Harold E. McGowen III
`
`1
`
` 1 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` 2
`
` BAKER HUGHES INCORPORATED and )
` 3 BAKER HUGHES OILFIELD )
` OPERATIONS, INC. )
` 4 )
` Petitioners, ) IPR2016-00596
` 5 ) Patent
` vs. ) 7,134,505 and
` 6 ) other patents
` PACKERS PLUS ENERGY SERVICES, )
` 7 INC., )
` )
` 8 Patent Owner. )
`
` 9
`
` 10 -------------------------------------
`
` 11 ORAL AND VIDEOTAPED DEPOSITION OF
`
` 12 HAROLD E. MCGOWEN III
`
` 13 February 28, 2017
`
` 14 -------------------------------------
`
` 15
`
` 16 ORAL DEPOSITION of HAROLD E. MCGOWEN III, produced
`
` 17 as a witness the instance of the Petitioners, and duly
`
` 18 sworn, was taken in the above styled and numbered cause
`
` 19 on February 28, 2017, from 8:42 a.m. to 4:50 p.m.
`
`BAKER HUGHES INCORPORATED
` 20 before Jeff L. Foster, a Certified Shorthand Reporter
`AND BAKER HUGHES OILFIELD
` 21 in and for the State of Texas, at the offices of
`OPERATIONS, INC.
`EXHIBIT 1030
` 22 Caldwell, Cassady, Curry, 2101 Cedar Springs, Road,
`BAKER HUGHES INCORPORATED
`AND BAKER HUGHES OILFIELD
` 23 Suite 1000, Dallas, Texas 75201, pursuant to the
`OPERATIONS, INC. v. PACKERS
` 24 Federal Rules of Civil Procedure and the provisions
`PLUS ENERGY SERVICES, INC.
`IPR2016-00597
`
` 25 stated on the record.
`
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`1
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` 1 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` 2
`
` BAKER HUGHES INCORPORATED and )
` 3 BAKER HUGHES OILFIELD )
` OPERATIONS, INC. )
` 4 )
` Petitioners, ) IPR2016-00596
` 5 ) Patent
` vs. ) 7,134,505 and
` 6 ) other patents
` PACKERS PLUS ENERGY SERVICES, )
` 7 INC., )
` )
` 8 Patent Owner. )
`
` 9
`
` 10 -------------------------------------
`
` 11 ORAL AND VIDEOTAPED DEPOSITION OF
`
` 12 HAROLD E. MCGOWEN III
`
` 13 February 28, 2017
`
` 14 -------------------------------------
`
` 15
`
` 16 ORAL DEPOSITION of HAROLD E. MCGOWEN III, produced
`
` 17 as a witness the instance of the Petitioners, and duly
`
` 18 sworn, was taken in the above styled and numbered cause
`
` 19 on February 28, 2017, from 8:42 a.m. to 4:50 p.m.
`
`BAKER HUGHES INCORPORATED
` 20 before Jeff L. Foster, a Certified Shorthand Reporter
`AND BAKER HUGHES OILFIELD
` 21 in and for the State of Texas, at the offices of
`OPERATIONS, INC.
`EXHIBIT 1030
` 22 Caldwell, Cassady, Curry, 2101 Cedar Springs, Road,
`BAKER HUGHES INCORPORATED
`AND BAKER HUGHES OILFIELD
` 23 Suite 1000, Dallas, Texas 75201, pursuant to the
`OPERATIONS, INC. v. PACKERS
` 24 Federal Rules of Civil Procedure and the provisions
`PLUS ENERGY SERVICES, INC.
`IPR2016-00597
`
` 25 stated on the record.
`
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`Harold E. McGowen III
`
`1
`
` 1 IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` 2
`
` BAKER HUGHES INCORPORATED and )
` 3 BAKER HUGHES OILFIELD )
` OPERATIONS, INC. )
` 4 )
` Petitioners, ) IPR2016-00596
` 5 ) Patent
` vs. ) 7,134,505 and
` 6 ) other patents
` PACKERS PLUS ENERGY SERVICES, )
` 7 INC., )
` )
` 8 Patent Owner. )
`
` 9
`
` 10 -------------------------------------
`
` 11 ORAL AND VIDEOTAPED DEPOSITION OF
`
` 12 HAROLD E. MCGOWEN III
`
` 13 February 28, 2017
`
` 14 -------------------------------------
`
` 15
`
` 16 ORAL DEPOSITION of HAROLD E. MCGOWEN III, produced
`
` 17 as a witness the instance of the Petitioners, and duly
`
` 18 sworn, was taken in the above styled and numbered cause
`
` 19 on February 28, 2017, from 8:42 a.m. to 4:50 p.m.
