"We are happy to have signed the new contracts in our lateral drilling and satellite business lines," said David Adams, President and Co-CEO of Verdisys, Inc. "We are also very pleased to report that a new deflection shoe design has been tested for field deployment. Our goal is to provide 100 percent reliability in our drilling process."
Recent drilling results have been mixed with some promising initial results for the Department of Energy (DOE) in Wyoming and some mechanical problems, apparently due to equipment design issues, in Oklahoma. Verdisys engineers have designed a new deflection shoe and flex-shaft, which they believe will greatly improve the reliability and efficiency of the lateral drilling process. Work continues on a three well project on the Teapot Dome field for the DOE in Wyoming. Two wells have been drilled to date. Live oil was reported on the first well and it is currently producing frac sand. Field work on the third well is scheduled in the near term.
In Oklahoma, equipment problems caused a short break in Maxim operations but they are expected to resume later this month. Work has been completed on the first well, where hydrocarbon shows were reported during field operations and after conventional completion methods, Maxim expects this well to be a commercial producer. Maxim plans to continue using the Verdisys radial drilling service in Oklahoma, Kansas and other states.
Operations on the second Maxim well in Oklahoma were suspended to test the results of initial activities. Preliminary analysis indicates that abnormal wear in the deflection shoe impeded the milling process. A new shoe design, which was recently tested for deployment into the field, has several design enhancements to overcome casing penetration issues.
The satellite commitments received in the second quarter included orders from Exxon Mobil, General Electric, and Dynegy corporations as well as Texas A&M University. These orders for hardware and bandwidth services are expected to generate revenues in excess of $500,000 over the three year life of the contracts.
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