`
`1.
`
`I graduated from the Missouri School of Mines and Metallurgy (now Missouri University of
`
`Science and Technology) in 1962 with a degree in petroleum engineering and have worked in
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`the oil and gas industry since. After holding positions with Shell Oil, Juniper Petroleum,
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`Prospect Petroleum (which I founded in 1982) and working as a consultant,
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`I opened the
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`Headington Oil Company’s Denver office in 1991.
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`In the fall of 2001, I was the Manager of Headington Oil’s Rocky Mountain Division. At
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`that time, I was responsible for an oil well in the Bakken formation in Richland County,
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`Montana, identified as Dynnson 11X-5, among others. The well was drilled as a dual-lateral,
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`horizontal well, but was not producing enough oil to be economically viable.
`
`.
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`I decided that I wanted to fracture the sidetrack lateral to improve production.
`
`I first
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`approached Halliburton and Schlumberger, which were two of the leading oil field service
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`companies at that time. Both companies told me that it would not be possible.
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`I was aware
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`that both companies had unsuccessfiilly tried to fracture long horizontal wells in the North
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`Sea.
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`I had heard of Packers Plus from a Calgary company that drilled the Dynnson llX-S well,
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`Ensign Well Services. I contacted Packers Plus in August or September 2001 and spoke with
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`Dan Themig about fracturing the well. In early September, Packers Plus provided me with a
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`completion proposal for the work.
`
`.
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`I reviewed the September proposal and decided to pursue the project.
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`It provided for
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`mechanical diversion and fracturing far down the horizontal section of the well.
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`I had not
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`previously seen a fracturing system having multiple sliding sleeves moved open with drop
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`balls, nor had I seen packers being used for fracturing in the open hole.
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`1 of 3
`1 of 3
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`Ex. 2103
`Ex. 2103
`IPR2017-01236
`IPR2017-O1236
`
`
`
`6.
`
`The September proposal was stamped “Confidential — Not
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`to be disclosed outside
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`Headington” when I received it. There was a mutual agreement and understanding between
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`Headington Oil and Packers Plus that the proposal and all information concerning the project
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`were to be kept confidential.
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`I viewed the work as experimental and saw that Packers Plus
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`was trying something new.
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`Under these circumstances, it was customary in the industry that the work would be kept
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`confidential. As a new technology that could result
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`in increased production,
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`it was
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`understood in the industry as a secret and not
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`to be shared.
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`I have worked on new
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`technologies with other companies with the same expectation and practice of maintaining
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`confidentiality.
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`It was very important to Headington Oil that our competitors not learn of any technological
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`advantages that we had to improve production. This was especially so in Richland County in
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`the fall of 2001. At that time, most of the wells that had been drilled in the area were not
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`good producers and much of the land in the area had not been leased for oil production.
`
`I
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`saw that Packers Plus technology may offer a competitive advantage and as an opportunity to
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`exploit a largely untapped resource.
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`In early October 2001, Packers Plus attempted to install
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`the equipment shown in the
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`September proposal in the Dynnson llX-S sidetrack. The assembly, however, got stuck in
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`the well and had to be removed. Packers Plus then provided a revised proposal later in
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`October also labelled “Confidential — Not to be disclosed outside Headington”.
`
`10.
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`In late October, the equipment in the October proposal was successfully installed and the
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`lower two stages of the well were fractured.
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`I considered the job to be successful.
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`Production increased from about 40 to 370 barrels per day.
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`2 of 3
`2 of 3
`
`Ex. 2103
`Ex. 2103
`IPR2017-01236
`IPR2017-01236
`
`
`
`11. I was responsible for the overall operation on behalf of Headington Oil. Packers Plus had a
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`representative on site, Ray Hoffman, who directed the fracturing operation using Packers
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`Plus’ equipment. There was also a rig crew who ran the tools into the well on Mr. Hoffman’s
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`instructions, and a “frac” company that pumped the fluid down the well used to fracture the
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`formation. The members of the rig crew were not given details of the operation.
`
`I
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`specifically told the persons on site from the frac company that the work was to be kept
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`confidential.
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`12. Following the operation I continued to consider and maintain the proposals, information and
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`details of the job as confidential.
`
`I am not aware of anyone disclosing such information after
`
`a
`
`75,
`I
`.
`,-
`. ’ / .
`
`/"“’7
`__,
`
`A
`
`the work was completed or at any time.
`
`Signed at Denver, Colorado, this
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`'7
`if
`
`
`/6 day of April, 2015
`
`Alfred R. Powell
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`3 of 3
`3 of 3
`
`Ex. 2103
`Ex. 2103
`IPR2017-01236
`IPR2017-O1236
`
`
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