintained a 31-34 funnel viscosity and drilled cement with the new mud system. Drilled approximately 120’ cement without any contamination.--Began drilling the 8¾” hole with super system from 1750’ to 2800’. Maintained chemical

addition except for NFS-Shalecapsule; at this point mud viscosity was too high. Water was added to the

system and the desander/desilter was started.

Well Recap

--Drilling stopped and pulled the bit to casing and began to circulate and conditioned mud. Added large

volume of water and additions of NFS-Viscapsule, NFS-Shalecapsule and NFS-Torqcapsule; time

to condition mud was approximately 4 hours.--Mud was conditioned and resumed drilling operation. Drilling continued at the fast rate of penetration (drilled 1200’ in approximately 12 hours)--Drilled the 8 ¾” to 6500’ and increased mud density to 9.6 ppg from 9.1 ppg using barite. Chemical addition continued to maintain a <6 cc filtrate.--Drilling continued to 7300’ total depth. Circulated bottoms up, made a short trip, back to bottom with no fill.--Pulled the bit out of hole and ran successful logs to bottom, no fill. Ran the casing bottom, no fill.

Well Recap continued

Conclusion:

NFS-Super System was used successfully to drill this 7300’ well in record time. Total drilling

days were reduced by two days, a gage hole was drilled and logged the well successfully.

Surface hole from 1750’ to approximately 6500’ had lots of reactive shale and clay, which was

encapsulated with the NFS-Super System. While drilling cement, no contamination was observed; in addition the shale shakers handled the flow rate without any gumbo

sticking to the screens.

Important information to apply for future wells:

A: Run MBT every 1000-1500’ of new hole drilled. Maintain a MBT of <10B: Run good stream of water at shaker while your drilling, any other water base

muds, 15% to 20% dilution

C: Run shaker screens of 150 to 210 mesh, plus run desander/desilter as long as possible

Well Recap continued

Conclusion

This new and revolutionary water based system is nowavailable. NFSI is excited, prepared, and anxiouslyawaiting to help meet your drilling needs.

NFSI currently has finished product available in inventorylocated in Houston, TX.

713-780-3600 www.newfluid.com

Questions?