`
`Baker Hughes Proceedings
`
`|PR2016-00596 (US. Pat. No. 7,134,505)
`
`|PR2016-00597 (U.S. Pat. No. 7,543,634)
`
`|PR2016-00598 (U.S. Pat. No. 7,861,774)
`
`

`

`Unless otherwise noted, all citations herein are to the exhibit
`list for |PR2016-o15o6 (774 patent). This exhibit list is available
`in the Patent Owner Response, Paper 51.
`
`All page citations are to the page numbers added for these
`proceedings, not the native page numbers ofthe article,
`document, etc.
`
`Frequently Cited Exhibits
`2050 - McGowen First Declaration
`2081 - McGowen Supplemental Declaration
`2017 - A. Daneshy First Deposition
`2085 - A. Daneshy Second Deposition
`
`

`

`Thomson
`
`Thomson
`
`3
`
`

`

`Q. And just to be clear, Thomson does
`not disclose pumping fracturing fluid
`into an open-hole annular segment,
`right?
`A. The paper does not describe that,
`no. The paper describes through a
`cemented casing in this case.
`
`Ex. 2085, A. Daneshy Depo. at 54:10-14
`
`4
`
`

`

`Q. Was one of the goals of Ellsworth
`to create multiple fractures through
`open-hole annular segments?
`A. It was not their main goal, no.
`Q. Did they do that?
`A. No, they didn't need to do that.
`That's why they didn't do it.
`
`Ex. 2085, A. Daneshy Depo. at 78:22-79:2
`
`5
`
`

`

`Q. Does the Ellsworth reference
`describe hydraulic fracturing?
`A. It describes acid stimulation,
`and it doesn't get into what
`pressures were used. So it’s not
`easy to discern whether the acid
`fractured the rock or not.
`
`Ex. 2044, V. Rao Depo. at 66:17-67:6
`
`6
`
`

`

`Petitioners must prove a motivation to remove a component.
`
`Pozen Inc. v. Par Pharm., Inc., 696 F.3d 1151, 1163 (Fed. Cir. 2012)
`
`Amkor Tech., Inc. v. Int'l Trade Comm'n, 692 F.3d 1250, 1260 (Fed. Cir. 2012)
`
`7
`
`

`

`5 4!?TUBING HANGER ;
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`Cement &
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`T“ RETRIEVAELE PACKER ca SI n g
`
`

`

`Q. Does the Thompson reference
`explain why the authors use
`cemented casing in the horizontal
`portion of the well?
`A. They don't go into it. As far
`as I can understand, the prior
`wells in that platform had used
`casing and cementing and so -- and
`they were asked to improve the
`efficiency of the prior wells, so
`they continued to use what was
`being used. I doubt it was a
`decision point.
`
`Ex. 2044, V. Rao Depo. at 65:11-19
`
`9
`
`

`

`Safety Risk
`
`Remedial
`Options
`
`Competitor
`Surveillance
`
`Risk of Frac Problems
`
`Formation
`Development
`
`Production
`Impact
`
`Completion
`System Cost
`
`Track Record
`
`10
`
`

`

`Harold McGowen - Fracturing Experience
`• President and CEO, Navidad Resources LLC
`
`• Overseen over 200 wellsites for NRL
`
`• Voted best CEO for a medium size producer (TIPRO)
`
`• Performed multi-year fracturing fluid performance
`study on 1,000 Codell-Niobrara refracs.
`
`• Performed reserves projections and economic
`evaluation of 250+ Bossier/Cotton Valley wells in the
`Bossier trend.
`
`Ex. 2050 at 54
`
`11
`
`

`

`Dr. Ali Daneshy – Fracturing Experience
`• Director of Petroleum Engineering at University of
`Houston
`• VP of Integrated Technology Products at Halliburton
`• SPE Distinguished Lecturer
`• Academic papers related to fracturing
`
`12
`
`

`

`Q. Did you write your report?
`A. Did I write it personally? No.
`[. . .]
`Q. When you say reports, and I may
`have said reports, but we're talking
`about your declarations, right?
`A. Yeah, exactly.
`
`Ex. 2017, A. Daneshy Depo. at 123:24-25, 124:17-20
`
`13
`
`

`

`Q. Well, let me just ask you this.
`What's your understanding of the legal
`test for proving that a patent claim is
`obvious?
`A. You're asking the wrong person. I
`think the definition is somebody -- a
`person of ordinary skill would be able
`to use the -- a person of ordinary skill
`would arrive at that, would come to the
`conclusion, I think. I don't want to
`give you -- because I know this is
`something that is -- I've worked with
`patent lawyers and this is one of those
`subjects that every time you get into
`it, each patent lawyer describes it
`different than others. But if a person
`of ordinary skill would arrive that it
`can be done. Based on existing available
`information, existing knowledge, they
`would say it could be done.
`
`Ex. 2017, A. Daneshy Depo. at 123:24-25, 124:17-20
`
`14
`
`

`

`In the very first declaration that Dr.
`Daneshy gave, he did not render a conclusion
`on the legal issue of obviousness with
`respect to Thomson and its use in an open-
`hole in combination with the Ellsworth
`reference.
`
`Ex. 2085 at 39:22-40:1 (Petitioners’ counsel)
`
`15
`
`

