Particle Drilling Technologies, Inc. has announced results from its most recent commercial field trial. The Company's Board of Directors also formed a special committee to evaluate and pursue strategic alternatives, including a strategic industry joint venture, technology licensing arrangement, sale of the company and other available alternatives.
Results of Commercial Field Trial
The Company recently deployed its Particle Impact Drilling ("PID") System to drill the Travis Peak formation in the Deep Bossier play in East Texas. The PID System was utilized for two separate PID bit runs with one conventional bit run in between. The trial did not result in an improvement over the previous trial, which was the Company's objective; however, the trial provided additional learning and progress. During the trial, PID penetration rates were from two to three times faster than conventional bits ran in the same comparable rock formation when drilled with conventional mud, as most are today.
The new PID Injector system was shown to be fundamentally sound in delivering particle volumes regardless of the variable pressures encountered on the well. However, smooth operation and the durability of some components of the surface system fell short of expectations on this first-ever field use of the new injection system. Also, as a result of using gelled water as the drilling fluid rather than conventional drilling mud, there were times when particles accumulated in the wellbore annulus resulting in the inconsistent return of particles to the surface. These events were dealt with, but resulted in a significant percentage of non-productive drilling time.
Jim Terry, Company's President and CEO, stated, "We are disappointed the newly designed PID equipment did not result in well on well progress as was the case with all the previous trials. This was the first deployment of the new injection system and we proved that the ability to inject particles regardless of changing well pressures was successful. The trial also further validated the merit of PID technology and resulted technical and operational progress."
In order to gain access to additional technical and financial resources to accelerate the development and commercialization of the PID technology, the Company's Board of Directors have determined it will be in the best interest of the Company and its shareholders to evaluate all available strategic alternatives. Accordingly, the Board of Directors has authorized management to pursue such alternatives, and have established a Special Committee of the Board to assist the management team with this process.
Ken LeSuer, the Company's Chairman, commented, "The history of technology development in the oilfield tells us that many of the breakthroughs have come from many years of hard work and continuous effort towards improving the tools to the point where they are commercial and become adopted.
"As an example, the polycrystalline diamond compact ("PDC") drill bit which now represents a substantial portion of the drill bit market was introduced in the 1970's and was considered an unlikely success in the early days due to continuous setbacks. There are many other examples, including directional drilling and rotary steerable systems widely used today, which were only a small portion of the drilling market just ten years ago. As a small company with limited resources, I believe our team has done an excellent job of proving the merits of particle impact drilling and have reduced the remaining challenges to a manageable level. At this time however, we think it is in the best interest of all shareholders to consider all available alternatives to expedite the commercialization of this technology."
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