`
` 20 before Jeff L. Foster, a Certified Shorthand Reporter
`
` 21 in and for the State of Texas, at the offices of
`
` 22 Caldwell, Cassady, Curry, 2101 Cedar Springs, Road,
`
` 23 Suite 1000, Dallas, Texas 75201, pursuant to the
`
` 24 Federal Rules of Civil Procedure and the provisions
`
` 25 stated on the record.
`
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`Harold E. McGowen III
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`2
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` 1 A P P E A R A N C E S
`
` 2 THE PETITIONERS:
`
` 3 Mr. Mark T. Garrett
` NORTON, ROSE, FULBRIGHT US, LLP
` 4 98 San Jacinto Boulevard, Suite 1100
` Austin, Texas 78701-4255
` 5 (512) 474-5201
` mark.garrett@nortonrosefulbright.com
`
` 6
`
` FOR THE PATENT OWNER:
`
` 7
`
` Mr. Justin Nemunaitis
` 8 CALDWELL, CASSADY, CURRY
` 2101 Cedar Springs Road, Suite 1000
` 9 Dallas, Texas 75201
` (241) 888-4853
` 10 jnemunaitis@caldwellcc.com
`
` 11 ALSO APPEARING
`
` 12 Mr. David Guerra, videographer
` Mr. Darin Duphorne, by telephone
`
` 13
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`Harold E. McGowen III
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`3
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` 1 I N D E X
`
` 2 PAGE
`
` 3 Appearances............................. 2
` HAROLD E. MCGOWEN III
` 4 Examination by Mr. Garrett 4
`
` 5 Signature Page.......................... 196
` Reporter's Certificate.................. 198
`
` 6
`
` EXHIBITS
`
` NO. DESCRIPTION PAGE
`
` 7
`
` 8
`
` Exhibit 1018............................... 120
` 9 qrySumNetValuebyFamily table
` Exhibit 1027............................... 120
` 10 qrySumNetValuebyFamily for IPR2016-00596
` Exhibit 1027............................... 120
` 11 qrySumNetValuebyFamily for IPR2016-00597
` Exhibit 1032............................... 178
` 12 Drawing for IPR2016-00657
` Exhibit 1032............................... 178
` 13 Drawing for IPR2016-00656
` Exhibit 1033............................... 180
` 14 Sketch made by witness regarding
` IPR2016-00656
`
` 15
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` 16
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` 17
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`Harold E. McGowen III
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`4
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` 1 P R O C E E D I N G S
`
` 2 THE VIDEOGRAPHER: On the record at
`
` 3 8:42 a.m., February 28th, 2017 for the deposition of
`
` 4 Harold -- for the deposition of Harold E. McGowen, III,
`
` 5 in the matter of Baker Hughes, Incorporated versus
`
` 6 Packers Plus Energy Services. Counsel, please state
`
` 7 your appearances and then the court reporter will
`
` 8 administer the oath.
`
` 9 MR. GARRETT: This is Mark Garrett for
`
` 10 the petitioners. With us on the phone is Darin
`
` 11 Duphorne, in-house counsel for the petitioners, and I'm
`
` 12 from Norton, Rose, Fulbright.
`
` 13 MR. NEMUNAITIS: And Justin Nemunaitis
`
` 14 with Caldwell, Cassady, Curry for the respondent.
`
` 15 HAROLD E. MCGOWEN, III,
`
` 16 having been first duly sworn, testified as follows:
`
` 17 EXAMINATION
`
` 18 BY MR. GARRETT:
`
` 19 Q. Mr. McGowen, this deposition is going to cover
`
` 20 six different proceedings pertaining to six different
`
` 21 patents. I'll name them so that we're all square on
`
` 22 that. The first is IPR2016-00596, which corresponds to
`
` 23 the '505 patent. The next is IPR2016-00597, which
`
` 24 corresponds to the '634 Patent. Next is
`
` 25 IPR2016-00598, which corresponds to the '774 Patent.
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`Harold E. McGowen III
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`5
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` 1 Next is IPR2016-00650, which corresponds to the
`
` 2 '936 Patent. Next is IPR2016-00656, which corresponds
`
` 3 to the '009 Patent. And, finally, IPR2016-00657, which
`
` 4 corresponds to the '451 Patent.