`

`
`
`16
`
`

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`
`19
`
`

`

`The P&P approach was the initial lower
`completion methodology that allowed the
`effective deployment of multi-fracture
`treatments in horizontal wells . . .
`
`Ex. 2001 at 5, A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and Economics, SPE
`164009 (2013); see also Ex. 2050, McGowen Decl. at 26; Paper 51, POR
`at 13-15.
`
`20
`
`

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`

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`Q. Why does that difference matter?
`MR. GARRETT: Objection, form.
`A. Because the location of the
`fracture influences [well]
`productivity and how the reservoir is
`being depleted. You want uniform
`depletion of reservoir fluid so that
`you get as much of the oil or gas out
`of the formation; and so for that, it
`is better to know more accurately
`where the fractures are located.
`
`Ex. 2017, A. Daneshy Depo. at 21:13-20
`Ex. 2050, McGowen Decl. at 28
`Paper 51, POR at 14
`
`30
`
`

`

`3131
`
`

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`32
`
`OPEN HOLE WELL
`NO CEMENT
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`Plug & Perf
`(Cemented Casing)
`
`Open Hole Multi-Stage
`(No Cemented Casing)
`
`38
`
`

`

`Plug & Perf
`(Cemented Casing)
`
`Open Hole Multi-Stage
`(No Cemented Casing)
`
`39
`
`

`

`Q. What do you mean by that?
`A. You are talking about two systems
`which are very different in the way
`they fracture. In a cemented liner
`completion, as I mentioned, when you
`create a fracture, it is where the
`perforations are. When you use
`external casing packers, the fracture
`-- with ports, with fracture ports --
`the fracture can be anywhere between
`the two external casing packers.
`
`Ex. 2016, A. Daneshy Depo. at 21:5-12
`
`40
`
`

`

`When you fracture the well from
`perforations, your fracture is likely
`to be right at or very near the
`perforation. And since the
`perforations -- the perforated
`interval in the well is a very short
`interval. It could be 12 inches, 18
`inches, as opposed to open space
`between two packers that could be 300
`feet, 400 feet. So when we say
`control, that's the extent of it,
`whether within a few feet or within
`several hundred feet.
`
`Ex. 2016, A. Daneshy Depo. at 29:8-16
`
`41
`
`

`

`A POSITA would be aware that
`there was an optimum distance
`between stages and that
`fracture spacing was critical
`to commercial success.
`
`Ex. 2050, McGowen Decl. at 28
`Paper 51, POR at 13-15
`
`42
`
`

`

`Q. Why would you care about
`controlling where a fracture
`initiates within a 12-to-18-inch
`span versus a 300-to-400-foot
`span?
`A. Because I want to produce the
`well in an optimum fashion. It
`influences the productivity of the
`well.
`
`Ex. 2017, A. Daneshy Depo. at 29:17-23
`
`43
`
`

`

`If you put a fracture at plus 10
`(which is 10 feet from that
`packer, on one side of it) and
`minus 10 (which is 10 feet from
`the packer on the other side of
`it), these two packers are 20 feet
`apart from each other. They
`basically drain the same segment
`of the well. You are not getting
`as much benefit from this as the
`case when the fracture is in the
`100 feet from the packer on one
`side and 100 feet from the packer
`on the other side.
`
`Ex. 2017, A. Daneshy Depo. at 30:6-14
`
`44
`
`

`

`During the period in question,
`it was thought that the
`formation of multiple
`hydraulic fractures that were
`too close together would also
`create complex near wellbore
`fracture geometries that were
`thought to be detrimental to
`successful fracture treatments
`and subsequent production.
`
`Ex. 2050, McGowen Decl. at 29
`Paper 51, POR at 13-15
`
`45
`
`

`

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`

`Fracture diagnostics during the first
`horizontal well revealed an unexpectedly
`complex near- wellbore fracture
`geometry, a result of fracture initiation
`problems. These problems slowed the
`completion process and severely harmed
`the effectiveness of the fracture-to-
`wellbore connection.
`
`Ex. 2066 at 1, Emanuele, SPE 39941 “A Case History:
`Completion and Stimulation of Horizontal Wells with Multiple
`Transverse Hydraulic Fractures in the Lost Hills Diatomite”
`(1998); Ex. 2050, McGowen Decl. at 27-29.
`
`49
`
`

`

`transversely fractured horizontal wellbores are
`still plagued by a number of problems, most
`of which stem from the complex fracture geo-
`metries connecting the wellbore to the main
`fracture. These complex fracture geometries
`usually take the form of multiple fractures,
`twisted fractures, H- or S-shaped fractures
`Ex. 2063 at 2, Crosby, D.G., “Methodology to Predict the Initiation of
`Multiple Transverse Fractures from Horizontal Wellbores” (2001); Ex.
`2050, McGowen Decl. at 27-29.
`
`50
`
`

