SERVICE SECTOR / Master Downhole Corporate Update
ASE SYMBOL: MDH.A
FEBRUARY 26, 1998
CALGARY, ALBERTA--The Company is pleased to announce that it has
completed the purchase of the technology and name of Wenzel
Downhole Tools Inc.. The Company has filed the Articles of
Amendment to change its name to "WENZEL DOWNHOLE TOOLS LTD." The
new ticker symbol is WZL. The technology included:
(i) all of the patents, proprietary rights and business in
connection with the downhole motors and other tools held by Wenzel
Downhole,
(ii) the business presently conducted throughout the world by
Wenzel Downhole, or its subsidiaries, and including all purchase
orders and work quoted or bid on, but excluding Wenzel Downhole's
United States tool rental business as presently carried on by Zeal
Incorporated, and
(iii) the right to use the name "Wenzel Downhole Tools Inc." or
any variation thereof.
The purchase price is $1,000,000.00 lower than set out in the
Company's information circular dated October 10, 1997 and approved
by the shareholders at the annual general meeting on November 14,
1997. The purchase price consists of:
(i) 2,900,000 Class A Shares, each such share to be issued at a
price of $0.40, and
(ii) 6,100,000 Preferred shares, Series 1, of the Corporation,
each such share to be issued at a price of $0.40, and
(iii) a purchase price installment equal to 4 percent of all gross
sales or rentals of products using the technology covered by the
Patents.
The businesses of the Corporation and Wenzel are complimentary.
Management of the Corporation believes that this acquisition will
enhance the Company's presence in foreign markets. Wenzel's
product list includes but is not limited to:
1. WENZEL DOWNHOLE DRILLING MOTOR - Drilling motors are used to
increase the penetration rate of drilling for hydrocarbons and to
improve the directional control and quality of hole. The two main
types of drilling for which motors are suited are "directional
drilling" and "straight hole performance drilling".
2. WENZEL SHORT RADIUS MOTOR - This motor is very useful for
drilling "re-entry" wells. A re-entry well requires a motor with
the ability to drill an extremely short curve. The need for a
short curve is due to the fact that the oil company will want to
get to the horizontal position as quickly as possible. The
horizontal position is where the oil company can begin to produce
from the well. The more of the production zone hit by the
horizontal section, the higher the cash flow to the oil company.
The Wenzel Short Radius Motor can drill a 40 foot curve. The
patented design enables the motor to drill an efficient, well
controlled re-entry well.
3. WENZEL SHOCK ABSORBED MOTOR - This tool uses Wenzel Downhole's
patented sealed bearing system and has a shock took positioned
directly above the drilling bit. It is a short tool and is
therefore usable for either performance drilling or directional
drilling applications. The drilling advantages of the motor are:
a longer motor life which saves trips and reduces costs, increased
bit life which reduces costs and trip time, eliminates the need
for a string shock sub, a smoother running drill string decreases
the changes of equipment failure, and an increased penetration
rate that will save rig time and hence reduce drilling costs.
4. WENZEL SHOCK TOOL - This type of tool is to the drill string
what a shock absorber is to a car. It is intended to reduce the
bit bounce, extend bit life by reducing impact loads and to reduce
shock loads on surface equipment.
5. WENZEL MECHANICAL/HYDRAULIC DRILLING JAR - The purpose of the
drilling jar is to aid in freeing a drill string that has become
stuck down hole. Mason tools has lost work because they have been
unable to supply this type of combined drilling tool. This
addition to the product line will enhance the rental division's
ability to meet customer needs.
Some design features of the tool are:
(i) The spline drive and all working parts are housed in one
sealed oil chamber. This eliminates ports which can fill with
cuttings that restrict the downstroke on some tools. This makes
the tool usable in air drilling applications.
(ii) The design of the tripping mechanism eliminates seal wear
during normal drilling. This allows for longer runs.
(iii) The possibility of the jar tripping in the hole (this can
damage the drill string) due to drill collar weight below the jar
and tool extension due to pressure drop across the bit, is
virtually eliminated.
(iv) The tool joints, which are stress relieved, can be torqued
to the same torques as drill collars.
(v) Standard seals in the tool are effective to 350 degrees
Fahrenheit, and the tool can be dressed with seals effective to
450 degrees Fahrenheit.
(vi) The jar, when run as a hydraulic/mechanical is adjustable in
the up direction.
6. WENZEL TWO-WAY MECHANICAL/HYDRAULIC DRILLING JAR - This tool
has all of the features of the Wenzel Mechanical/Hydraulic
Drilling Jar and the added advantage of being adjustable downhole
in both the up and down directions.
Presently, all of Wenzel's products listed above are manufactured
by Master Downhole. The LPM Machines and Canada Coating divisions
enable the Company to manufacture (with the exception of power
sections) everything the combined companies sell. The Company's
rental division - Mason Tools - provides the following products:
/T/
Mason Combination Bumper Sub & Hydraulic Jar
Mason Shock-Eze
Mason Surface Jar
Mason Hydraulic Fishing Bumper Sub
Mason Hydraulic Fishing Jar
/T/
The Patents and Patents Pending acquired from Wenzel include:
(a) Bearing Assembly for a downhole motor - US Patent # 5350242
and Canadian Patent # 2071611. This device enables full rotary
torque from the surface to the bit. The device allows for
overriding a motor when the drill string is rotated to the right.
This locking action helps in breaking out of situations where the
bit is stuck downhole. This device also reduces the chance of
tearing rubber out of the stator when rotating or steering the
motor downhole.
(b) Method of increasing the off bottom load capacity of a
bearing assembly - US Patent #5150972 and Canadian Patent #
2026630. This sealed bearing assembly improves motor operation by
preventing drilling mud from damaging the bearings. It also
assures that 100 percent of the drilling fluid is circulated to
the bit. This device also allows for shorter assemblies which
lead to increased build rates.
(c) Apparatus for drilling curved sections of wells (Short Radius
Motor) - US Patent # 5547032 and the Canadian Patent pending was
applied for January 9, 1995. This patent is on the short radius
tool.
(d) Orientable adjustable bent housing - US Patent # 5101914.
When a drill string has two bends, this invention allows those
bends to be aligned so that they are working together rather than
against one another.
(e) Shock tool for uses in directional drilling - US and Canadian
patents pending. Canadian Patent applied for on September 3, 1996
and US Patent applied for June 3, 1997. This invention
incorporates a drilling motor and an integrated shock tool. This
provides a shorter overall tool for directional drilling
applications. It also provides for less impact and vibration on
the drill string, increased bit life, increased penetration rate
and a reduction in "measurement while drilling tool" problems that
might be caused by drill string vibrations. This tool also works
well in performance drilling applications. |
