NOV IntelliServ August 28, 2009 Houston, Texas

1. IntelliServ Broadband Network™ and Along-String Evaluation™ services for high-definition downhole and sub-surface operations NOV IntelliServ August 28, 2009 Houston, Texas

2. What is the Value? More Wells Better Wells 1MM bbls additional reserves 10% reduction in drilling time with increased downlinking efficiency. 0.36Deg/100ft vs 1.32 cumulative dogleg severity in 8 ½” section • 1+ trips saved per Well • Memory fill-up • Neutron sensor failure • Rotary Steerable System, diagnostics and resets • Reamer activation 6 days saved by wellbore quality, back-reaming practice 1 casing string saved by time lapse wellbore image logs Courtesy of Halliburton 1,300 ft deeper shoe with Formation Pressure Test with QC in real time Courtesy of Halliburton 20-68% increased circulating hours by managing downhole vibrations, MSE based on downhole measurements Courtesy of Schlumberger Courtesy of Schlumberger 57,600 bps vs 2bps Courtesy of Baker Hughes Courtesy of Schlumberger

3. Talking Points • What is the value today and paradigms tomorrow? • What is our service performance? • Which factors impact quality of service? • Ask the R&D Managers…

4. Today’s Challenge for Telemetry Systems Mud Pulse 10 bits/sec Sequential data Data transferred in 2-5 sec pulses gammaresistivitypressurevibration Source: Bateman 2009

5. Wiring is the Only Option IntelliServ Broadband Network Mud Pulse 57,000 bits/sec Simultaneous data High bandwidth High definition High Volume Real time 10 bits/sec Sequential data Continuous bi-directionaldata transfer Data transferred in 2-5 sec pulses Tool actuation vibration Sonic Image Logs Etc, Etc gammaresistivitypressurevibration Source: Bateman 2009

6. Networked Components

7. Next

8. Operational EfficiencyValue Seen for the IntelliServ Broadband Network Welling & Company AVERAGE RATING, SCALE 1-10 (10= EXTREMELY HIGH VALUE)

9. Paradigm Shifts by the IntelliServ Network • Speed does matter: • 57,600 bits per second Courtesy: NOV Downhole

10. Paradigm Shifts by the IntelliServ Network • Speed does matter: • 57,600 bits per min 2. Along String Measurement Service

11. Paradigm Shifts by the IntelliServ Network • 1. Speed does matter: • 57,600 bits per min 2. Along String Measurement Service

12. Paradigm Shifts by the IntelliServ Network • Speed does matter: • 57,600 bits per min Along String Formation Evaluation 2. Along String Measurement Service Along String Dynamics Near-bit Measurements 3. Access High Temperature Reservoirs Rotary Steerable Source: Derek Mathieson Vice President, Chief Technology and Marketing Officer Baker Hughes Incorporated April 2009

13. Paradigm Shifts by the IntelliServ Network • Speed does matter: • 57,600 bits per min 2. Along String Measurement Service 3. Access High Temperature Reservoir Courtesy: BakerHughes, At Balance 4. Transform Operations

14. Paradigms Uncovering A New Class of Facts • Network Always On. Trapped Pressure. • Vibration All Along the Drill String • ROP Improvement with Mechanical Specific Energy All Along the Drill String. • More Data, Less Time Required for Interpretation. • Impact on Formation Evaluation with Full Sonic Wave Forms. • Minimizing and Managing Downhole Vibration • Drilling Ahead when Memory Filled • Drilling Ahead with diagnostics of Sensor Failure • Confirmation of Reamer Functioning • Wellbore Placement Increases Productivity Unexpected • Pack Off Determination and it’s Location with Along String Evaluation • Measurements while Tripping • Multi-Pass Measurements • Fast Downlinking, Re-Programming/Configuring Tools • Alter Formation Evaluation Program with High Resolution Information while Drilling • High Resolution Wellbore Images • Quality Assurance and Efficiency of Formation Pressure Testing • Dip Picking and Fault Identification in Real Time • Stabilization of Wellbore Stability • Early Diagnostics of Tool Failure Expected Existing New