`

`[A] decision was made to attempt a cased hole
`completion with a perforated interval not to
`exceed two (2) feet. It has been documented
`in literature and field proven that a smaller
`focused perforated interval (2 to 3 feet)
`enables a major fracture system to be initiated
`rather than several minor fractures which
`compete for fracturing fluid and ultimately are
`unable to propagate and extend.
`
`Ex. 2100 at 9, Murray, SPE 37354 “A Case Study for Drilling and
`Completing a Horizontal Well in the Clinton Sandstone” (1996); Ex.
`2081, McGowen Decl. at 24.
`
`51
`
`

`

`Several years ago, conventional wisdom
`held that a few widely spaced long
`length fractures were the best way to
`fully exploit the reservoir and ensure
`maximum economic ultimate recovery.
`
`Ex. 2011 at 4
`
`Paper 51,
`POR at 25
`
`52
`
`

`

`Recent experience has shown, however,
`that numerous closely spaced short
`fractures produce better results over the
`life of the reservoir. This outcome would
`seem to tilt the scale in favor of OHMS
`owing to its superior efficiency, but
`OHMS is not the predominant technique
`in many plays.
`
`Ex. 2011 at 4
`
`Paper 51,
`POR at 25
`
`53
`
`

`

`A. . . . That’s what a single
`fracture would have looked like. When
`you put 20, 30, 40 of these together,
`then they don't look like that.
`Q. What do they look like?
`A. Today the industry uses the term
`“complex” because they don't really
`know what it looks like.
`
`Ex. 2085, A. Daneshy Depo. at 87:16-23
`
`54
`
`

`

`Q. Are persons of skill in the art
`today trying to create complex
`fractures?
`A. Yes.
`
`Q. In the past, would a person of
`skill in the art try and avoid
`complex fractures?
`A. When is "past"?
`Q. The time before 2001.
`A. Yes, when we fractured vertical
`wells, we did not want to create
`complex fractures.
`Ex. 2085, A. Daneshy Depo. at 89:11-22
`
`55
`
`

`

`Q. Back before 2001, how did persons
`of skill in the art expect fractures
`to behave?
`A. They expected them to behave just
`like they did in vertical wells.
`
`Ex. 2085, A. Daneshy Depo. at 81:8-13
`
`56
`
`

`

`
`
`Fig. fi—Nanpiamrfracmr: geanmflifl.
`
`Ex. 2078 at 6 (Abass)
`Ex. 2078 at 6 (Abass)
`
`57
`57
`
`

`

`For a normal hydraulic
`fracturing treatment where
`proppant is used, if there is
`a leak around a packer during
`the hydraulic fracturing
`(“frac”) stage, excessive
`leak-off could cause a screen
`out event, resulting in a
`complete failure of that frac
`stage and loading the hole up
`with proppant that would have
`to be removed at great
`expense.
`
`Ex. 2034, McGowen Decl. at 33
`
`58
`
`

`

`To be effectively fracture stimulated, a
`horizontally drilled well must be cased and
`cemented through the horizontal producing
`section of the well. Casing and cementing
`the horizontal section allows fracture
`initiation points to be controlled in
`placing multiple fractures.
`
`Ex. 2098, Austin, SPE 18263, Simultaneous Multiple Entry Hydraulic
`Fracture Treatments of Horizontally Drilled Wells at 1 (1988); Ex.
`2081 at 24-25; Ex. 2081, McGowen Decl. at 24-25; Paper 51, POR
`at 20-21.
`
`59
`
`

`

`A horizontal well that is to be fracture
`stimulated over multiple zones must be
`cased and cemented.
`
`Ex. 2099, Owens, SPE 25058, Practical Considerations of Horizontal
`Well Fracturing in the “Danish Chalk” at 2 (1992); Ex. 2081,
`McGowen Decl. at 23; Paper 51, POR at 20-21.
`
`60
`
`

`

`Casing and cementing a horizontal well
`is essential to provide zone selectivity
`and isolation during fracture stimulation.
`
`Ex. 2078 at 9, Abass, H., “A Case History of Completing and
`Fracture Stimulating a Horizontal Well” SPE 29443 (1995);
`Paper 51, POR at 20-21.
`
`61
`
`

`

`Perforations play a crucial role in
`achieving a successful fracturing
`treatment in horizontal wellbores.
`
`Ex. 2078 at 9, Abass, H., “A Case History of Completing and
`Fracture Stimulating a Horizontal Well” SPE 29443 (1995);
`Paper 51, POR at 20-21.
`
`62
`
`