`
` 5 Are we on the same page about that?
`
` 6 A. Well, I haven't memorized all those numbers,
`
` 7 so just have to -- have to proceed from here, I guess.
`
` 8 Q. Understood. Let's start with Ellsworth. I'll
`
` 9 hand you a copy. And this is Exhibit 1004 from the 596
`
` 10 proceeding. And for your understanding, when I refer
`
` 11 to the proceeding, the three numbers that I'm using are
`
` 12 the 596, the 597, the 598, any of the last three
`
` 13 numbers of the IPR.
`
` 14 A. I'm sorry, could you say that one more time?
`
` 15 Q. Yeah. So if I refer to a proceeding, like the
`
` 16 596 proceeding, I'm referring to that IPR number that's
`
` 17 IPR2016-00596. But I'm also talking about the patent
`
` 18 in that proceeding.
`
` 19 A. Okay.
`
` 20 Q. Which for the 596 is the '505 Patent.
`
` 21 A. Okay.
`
` 22 Q. Would it help to refer to just the patent
`
` 23 numbers as opposed to --
`
` 24 A. Actually, it would, yes.
`
` 25 Q. That's what I'll do. You've read and are
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`6
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` 1 familiar with Ellsworth, correct?
`
` 2 A. Yes.
`
` 3 Q. The second case history concerns a well that
`
` 4 is depicted in figure 7 on page 5 of Ellsworth; is that
`
` 5 correct?
`
` 6 A. So it says -- on page 4 of 9 it says, "Case
`
` 7 History Number Two"? Is that the one you're referring
`
` 8 to?
`
` 9 Q. It is the one I'm referring to. And if you
`
` 10 toggle to page 5, the first paragraph of the first
`
` 11 column of that page --
`
` 12 A. Yes.
`
` 13 Q. -- refers to figure 7. Do you see that?
`
` 14 A. I do, yes.
`
` 15 Q. So do you agree with me that figure 7 is the
`
` 16 well that pertains to case history number two --
`
` 17 A. Yes.
`
` 18 Q. -- in Ellsworth? The toe of that well
`
` 19 intersects a productive zone as shown in figure 7; is
`
` 20 that right?
`
` 21 A. Yes.
`
` 22 Q. And they ultimately produced from that zone,
`
` 23 did they not?
`
` 24 A. Well, it's not -- it's not completely clear,
`
` 25 but there's a graph here on figure 8. I'm trying to
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`Harold E. McGowen III
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`7
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` 1 make sure that's referring to this particular case.
`
` 2 It shows the toe only making gas.
`
` 3 Q. In addition to that, if we go back to page 4,
`
` 4 the second column, the second sentence under case
`
` 5 history number two, it talks about the fingers present
`
` 6 with recoverable reserves. Do you see that?
`
` 7 A. It does say there's recoverable reserves.
`
` 8 Q. And the reference to fingers I took to mean
`
` 9 what appear to be three fingerlike sections of the
`
` 10 reservoir shown in figure 7, the topmost of which is
`
` 11 intersected by the toe.
`
` 12 A. Yes. So it says that the reserves were
`
` 13 recoverable, but I don't read there that it says that
`
` 14 they were recovered.
`
` 15 Q. Would it have made sense to acidize --
`
` 16 MR. DUPHORNE: Hey, Mark, are you there?
`
` 17 MR. GARRETT: We are.
`
` 18 MR. NEMUNAITIS: Oh, that was the hang-up
`
` 19 button.
`
` 20 THE VIDEOGRAPHER: Off the record? Go
`
` 21 off the record, fellows? Everybody?
`
` 22 MR. GARRETT: Please, yes.
`
` 23 THE VIDEOGRAPHER: Off the record at
`
` 24 8:50 a.m.
`
` 25 (Recess taken.)
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`8
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` 1 THE VIDEOGRAPHER: Back on the record at
`
` 2 8:53.
`
` 3 Q. (BY MR. GARRETT) Mr. McGowen, I'm not sure
`
` 4 where we left off, so I'm going to strike whatever I
`
` 5 started to say --
`
` 6 A. Okay.
`
` 7 Q. -- and start over --
`
` 8 A. Okay.
`
` 9 Q. -- with a new question. That question is,
`
` 10 they acidized the toe of this particular well, correct?
