State-of-the-Art Summary

Jaeco Technology, Inc. of Houston was formed in 2002. They develop, license and sell simple and compact process solutions for offshore operations based on their proprietary and patented technologies. The focus for these technologies is currently offshore drilling and production, but the potential for applications onshore and in other industries is substantial.

The primary technology currently being successfully marketed to the offshore operators is the TEKTOTE^TM Solution. It is a premixed and packaged 4-, 6-, or 8-barrel container of concentrated cross-linked polymers used to control fluid loss in the perforated interval of the reservoir. It utilizes compressed air to drive a pipeline pig to extrude the viscous material out of the container. The customer is credited for any unused material. Pre-blending eliminates problems for the operator in pumping viscous gel materials, as well as problems with blending on-site or container disposal. Jaeco has recently ramped their fleet to 20 rental units and intends to grow the business by expanding from the Gulf of Mexico to Brazil, West Africa and Norway. Additional growth opportunity exists in expanding their product line to larger 100- or 150-barrel containers and applying a similar strategy to the delivery of concentrated hydraulic fracturing gels.

The most recent technology developed by Jaeco is in the area of compact processing equipment: reactors, distillation, absorption, stripping and dehydration. The initial focus will be proving up the technology in the application of offshore seawater deoxygenation for reinjection back into the reservoir for pressure maintenance. The RAPTER^TM Solution will be capable of processing 100,000 barrels/day of seawater, with an outlet of 15 parts per billion of oxygen, all at a small fraction of the size of existing modules. The RAPTER^TM is a mass transfer exchanger reactor that contacts gas and liquid together. It generates a huge liquid surface area with micron-sized gas bubbles. It is scalable and motion insensitive. Due to its compact size, it will reduce operators' capital expenses as well as operating expenses. The

initial niche to prove and establish the technology is the offshore water processing market, but ultimately the technology can be adapted to the larger markets of evaporation, stripping,

RAPTER^TM Mass Transfer
Exchanger Reactor

absorption, dehydration, distillation, and chemical reaction in oil and gas, petrochemical, wastewater and other industries. Jaeco has recently received the patents for this technology and is in the process of fabricating a larger prototype process module. They are seeking an industry partner for field trials, funding to accelerate the development and marketing, and distribution channels.

Houston-based Ultima Labs, Inc. was founded in 2002 by the four principals, formerly of Innova Electronics (www.ultimalabs.com). Ultima is an engineering firm with expertise in sonic, electrical and nuclear magnetic resonance (NMR) logging for wireline, logging while drilling (LWD), measurement while drilling (MWD) and industrial applications. Their products and services include MWD sensor products, MWD board products, industrial control products and custom engineering services. Chief among those is the Compact Propagation Resistivity CPR^TM tool. LWD was introduced to the drilling

industry in the 1980s and has been dominated by the large service providers. It has the advantage of "geosteering" in deviated wells, but has traditionally been expensive and produced poorer quality data than a wireline. The Ultima tool is designed to overcome these drawbacks. It will be considerably more affordable to the drillers and produce data with quality equal to the wireline data. It was launched in the 3rd quarter of 2002 and the first 6.75-in. low resistivity field test was in the 3rd quarter of 2004. An order for the development of a 4.75-in. tool was received in the 3rd quarter of 2003 and delivered a year later. And as an illustration of the common mission of Rice Alliance and PTTC, Ultima was awarded a DOE Microhole project (DE-FC26-05NT15487 "Microhole Coiled Tubing Bottomhole Assemblies") for the development of a 3 1/8-in. MWD/LWD collar and is featured on the PTTC website www.micro
tech.thepttc.org/ultima_labs/
ultima_labs.htm#top. This product should be commercial in early 2007. Ultima asserts that the large service companies have done a good job of growing the LWD market, 500 to 1,000 sets globally. They view their market as the smaller service companies and project a market potential of 100 to 200 resistivity collars with annual rental revenues in the $14 to $28 million range.

WOW Energies, based in Houston and established in 2004, offers energy efficiency and pollution reduction technologies. The company owns the patented technology called the Cascading Closed Loop Cycle (CCLC), a breakthrough in energy efficiency that generates electricity from nearly any heat source (www.wow
technologies.com). It is an advanced technology that converts heat at low and high

Ultima Labs Integrated MWD/LWD Measurement System