15. IntelliServ Network-Ready Components

16. Current Commercial Network • Customer Bandwidth: 57,600 bps • Functional Temperature: 302°F = 150°C • Functional Pressure: 25,000 psi

17. Provo, Utah United Kingdom Trinidad Brunei Mexico Malaysia Colombia Australia

18. Network Configured Components

19. Configured Drive Systems

20. Interface Subs to Connect to Service Companies

21. Extensible Tools - Jars

22. Valves, Etc – Configured PBL Tool

23. Others - Adapter Crossovers

24. Product Service Experience

25. Drilling Experience - Summary • Total Wells Drilled: 64 • Total Footage Drilled: 640,422 ft • Deepest Well Depth: 20,833 ft • Highest Temperature: 298°F • Highest Inclination: 98° • Fluid Environments: OBM, WBM, Foam, Air • Wireline Through String: 15,814ft • Data accurate as of 20 August 2009

26. Commercial Rollout

27. Footage Drilled with IntelliServ Broadband Network

28. Service Conditions Tested/Experienced

29. Wired Tubulars and Thru-string Operations (Exaggerated Proportions)

30. Wiper Ball Compatibility - CatoosaTest Minor scoring of hard rubber ball apparently from armored coax/coax exit into bore No adverse impact to foam wiper ball Leading and trailing ends of rubber wiper ball (large and small circles)

31. Wireline Tool Compatibility – Catoosa Test

32. Thru-string Operations – Field Experience • Cementing • Number of Recorded Cementing Operations = 84 • No incidents related to IntelliServ system • Wireline Operations • Number of Recorded Wireline Operations = 15 • Greatest Recorded Wireline Depth = 15,814 ft • No incidents related to IntelliServ system; line drag reported normal/below model on the deepest wireline operation

33. Shear Ram Compatibility – Cooper Cameron Test • 5-7/8” S135 drill pipe (XT57 TJ) • No Impact of wiring components on shearing or ability to hold pressure after shearing Unwired Wired

34. Jar Compatibility – Lab Test • 100 successive jar impacts in test facility (with collar and slinger) • Network components still passed data flawlessly during and after test • Field experience corroborates test results

35. Jar Compatibility – Field Experience • Multiple stuck string events encountered: • Multiple jar cycles employed without damage to network • Jar detected by Network

36. GPDS50 Recommended Make-Up Torque Torsional Capacity – GRP Lab Testing

37. XT57 Recommended Make-Up Torque Grant Prideco Lab Testing (cont’d)

38. XT57 Recommended Make-Up Torque Grant Prideco Lab Testing (cont’d)

39. Torsional Capacity – Field Experience • Some damage to drill pipe incurred • Box end surface damage • Excessive pin nose yielding • Damage indicative of overtorque condition • Effect on telemetry: coil breakage/loosening

40. Other Environmental Conditions – Lab Testing of SCC Resistant Mat’ls IntelliServ Standard Armor Test Mat’l A Test Mat’l B Test Mat’l C No signs of SCC or pitting prior to 300 hours (21x mag) 21x magnification after 14 hours 21x magnification after 414 hours 21x magnification after 382 hours No signs of SCC (die penetrant test) observed after 382 hours One site with significant pitting corrosion observed after 480 hours No signs of SCC (die penetrant test) observed after 414 hours Significant SCC after 14 hours

41. 250000 200000 mg/L Chloride 150000 SCC No SCC No SCC SCC (after storage) 100000 50000 0 0 20 40 60 80 100 120 140 160 Daysinto Drill Operations Water-based mud Other Environmental Conditions -Field Experience

42. Service Performance of Broadband Network

43. Academy In Summary • Value Today with IntelliServ Broadband Network, Paradigms Shifts for Tomorrow • Converted Components are Available Today • The Network has seen Activity in a Variety of Environments • Reliability Matters and is a Central Focus of Ongoing Engineering Efforts

44. Q&A with R&D?

45. Thank You! Thank You for Your Interest in the Academy: Topics for next Academy: [ ] Along String Evaluation Service Roadmap [ ] [ ]