June 2009

Applied Physics Systems, Inc. and its marketing partner for the Russian/CIS countries, GeoTrend, have completed successful deployment of a custom-designed Wireline Dipole EM System in Western Siberia, drilling several underbalanced wells in difficult geographical areas of Russia. The system utilizes a wireline system, integrated with an EM telemetry system, to recomplete wells with underbalanced technology, greatly reducing damage to the formation, which is common when using conventional techniques. The resulting oil flow was over 100 barrels per hour while not on the pump. The entire underbalanced drilling system, which includes the Applied Physics EM MWD system, is available from GeoTrend. In this application, the system is being used to drill one or two sidetracks in existing vertical wells. The resulting oil flow from these recompletions is typically several hundred barrels per hour.