`
` 11 A. Well, let's see. Are you referring to page 6
`
` 12 where they say "results"? "The initial acid job using
`
` 13 SBPs indicated the tools successfully provided
`
` 14 isolation during the job"? Is that the sentence you're
`
` 15 referring to or --
`
` 16 Q. That is one place where it is mentioned. It
`
` 17 is also mentioned on page 5, the second column under
`
` 18 "Installation and Operations" where it says, "Prior to
`
` 19 running the production assembly SBPs were run to
`
` 20 acidize the toe of the well."
`
` 21 A. Okay. So it says that they were run to
`
` 22 acidize the toe, but they didn't say that they acidized
`
` 23 the toe.
`
` 24 Q. To go back and address the first point we were
`
` 25 discussing, on page 6, the second column, there's a
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`9
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` 1 sentence in the second paragraph that says, "The
`
` 2 production has been alternated between producing the
`
` 3 toe only and adding the heel." Do you see that?
`
` 4 A. Let's see. I'm sorry, where is that?
`
` 5 That's --
`
` 6 Q. That is page 6, the second column and the
`
` 7 second paragraph at the second sentence of that
`
` 8 paragraph.
`
` 9 A. Okay. Yes, I see that.
`
` 10 Q. Does that shed light on whether they produced
`
` 11 from the toe of the figure 7 well?
`
` 12 A. That does sound like they produced something
`
` 13 from the toe.
`
` 14 Q. The purpose of acidizing is to acidize, right?
`
` 15 A. I don't think I would put it that way.
`
` 16 Q. How would you put it?
`
` 17 A. Well, the purpose of acidizing is to improve
`
` 18 the permeability near the wellbore in the matrix.
`
` 19 Q. And that could be achieved by acid fracturing,
`
` 20 right?
`
` 21 A. Acid fracturing is a different methodology.
`
` 22 You're actually trying to initiate a crack and move
`
` 23 acid away from the wellbore, whereas this appears to be
`
` 24 a matrix acidizing job.
`
` 25 Q. Did the term acidizing necessarily exclude
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` 1 acid fracturing?
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`10
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` 2 A. They're two different things. Acidizing and
`
` 3 acid fracturing are two separate and different things.
`
` 4 Q. So in your view when the authors used the term
`
` 5 acidizing, they were excluding acid fracturing?
`
` 6 A. Acidizing is below fracture pressure. So
`
` 7 whatever the fracture gradient for that particular
`
` 8 formation is, you try to pump below that and you're
`
` 9 pushing acid into the matrix of the formation to try to
`
` 10 dissolve carbonate material in pore spaces to remove
`
` 11 damage near the wellbore.
`
` 12 Q. Are you more likely to stimulate production if
`
` 13 you acid fracture than if you matrix acidize?
`
` 14 A. That would depend on the formation.
`
` 15 Q. Do you know the answer by reading Ellsworth?
`
` 16 A. I would have to examine the permeability of
`
` 17 this formation, and you would need to do some sort of a
`
` 18 simulation work to determine if you thought an acid
`
` 19 frac was necessary.
`
` 20 Q. Can you think of a carbonate formation that
`
` 21 would have been less likely to be more productive from
`
` 22 acid -- or matrix acidizing than acid fracturing?
`
` 23 A. I'm not sure I quite understand the question.
`
` 24 Q. Well, the goal of acidizing is to stimulate
`
` 25 production, right?
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`11
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` 1 A. Well, that's a generic term, stimulate. But
`
` 2 you've got far field damage in a reservoir potentially,
`
` 3 you've got near field damage, you've got skin damage is
`
` 4 what you would call it near the wellbore. If you're in
`
` 5 a very low permeability reservoir, then you do some
`
` 6 sort of fracturing to create a conduit, a high
`
` 7 permeability conduit to the wellbore from the far
`
` 8 field.
`
` 9 With matrix acidizing, you're just trying
`
` 10 to remove skin damage oftentimes that's caused by
`
` 11 drilling mud invasion near the wellbore. So in a high
`
` 12 permeability reservoir, which I suspect this -- this
`
` 13 probably is; I haven't examined the permeability
`
` 14 figures for this, but this is probably a high
`
` 15 permeability reservoir and you're just trying to remove
`
` 16 skin damage near the wellbore with an acid job.
`
` 17 Q. At that point in the production of the well,
`
` 18 you know -- an operator would know the fracture
`
` 19 pressure of the well, would they not?