`

`EH. Abass. P. Resist. 1. Harry. 1.1.. that. M. Shumwly. N.Gazi
`
`and rapidlyr flattens after foutto five fractures. Based
`on the diminishing slope of the cumulative production
`vs. time cmveat24 months. fourorfive fractltres
`would bathe mosteffeclivenumbetoffracmresfottbe
`subject well. However, afieroonsideting the behavior
`of theWW system, designers considered
`economics and selected three fracmres forthe subject
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`coarse proppam was used as a tail-in stage.
`
`The stimulation treatment was designed to achieve the
`following objectives:
`
`'
`
`To create t'I taut-lit}1 hear the weil'hot'e. To ease the
`neat-wellhcte temicdcn. an acid stage was used to
`communicate all the hydrojetted notches. Fig. 5
`presentsaschematic oftheluugimdinalslou
`created uiahjrdrojetfing. Fig. 9 shouts acenceptual
`tersesentaticn of what might have happened after
`an acid meanem; Fig. Hi shows the mention of the
`mainfiacnneasitinitiatesfromthecafity.
`
`Te prevent the naturni fiuctnres intersecting the
`wetihsrefium initiating and prnpngntmg tnttitipie
`fiucmres. For fluid—loss contcl. lflfl-mesh sand was
`pumped after the pad.
`
`Te heip withstand the high compressive stress near
`the weiihere and reduce the pressure drop resulting
`film: the rudiniflew emergence. High-strength.
`coarse proppant was used as a tail-in stage.
`
`
`
`Fig. ?—Cwnuiative iiquid praduerian vs. the number of
`
`Stimulation Treatment
`.
`.
`.
`.
`Thesumdanunueannemwasdesignedtoachievetbe
`following objectives:
`
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`To create a cavity hear the weil'bore. To ease the
`neat-wellbore restriction. an acid stage was used to
`communicate all the hydrojemed notches. Fig. 8
`presents a schematic of the Iongimdinal slats
`created via bydrojetfing. Fig. 9 shows a conceptual
`regesenmtion of what might have happened after
`an acid meannent. Fig. 10 shows the creation of the
`mainframeasitiuitiateefromdiecavity.
`To prevent the natural fractures intersecting the
`weiibarefiom initiating and propagating multiple
`fiucmres. For fluid—loss cootol, IOU-mesh sand was
`pumped after the pad.
`To help withstand the high massive stress near
`the weiibore and reduce the pressure drop matting
`from the mdiaiflow emergence. High-strength.
`
`Fig. IG—Creatian ofthe minfincmre at iriniriatesfivm
`the cavity.
`
`7 of9
`
`Ex. 20?B
`|PR2016-01506
`
`Ex. 2078 at 9, Abass, H., “A Case History of Completing and
`Ex. 2078 at 9, Abass, H., ”A Case History of Completing and
`Fracture Stimulating a Horizontal Well” SPE 29443 (1995);
`Fracture Stimulating a Horizontal Well” SPE 29443 (1995);
`Paper 51, POR at 20-21.
`Paper 51, POR at 20-21.
`
`63
`
`

`

`Successful liner installation and
`cementation is considered a
`prerequisite to ensure adequate
`zonal isolation for multiple
`fracture treatments in horizontal
`wells.
`
`Ex. 2079 at 1, Damgaard, A.P., “A Unique Method for
`Perforating, Fracturing, and Completing Horizontal Wells” SPE
`19282 (1992); Paper 51, POR at 20-21.
`
`64
`
`

`

`In the Red Oak horizontal, the geologic
`expectation was to cross natural fractures and
`yield economic production without fracture
`stimulation. Natural fractures were not
`encountered and production was uneconomic
`from the openhole. Thus, the contingency
`plan to set and cement a liner to pump
`multiple transverse fractures was
`implemented.
`
`Ex. 1023 at 3, P.D. Ellis, Application of Hydraulic Fractures in Openhole
`Horizontal Wells, SPE 65464 (2000); Paper 41 Surreply at 3.
`
`65
`
`

`

`The main benefit of horizontal holes comes
`from their long contact with the permeable
`reservoir. Casing and perforating these
`holes reduces this contact. However,
`whenever completion operations require
`hydraulic fracturing, the horizontal
`holes are in fact cased, cemented, and
`perforated to facilitate effective
`fracturing.
`
`Ex. 2015, Encyclopedia of Hydrocarbons, at p. 8 (2007); Paper 51,
`POR at 21.
`
`66
`
`

`

`Some of the features of the OHMS approach
`are often depicted as disadvantages, such as
`the inferred inability to control the initiation
`point of the fractures. . . .
`
`Ex. 2001 at 5, A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and Economics, SPE
`164009 (2013); Paper 51, POR at 22.
`
`67
`
`

`

`1998 Halliburton
`publishes Thomson
`1999 Halliburton
`publishes Ellsworth
`
`Lane-Wells
`(Ex. 1002)
`
`1955
`
`1988
`
`1990
`
`1992
`
`1995
`
`1996
`
`1998
`
`1999
`
`2000
`
`2001
`Packers Plus
`performs first
`StackFRAC job;
`68
`Files patent
`
`

`

`1992
`Baker Hughes publishes
`Ex. 2079 (Damgaard)
`Cementation is “prerequisite”
`
`1990
`DOE publishes Ex. 2077
`Cased and cemented
`
`1988
`Halliburton publishes
`Austin (Ex. 2098)
`Cement necessary for
`effective fracturing
`
`Lane-Wells
`(Ex. 1002)
`
`1992
`Halliburton publishes
`Ex. 2099 (Owens)
`Multiple stages must
`be cemented
`
`1995
`Halliburton publishes
`Ex. 2078 (Abass)
`Perforations “crucial”
`
`1996 Yost (DOE) publishes Ex. 2100
`Focused perforations “field proven”
`1998
`Chevron publishes Ex. 2066
`(Emanuele) Analyzes complex
`initiation problems
`1998 Halliburton
`publishes Thomson
`1999 Halliburton
`publishes Ellsworth
`2000
`Ex. 2063 (Crosby)
`published
`Analyzes complex
`initiation problems
`
`1955
`
`1988
`
`1990
`
`1992
`
`1995
`
`1996
`
`1998
`
`1999
`
`2000
`
`2001
`Packers Plus
`performs first
`StackFRAC job;
`69
`Files patent
`
`