`
` 20 A. You could estimate it, but in order to know
`
` 21 what the fracture gradient is, to be able to actually
`
` 22 measure it, you need to actually create a fracture in
`
` 23 the rock.
`
` 24 Q. And would the driller have done that with a
`
` 25 casing shoe leak off test?
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`Harold E. McGowen III
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`12
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` 1 A. He might have. I don't know that that was
`
` 2 done on this well. The casing shoe appears to me to be
`
` 3 here before you actually enter the reservoir in this
`
` 4 drawing. So that wouldn't really tell you very much
`
` 5 about the fracture gradient at the toe, for example.
`
` 6 Q. Would there be a lot of variability between
`
` 7 the fracture gradient from the toe to the first place
`
` 8 that they were able to fracture with the leak off test?
`
` 9 A. Possibly there could be. It depends on what
`
` 10 type of rock you set your casing shoe in. Oftentimes
`
` 11 you'll look for a competent shale to set a casing shoe,
`
` 12 because it has a high frac gradient. Or you're looking
`
` 13 for a point where you just entered the reservoir maybe
`
` 14 past that shale, and so there could be variability
`
` 15 along the wellbore. There's not -- I don't have enough
`
` 16 information here to really opine on that.
`
` 17 Q. Would you expect a fracture gradient for shale
`
` 18 to be encountered in this formation, the figure 7
`
` 19 formation?
`
` 20 A. I don't know if there is any data in this
`
` 21 paper that -- that tells me what the different laminae
`
` 22 in the reservoir are.
`
` 23 Q. Would shale have a higher or lower fracture
`
` 24 gradient than a carbonate formation like the one that's
`
` 25 in figure 7?
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`Harold E. McGowen III
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`13
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` 1 A. Typically shales have a high fracture
`
` 2 gradient.
`
` 3 Q. Would you want -- if you were going to run
`
` 4 packers to withstand matrix acidizing, would it be good
`
` 5 engineering practice to engineer them to handle
`
` 6 fracture pressure?
`
` 7 A. I can't really say why you would need to do
`
` 8 that. If you know what your pressure differentials are
`
` 9 going to be in what is probably a fairly depleted
`
` 10 reservoir, there really wouldn't be any need to plan
`
` 11 for extremely high pressures.
`
` 12 Q. How much higher of a pressure do you think the
`
` 13 fracture gradient -- or, sorry, the fracture pressure
`
` 14 would be than the reservoir pressure in a formation
`
` 15 like this one in figure 7?
`
` 16 A. Well, as I understood it, this is -- I'm
`
` 17 trying to review this real quickly here.
`
` 18 Q. Take as much time as you need.
`
` 19 A. So this -- this formation -- it says on page
`
` 20 1, "The formation tends to be a prolific producer due
`
` 21 to the high matrix permeability and porosity."
`
` 22 MR. GARRETT: Could we go off the record
`
` 23 for just a second?
`
` 24 THE VIDEOGRAPHER: Off the record at
`
` 25 9:03 a.m.
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`Harold E. McGowen III
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`14
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` 1 (Recess taken.)
`
` 2 THE VIDEOGRAPHER: Back on the record at
`
` 3 9:05.
`
` 4 Q. (BY MR. GARRETT) Mr. McGowen, the question
`
` 5 that I had asked was how much higher of a pressure do
`
` 6 you think the fracture pressure would be than the
`
` 7 reservoir pressure in the formation like the one in
`
` 8 figure 7?
`
` 9 A. Well, if you look at page 2, the first
`
` 10 paragraph on the first column it says, "The field was
`
` 11 initially produced through a primary production mainly
`
` 12 using gas lift. Both gas reinjection and water
`
` 13 injection had been used as recovery mechanisms and to
`
` 14 provide pressure maintenance for the field. Part of
`
` 15 the Rainbow Lake Field is now under tertiary recovery
`
` 16 utilizing a solvent flooding procedure."
`
` 17 So that means that they've pulled the
`
` 18 initial reservoir pressure down appreciably. So part
`
` 19 of the equation for fracture gradient includes a term
`
` 20 for a pore pressure or reservoir pressure. So it looks
`
` 21 to me like this is a highly depleted field and we're
`
` 22 past secondary recovery and we're into tertiary
`
` 23 recovery. So you're dealing with extremely low
`
` 24 pressures in this reservoir and I would expect the
`
` 25 fracture gradient to be extremely low.