`

`1992
`Baker Hughes publishes
`Ex. 2079 (Damgaard)
`Cementation is “prerequisite”
`
`1990
`DOE publishes Ex. 2077
`Cased and cemented
`
`1988
`Halliburton publishes
`Austin (Ex. 2098)
`Cement necessary for
`effective fracturing
`
`Lane-Wells
`(Ex. 1002)
`
`1992
`Halliburton publishes
`Ex. 2099 (Owens)
`Multiple stages must
`be cemented
`
`1995
`Halliburton publishes
`Ex. 2078 (Abass)
`Perforations “crucial”
`
`1996 Yost (DOE) publishes Ex. 2100
`Focused perforations “field proven”
`1998
`Chevron publishes Ex. 2066
`(Emanuele) Analyzes complex
`initiation problems
`1998 Halliburton
`publishes Thomson
`1999 Halliburton
`publishes Ellsworth
`2000
`Ex. 2063 (Crosby)
`published
`Analyzes complex
`initiation problems
`
`1955
`
`1988
`
`1990
`
`1992
`
`1995
`
`1996
`
`1998
`
`1999
`
`2000
`
`2001
`Packers Plus
`performs first
`StackFRAC job;
`70
`Files patent
`
`

`

`A. Daneshy 2007
`Ex. 2014 published
`Still advocating cement
`
`2006
`Packers Plus
`publishes Ex. 2003
`
`2010
`Packers Plus
`receives SPE Meritorious
`Engineering Award
`
`2012
`Packers Plus
`receives Sproule
`Engineering Award
`
`2005
`Schlumberger acquires
`stake in Packers Plus
`
`2009
`Packers Plus named
`E&Y Entrepreneur
`of the Year
`
`2001
`Packers Plus
`performs first
`StackFRAC job;
`Files patent
`
`2003
`2003
`Baker Hughes
`obtains Packers Plus
`tool drawing
`
`2005
`Baker Hughes
`releases
`FracPoint
`
`2005
`
`2006
`
`2007
`
`2010
`
`2012
`
`2009
`Weatherford
`releases
`Zoneselect
`
`71
`
`

`

`7272
`
`

`

`The POSITA would have been
`aware that there is a
`significant economic risk
`associated with adopting new
`technology and/or methods that
`defy “tried and true”
`technology and/or methods.
`
`Ex. 2050, McGowen Decl. at 24
`Paper 51, POR at 15-17
`
`73
`
`

`

`The P&P approach was the initial lower
`completion methodology that allowed the
`effective deployment of multi-fracture
`treatments in horizontal wells and it is
`difficult to progress from an established,
`standardized and successful technique;
`unless there are significant tangible benefits
`that can be demonstrated via a different
`method.
`
`Ex. 2001 at 5, A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and Economics, SPE
`164009 (2013)
`
`74
`
`

`

`[A]nother, for example, reason you
`would use cemented liner is
`because your neighbors are using
`cemented liner and you're getting
`a better production and you say,
`“I don't know why they’re doing it
`but they're getting better
`production. I’m going to use what
`they are using.”
`
`Ex. 2016, A. Daneshy Depo. at 26:2-10
`
`75
`
`

`

`Risk aversion was concluded as being a
`significant factor in the observed slow uptake
`of technology in the Upstream Sector of the
`Oil and Gas business.
`Ex. 2093 at 1, V. Rao, Accelerating Technology Acceptance: Hypotheses
`and Remedies for Risk-Averse Behavior in Technology Acceptance, SPE
`98511 (2005)
`
`76
`
`

`

` T srr- nuts-Ho's ‘l:
`
`
`ProductionrrrrMCFGE]
`
`SPE 135335
`
`Comparative Study of Cemented lversus Uncemenled ltrlulti-Stage Fractured
`Wells in the Barnett Shale
`Darrell Lohoefer. GPE. Eagle Iillil 8 Gas. and Daniel J Snyder. SPE. Floelrr Beale. $PE. and Dan-el Themig. SPE.
`Packers Flus Energy Services
`
`:r. n,.-I=r~r.u-....F-9.m -.
`|J'_‘11_-
`rm _.
`'_L:‘-_ :q..w_t'lj
`rem-r amflfi'aledljl pm'nlqnlel 5:: inn-hi Til-(Elfifl jsiegwIncErhrtl-f' --,a¢.- =1”qu r,;r_.
`3. who, w.
`1wllllI-cnn .r-r r. .rrm, Inc-.5“: 2».
`...r-r.;¢r;- -. ”use“.
`I.
`| .mvfircnrwm r .r..
`n. 1._ item JPu-o
`,. co 3.
`:ll_l IMllilI '3'
`(" _"\_|_'(V'I. J mll'lll EIpIN'.
`(IL‘lI [If I 0' .1JIIL'3I
`-II|.
`IL'
`.1 m1 ||_'I Ik'llar'
`I" 01(0
`._
`
`
`
`
`mean El-rlsnr 'er-tflu-oo' Part-us? 0
`3d rm W'I'l .;. rm mu. -.1r-.r. me my mum n‘It-e cram—J
`arm-t." erg-en r,
`IMO-“11¢ new-mar New...” .- fi'l
`
`I501
`-.Ir-;rr- Helm-t1
`rmogmu f1]...-
`.I-ullax-HITreJ-uufirrrn(o1unt1sluq..f r.v|r'w'¢d:ml_ur gaze-“qr.
`
`
`
`
`Abstract
`
`The induslly has made a very quick lunt toward both urIcurrventional reservoirs and horizuntal. IIIuIIi—stage heuuring.
`Some IFIEIIJSle' BMDBIIS have DBQLII‘I III} qu'BSIICII'I 1t'IE.L BllIBClIIleI'IIBSS Ill I'IBCDvaIES I” ”“385 I'I‘I355l‘vB “35$va HSSBIS. Pt
`nrrlable lnrmerien in these discussions has been the Barnett Shale, where e verietv of methe—rls and technnlogies have
`been used to fracture stiIrIulele IIurizunlal wells. In last. much of the learning curve fur csinpletiun practices has some
`Iron-r expenmental work in this lll'lOCIn verrtional plav.
`
`From 20M through 21.106. a new. open hole mutti-slage system [OHM S] oormletion technologyI was run In Denion
`Cnu nit.I Tet-res Using rILIt'IlicaIIv availehle- data [mm the past five years. lhis slurlv cnnlresis long-lerrn rIrnrlucAirrn
`results from DHI'Ir'IS completed wells and wells mrnuleted wilh cemented easing.
`
`The dala sel I'orDHME fractured wells ccrmperecl tn the date set for cemented fractured wells indicales that open thIe
`wells. on average. perlurmed Driller. Significantly. I10 failures (Ir shut-in usrieds 'I'I'Em': observed for the DHMS wells.
`This establishes the viability. rel-attiI-Ir.r and effectiveness otthis technologv for the long-term lite oft-tells not onl'r.r in the
`Barnett. but for performance enhancement in other sh ale pie-gs
`
`Substantial amounts at monev are currentlv be-ng seem to raniolv develop resource mars similar to the Barnett
`worldwide. Based on shutt—turm results usntg current complelluri methods. prudidluns for ultimate recoveries may be
`overeat-mated. This peoer evaluates the erred-veness oi currehl complete-t practrces hrr contrastrng [we methods rn
`rem-ts of nmrluctinn economics. operational efficiency. and hesl I'racturing practices to determine whether Ihe
`mmplctiun method can attest overall wull nerlermancu and long-term recovery.
`
`'mmdmifl"
`Fonnalien Description. The Barnett 5h ale Is_a MIss-ssrppran-age shale Ieeateo rII the Forth 'W'OI'tl'I Basin and covers
`approximatelv 5.0043 square miles {12.9% Irrn }of north-central Texas {Figure l] The Barnett represents the
`grandfather at shale reservoirs where "shale as source rust" was tirst eslaulrslrerJ. and where the necessary set or
`technologres. na mely her'raontal er'rII-rrg and mum-stage fracturing. were developed to make hydrocarbon extract-on
`ecunumicallv leesmle in shale.
`
`.
`5
`
`5
`:
`
`:
`
`I
`
`.. a“ .
`....................................................................................................................................miss...” .
`mil???
`
`mu
`«3+:
`
`_
`
`..
`
`_.
`
`Cumulative
`MMCFGE
`
`Cumulative
`MMCFGE
`
`_
`
`:
`'
`
`24 Mflnth
`
`Cumulative
`MMCFGE
`
`'
`-
`
`Cumulative
`MMCFG E
`
`The Bamett is contem'lrrblv nverIe-n by the Pennsylven re n-arIe Marnie Fells ere stene and uncenforrnablv overlies the
`Ordovician—age Viola LimeslarreEllehtrsrger Group. whlcl‘t serves as a tree barrier [Figure 2’} [Buvrrkt-JI. 2W3: Follastro
`et al.. zero]. The core area of the Barnett :5 located In the Benton. Wise and Tenant Counties where rt rs
`
`annrosirnalelv 3-00-10 SUDtI
`
`thick with purnanvnnd permeabrlil'r vallIES inlhe range of‘lr — 5e. and Cr EICIIJEIT— DIODES
`
`
`Figtlré E ISL]mmaw Elf Cumulative firfldutflifli] date fIDI" DHMS a“a CiffSe't 'Ii'u'BliS in UBI’ttOii County;
`
`Ex. 2018;
`
`Ex. 2018;
`Paper 51,
`
`Paper 51,
`77
`POR 22-23
`POR 22-23
`
`
`
`
`