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`Harold E. McGowen III
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`15
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` 1 Q. So is there a percentage that you would feel
`
` 2 comfortable putting on how much higher the fracture
`
` 3 pressure than the reservoir pressure would be for the
`
` 4 figure 7 well?
`
` 5 A. Well, you really need to have more data to
`
` 6 calculate that. There is an equation for that, but you
`
` 7 need -- you need inputs to the equation.
`
` 8 Q. Matrix acidizing would tend to lower the
`
` 9 fracture pressure, would it not?
`
` 10 A. If you were dealing with a perforated
`
` 11 completion, you might see a reduction in the initial
`
` 12 pressure required to initiate a fracture. The tensile
`
` 13 strength of the rock itself is one of the major factors
`
` 14 in determining a fracture gradient. So pore pressure,
`
` 15 tinsel strength to the rock, those are some of the main
`
` 16 controlling parameters. So I wouldn't expect that the
`
` 17 acid job would have any significant effect on the
`
` 18 fracture gradient.
`
` 19 Q. Could have some effect, though.
`
` 20 A. I would have to do some more research on that.
`
` 21 I've never heard of that really being an issue with
`
` 22 acidizing -- matrix acidizing in an open hole.
`
` 23 Q. So you haven't taken the position that matrix
`
` 24 acidizing in an open hole tends to lower the fracture
`
` 25 pressure of that hole?
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`Harold E. McGowen III
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`16
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` 1 A. No, I'm not -- I don't have a position on that
`
` 2 right now.
`
` 3 Q. Would a person of ordinary skill in the art --
`
` 4 and let's call that individual a POSITA, P-O-S-I-T-A.
`
` 5 A. All right.
`
` 6 Q. So that I'm not repeating those five or six
`
` 7 words over and over again. Would -- would a POSITA be
`
` 8 over-engineering the solid body packers in the figure 7
`
` 9 completion assembly by making sure that they were
`
` 10 capable of withstanding fracture pressure when they ran
`
` 11 it in to acidize the toe of the well?
`
` 12 A. Could you define over-engineering, please?
`
` 13 Q. What does that term mean to you?
`
` 14 A. Well, I think it's sort of a pejorative term.
`
` 15 It's not a technical term. I think it's vague and
`
` 16 probably impossible to define.
`
` 17 Q. What would be the downside to engineering the
`
` 18 solid body packers that you were going to run with the
`
` 19 assembly that acidized the toe of the figure 7 well to
`
` 20 withstand fracture pressure?
`
` 21 A. It could be that they're more expensive than
`
` 22 they need to be and more complicated than they need to
`
` 23 be.
`
` 24 Q. So expense would be a driver in how the person
`
` 25 engineered the packers?
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`Harold E. McGowen III
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`17
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` 1 A. Well, I mean, I don't know why you wouldn't
`
` 2 just run inflatable packers for the -- for a matrix
`
` 3 acid job. Which seems to me might be easier to actuate
`
` 4 something that's been used in the past.
`
` 5 Q. Do you think they made a mistake by running
`
` 6 the solid body packers instead of inflatable packers?
`
` 7 A. I'd have to really see the economics of this
`
` 8 whole project to make a determination if it was a
`
` 9 prudent engineering practice or not.
`
` 10 Q. But you wouldn't want -- sorry, you wouldn't
`
` 11 want to waste money when you didn't have to?
`
` 12 A. I don't know whether they wasted money or not.
`
` 13 Q. You wouldn't want to spend money that you
`
` 14 didn't have to spend.
`
` 15 A. Well, didn't have to spend, meaning that
`
` 16 you're going to get exactly the same result no matter
`
` 17 which way you go with a design? Is that what you're
`
` 18 asking?
`
` 19 Q. That would be one way to look at it, but I
`
` 20 don't think it would be the only way to look at it.
`
` 21 A. Well, I mean, the objective of the completion
`
` 22 engineer is to maximize profit and to get an acceptable
`
` 23 internal rate of return and net present value for the
`
` 24 overall project. So if -- I don't know all the
`
` 25 economics of this project, so all I know is that, you
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`Harold E. McGowen III
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`18
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` 1 know, what they say in this paper right here.
`
` 2 So it may or may not have been
`
` 3 appropriate or prudent engineering practice. In this
`
` 4 application I'd have to see both of the alternatives
`
` 5 and look at the incremental economic analysis of the
`
` 6 two to make -- to opine on whether this was
`
` 7 over-engineered, so to speak.