`

` Ex. 2018;
`
`Ex. 2018;
`Paper 51,
`Paper 51,
`POR 22-23
`POR 22-23
`
`78
`78
`
`

`

`“game-changing technology”
`“prize product”
`(Ex. 2033)
`(Ex. 2004)
`
`“revolutionary
`technology”
`(Ex. 2008)
`
`(Ex. 2048)
`
`“Multistage fracking pioneer…”
`(Ex. 2006)
`
`(Ex. 2048)
`
`(Ex. 2048)
`
`“disruptive technology”
`(Ex. 2046)
`
`“legendary”
`(Ex. 2046)
`
`“… revolutionized the
`completions sector…”
`(Ex. 2006)
`
`“the industry standard”
`(Ex. 2009)
`
`(Ex. 2048)
`
`Paper 51,
`POR 26-31
`
`79
`
`

`

`That focus led to the development of
`a number of completion technologies,
`starting with the StackFRAC system,
`which revolutionized the completions
`sector by introducing multistage
`fracturing systems in horizontal wells,
`credited with unlocking the potential of
`tight and shale oil and natural gas.
`
`Ex. 2006, Leading the Way: Multistage fracking pioneer Packers Plus plays
`major role in cracking the tight oil code, Canadian OilPatch Technology
`Guidebook (2012); Paper 51, POR at 26-31.
`
`80
`
`

`

`
`
`81
`
`EN [HEP‘R EN'JTUH OF THE YEAR
`NMIOML WINNER
`
`
`
`
`
`Packers Plus
`_Energy 5th-
` $1" ND. BF EMPLOYEES IN 2000: 3
` FPM: “'Ihy (“ti J‘U
`l-V',” N'L-‘ARYEQUU. Dali-Elwin“. Kun i’almmnd Pficl Kn]:-
`I'm-1:. Tuatarl unr-
`um shanfiuncd flu: net'unlg.
`l'VrfIJEIT pcilk a: IJll-xn-itt'b air" Hal-
`
`
`THEMIG: \l'
`'
`.g
`h'lmmln I-:I .slarr Ih¢ir HUI-.1 firrlt.
`I'lasod in Fall‘ifllry: Fag-kn; Plus
`3* EDGE: ABDUT 35C!
`vanrpgm. My”, |_
`-_
`Energv Send-m 1rIL- aim-d -'.u help dm :‘mium-ry wall: d:c monu-
`
`
`<I1Ialch «acupun-
`H".hal'dust-m-Icaul:d:|~d>edl.s.1p'u'hmn :l‘mltrman 'Ii-mn lwuwnn-rl
`
`
`IJIu .l|l‘u|.illl mrl: me. <I1r|| challu'ngr- in Z‘Jfll. TJu-anlg
`"ml his. 1:'n.1r nn 2 flight tn :1 rnl-l-Linp, 1n slulcll ml; the
`
`Fifi—(IF NFL-DYE '-_‘
`alt: Fm‘ wlm 1mm ibcL‘fllm.
`l‘aL-lccrx'
`.‘s'mzL-I-‘uc spun”.
`
`
`3013‘} ABOUT 3'50
`'I'I'n' LcLiInnlupy ullisrlu pmvirlmlll unl'isillc Jul"
`:35
`
`- In; mun: mm;
`
`
`Illilxill linllg rlmdllrnt‘al in .TllTlll'e‘. nil1|Q|c|§ :Ind LIRIIL nch'
`
`LDC
`
`I?
`Flimi
`Ftlz'msmons. New. With the help 0! : wane:
`"ml-na—
`EIIJi'Eu
`”N: IV FCC-9 ZS
`
`
`
`HW'ISIJ Uiillc‘ld giant .‘iLhEIulllclyc
`:"lmrs w '11:“ny
`
`Iurl'l
`
`Ijjl
`”urn-tn. Hunt. [n.ImJ
`Csjl.
`:I:Ir| pn-u'.
`
`
`Wm Pmmv-Fhs [EI'JI'IL- ..
`(Itnl D n The“. .' «burn the stun:
`
`
`Phi HEM-EH =0"ka 'PA'I
`
`
`FINANCIM. POST ”WEE: “’har draw mu Ln :2” HI-
`III'JILI
`I; JCIJ Inn-
`aml gas mil-Hwy? Yuu'n: :I farm Girl Elam muchum mi.
`
`
`Um.- II' 9505'. :0 G) LXI
`HM — ll-J. muLI}-c-ilmu:1u-y.
`
`
`
`3*“ THEMIEL: Mg.- d'Ml u‘anmE fur L'rmglk Igipulin:
`
`
`davimln.
`II‘JL' rm! Il'l explrlratlnn.
`| éidn‘: hum.- mun-E1
`JEIr-IzL 5-1:.- oiHn-r-g» husuLm mail
`I prafluah-rl with u mul
` wrlnt you to (In a _
`
`
`With Packera Plus techrmlflgy.
`1}dlwiiu‘l‘ill|1llfill‘|
`mgiIIMHI-‘lg ulu'fimr I'mn- I'm 1.'I-.i\.u-rs¢ir-’.- nflliimm and 93.1 a ivE:
`
`FF“: “4-1:“ wrmt
`aL HaJlibufi-mn. T clan-Std up In 'liniux fill: 'FcIuI' ytnl's. Llltn 1 uIEnI
`
`THEMED: 'l'no whr.
`my wag.- :i|'.|1'\ Iming rainfall-:1 l::- {'hlladla. I lm'u Lu MKM'IJIJIITL
`
`na-a mmpemcs '
`:Iri: rl‘imh :"HI nt'l:i'.e-.w:|!eT-i.':1_rrll.'. 5:an rl1ryjusr drum Ian-rt: mun;-
`the Bakken Gilfierd went frc-m
`
`mowmim in 'beas- Aim: flH (J'rnadian $1111:le m. limm'n for
`u‘nl‘l nu) 5311. ulup'i
`
`n12u!t|uur|t.Tnn'rE
`1U>1=Ii1lg mail] Ltunpanitt and: ll'.l2|.
`nlirzm. ficxm'nnrr nntt lul‘i
`urnh Km m i" u
`
`rm: that s: all ”Eran-J15.“ ulrlfierenr: in 1'-
`npv. TJ'.1: find Ihmg
`wu- EU 'IJ-Jik] LIIieH
`pmducing 100 barre-IE. 01‘ DH 3
`
`n rlmrnrerl said was. "ii The tcchnnlogr 3:11 3mm In Lianada u.-
`
`.an‘rc‘iy. i1}. lrrr‘JlJIIblr IILIl “filth liliing about."
`ldmufllu: we bu! : -_|
`
`lxuwmw Mr .Tmmn Fa
`
`day in EDDIE ta 50.000 now.
`
`
`37' NO. OF OPERhTiNG
`
`LDCATJDHS JN EDDIE: 1
`
`T‘ LDCATIDNS IN 2E1 09: 25
`
`'
`
`41""."JIInicmuI r. :Im
`
`Exlfibit 200?
`IPREfl 16-00598
`
`
`
`