`
` 8 Q. But, I mean, economics drives decisions about
`
` 9 how to do completions, right?
`
` 10 A. Yes.
`
` 11 Q. And it drove them back at the time of the
`
` 12 invention, right?
`
` 13 A. Yes.
`
` 14 Q. People of ordinary skill in the art were
`
` 15 incentivized to try to complete wells in a way that was
`
` 16 as economical as possible, right?
`
` 17 A. Well, economics is -- in oil and gas
`
` 18 production and completion operations is going to be
`
` 19 defined by the lifting cost or the finding cost and
`
` 20 that's a dollars per barrel or dollars per MCF.
`
` 21 So if you ignore the time value of money
`
` 22 and just look at dollars in and dollars out -- so you
`
` 23 have a numerator and a denominator, so you can either
`
` 24 increase production or reduce cost or you can do both.
`
` 25 So just spending money to -- just
`
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`Page 18 of 199
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`Harold E. McGowen III
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`19
`
` 1 designing your operations to reduce costs may, in fact,
`
` 2 reduce the economic benefit of that project.
`
` 3 Q. Would it have violated prudent engineering
`
` 4 practice to run solid body packers into the toe of the
`
` 5 figure 7 well that were engineered to withstand
`
` 6 fraccing pressure?
`
` 7 A. No.
`
` 8 Q. Okay, Mr. McGowen, I'm handing you the '505,
`
` 9 '634 and '774 Patents.
`
` 10 A. Okay.
`
` 11 Q. Take a moment to look at those. Some of the
`
` 12 claims in the '505 and the '634 Patents are method
`
` 13 claims, right?
`
` 14 A. Can you point me to the claims that you're
`
` 15 talking about, please?
`
` 16 Q. Claims 19 to 27 of the '505 Patent.
`
` 17 A. Can you help me out with a page number maybe?
`
` 18 Q. Yeah, go to the next to last page in the
`
` 19 '505 Patent and claim 19 starts near the bottom of
`
` 20 column 15.
`
` 21 A. Okay.
`
` 22 Q. So you see that claim 19 is an independent
`
` 23 claim?
`
` 24 A. Let's see. That's -- is that -- is that
`
` 25 column 16?
`
`DepoTexas, Inc.
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`Page 19 of 199
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`Harold E. McGowen III
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`20
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` 1 Q. 19 starts in column 15.
`
` 2 A. It just says 19 over here, right?
`
` 3 Q. Yes, that's right. That's where claim 19
`
` 4 starts.
`
` 5 A. All right. Thank you.
`
` 6 Q. Sure.
`
` 7 A. Sorry, this -- my old eyes and this lighting
`
` 8 are combining to make this hard for me to read.
`
` 9 Q. I'm sorry.
`
` 10 (Pause.)
`
` 11 Q. (BY MR. GARRETT) And I'll tell you what I
`
` 12 would like to know --
`
` 13 A. Okay.
`
` 14 Q. -- about the method claims in the '505 Patent.
`
` 15 Do any of them require the inducement of a fracture in
`
` 16 a formation?
`
` 17 A. I don't see the -- well, I'm sorry, I need to
`
` 18 read the rest of it here. No, I don't -- I don't see a
`
` 19 mention of the word fracturing in there.
`
` 20 Q. Look at the language at the end of 19 that
`
` 21 says, "Conveying the means for moving the second sleeve
`
` 22 to move the second sleeve and increasing fluid pressure
`
` 23 to force wellbore treatment fluid out through the
`
` 24 second port." Do you see that language?
`
` 25 A. Yes.
`
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`Page 20 of 199
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`Harold E. McGowen III
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`21
`
` 1 Q. Does that language require the inducement of a
`
` 2 fracture?
`
` 3 A. No.
`
` 4 Q. That same language appears in method claim 24
`
` 5 at the end of it, which is at the top of column 17. Do
`
` 6 you see it there too?
`
` 7 A. Yes.
`
` 8 Q. And is it still true in claim 24 of the
`
` 9 '505 Patent that that language does not require the
`
` 10 inducement of a fracture?
`
` 11 A. Yes.
`
` 12 Q. Does that language require that the fluid
`
` 13 pressure reach any particular level?
`
` 14 A. No.
`
` 15 Q. Does that language require that the wellbore
`
` 16 treatment fluid contain proppant?
`
` 17 A. No.
`
` 18 Q. And is that true for both claims 19 and 24?
`
` 19 A. I'm sorry, could you repeat the question? I'm
`
` 20 sorry, I had to read that.
`
` 21 Q. The question was whether the language at the
`
` 22 end of claim 24 required that the wellbore treatment
`
` 23 fluid contain proppant. And I believe your answer was
`
` 24 no?
`
` 25 A. I didn't see any mention of proppant in either
`
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`Page 21 of 199
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`Harold E. McGowen III
`
` 1 one of those claims.
`
`22
`
` 2 Q. Okay. And is that true for the dependent
`
` 3 claims, which are 20 through 23 and 25 through 27?
`
` 4 A. The dependent claims end --
`
` 5 Q. Well, --
`
` 6 A. -- at --
`
` 7 Q. -- you only have to go through 27.
`
` 8 A. Oh, okay.
`
` 9 Q. Just the dependent method claims.
`
` 10 A. I don't see any mention of proppant.
`
` 11 Q. So of all those method claims, no particular
`
` 12 fluid pressure has to be reached, right?
`
` 13 A. Correct.
`
` 14 Q. And proppant doesn't have to be used.
`
` 15 A. Correct.
`
` 16 Q. In the '634 Patent, if you go to the very last
`
` 17 page, the method claims are 20 through 25. And I have
`
` 18 the same questions about those claims. Do any of them
`
` 19 require the fluid pressure to reach a particular level
`
` 20 and do any of those claims require proppant?
`
` 21 A. So 20 is on page 19?
`
` 22 Q. It is, yes. It begins at the bottom of column
`
` 23 15.
`
` 24 A. Okay. So your question was on claim 20 in the
`
` 25 '634 Patent, did they specify proppant and pressures?
`
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`Page 22 of 199
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`Harold E. McGowen III
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`23
`
` 1 Is that what's your question?
`
` 2 Q. Yes. That's basically it, yes.
`
` 3 A. Okay. I don't see those -- either of those
`
` 4 terms used in that claim.
`
` 5 Q. Or in any of the dependent claims?
`
` 6 A. Correct.
`
` 7 Q. When we were talking about Ellsworth a minute
`
` 8 ago you mentioned that just because the author said
`
` 9 that, "Prior to running the production assembly SBPs
`
` 10 were run to acidize the toe of the well," that they may
`
` 11 not have, in fact, acidized, right?
`
` 12 A. I just said that it -- it doesn't say that
`
` 13 they acidized the toe.
`
` 14 Q. It just says that they did something to
`
` 15 acidize, right?
`
` 16 A. They ran the tools that would enable them to
`
` 17 acidize, I guess.
`
` 18 Q. Look at the '774 Patent. And if you would
`
` 19 like to take a minute to read through the claims, you
`
` 20 can, because I've got some questions about them.
`
` 21 (Pause.)
`
` 22 Q. (BY MR. GARRETT) Can I ask you a question?
`
` 23 A. Sure.
`
` 24 Q. Can you tell me what section you're reading?
`
` 25 A. 13.
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`Page 23 of 199
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`Harold E. McGowen III
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`24
`
` 1 Q. Oh, okay. Is it -- is that 13 and 14? Is
`
` 2 that what you said?
`
` 3 A. Yeah, I was --
`
` 4 Q. Okay. So you're reading the claims, --
`
` 5 A. Yes.
`
` 6 Q. -- right? I just wanted to make sure. Thank
`
` 7 you. Keep going. Tell me when you're done.
`
` 8 A. I'm trying to read quickly.
`
` 9 Q. It's all right. Take your time. I know it's
`
` 10 difficult.
`
` 11 (Pause.)
`
` 12 A. Okay. I read them all.
`
` 13 Q. (BY MR. GARRETT) Okay. All right. Turn to
`
` 14 the very last page and let's start with the language at
`
` 15 about line four of column 15 that reads, "Pumping
`
` 16 fracturing fluid through the second port and into the
`
` 17 second annular wellbore segment to fracture the
`
` 18 hydrocarbon containing formation." Do you see that?
`
` 19 A. It's at the top here?
`
` 20 Q. Yeah, column 15, so the left side of the page
`
` 21 and it begins at about line four. It begins with the
`
` 22 word "pumping."
`
` 23 A. Yes, I see that.
`
` 24 Q. Okay. Does that language require that a
`
` 25 fracture be for
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