`

`StackFRAC, the company’s prize
`product and primary innovation, is
`an open hole ball drop completion
`system that’s widely credited with
`unlocking old resource plays that
`were thought to be too expensive or
`to technically challenging to tap.
`
`Ex. 2005, Exploration and Development, Alberta Oil Magazine;
`Paper 51, POR at 26-31.
`
`82
`
`

`

`With the objectives of making multi stage
`horizontal well fracturing more efficient,
`both in terms of cost and time, the first
`commercial OHMS systems were
`developed and deployed in 2001 (Snyder
`2011).
`
`Ex. 2014 at 5, A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and Economics, SPE 164009
`(2013); Paper 51, POR at 26-31.
`
`83
`
`

`

`Currently, there are a number of commercial
`OHMS systems to choose from, but for the
`most part, these systems utilize similar
`principles.
`
`Ex. 2014 at 4, A. Casero, Open Hole Multi-Stage Completion System in
`Unconventional Plays: Efficiency, Effectiveness and Economics, SPE
`164009 (2013); Paper 51, POR at 26-31.
`
`84
`
`

`

`GeckT-HS Plus ®
`
`DO IT ONCE. DO IT RIGHT.
`
`' _'—
`"3-"? "'
`=IJIL Illuniimlll
`____
`__ ”-9—:
`Exs. 2004; 2018; 2053; 2056; 2057; 2058 (video); 2061 (video)
`
`058 (video); 2061 (video)
`
`Exs. 2019; 2020; 2052; 2059 (video)
`Exs. 2019; 2020; 2052,- 2059 (video)
`
`85
`85
`
`

`

`Q. Are you familiar with Baker
`Hughes’ Fracpoint system?
`A. Ditto what I told you about
`Packers Plus relative to Baker
`Hughes.
`Q. That’s another open-hole ball-
`drop system, right?
`A. Yes. It’s open.
`
`Ex. 2017, A. Daneshy Depo. at 96:1-5
`
`86
`
`

`

`lsqFrac - Generation 1
`
`. Generation 1
`
`Market Drivers & Opportunities
`
`r Cempetitiqn:
`— Packers Plus
`
`- Preven System
`I Opportunities
`Mid Gen
`
`EX. 2052 at 25-26
`
`— System Status {Testing and
`- Packer
`- Design Requirement: ~ H‘
`in. qpen hqie
`i P'
`Testing Results _!
`able in eehreveWfiDUl-‘isl
`- Free Sleeve
`. Design Requirements — Hi
`. Elell Tflfiim 11mg Line an:
`I Equipment DEHVW
`- Stelus of Equipment
`
`I Generatien 1 end Generatien 2
`* E 1J4. OPE” HOLE, EWPSI. 5251:":
`— MALT
`
`.. System Issues
`
`- Genermiqn 3
`
`r 6 W Open Hele. WIIIJPSI, E. INSF
`
`fit: lilies-{Ends
`
`Hi!
`In: MINT-d;
`
`Ex. 2052 at 25-26
`87
`
`

`

`(FE-chars Plus
`
`
`' -
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`Fin ill In 513 IlatiDrl
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