Fall 2005 Beam Pumping Workshop

Artificial Lift R&D Council Meetings of the Board of Directors

Meeting No. Date & Time Contact Information Agenda Minutes

1 April 22, 2005 Call 512/463-1928 See Below See Below Code 1733013# 2 October 3, 2005 Call 512/463-1928 See Below See Below 4:00 pm CDT Code 1733013#

Text in black on white is the original agenda. Blue shaded boxes contain agenda/minutes from previous meetings. Yellow shaded boxes contain agenda/minutes for the upcoming meeting. Action item parties are shown in bold red.

1. Attendees

 The people listed below attended this meeting. Minutes: April 22, 2005 Meeting  The following people attended the meeting in person. – Cleon Dunham, Oilfield Automation – Bill Howard, Weatherford – Lynn Rowlan, Echometer – Benny Williams, Harbison-Fischer – Jim Lea, Texas Tech University – Norm Hein, Oil and Gas Optimization Specialists, Ltd.  The following person attended the meeting by teleconference. – Hal Rabbino, Strategic Clarity  The following people attended the meeting by proxy. – Claudia Molina, Chesapeake Energy – Ronda Brewer, Texas Tech University – Tony Podio, University of Texas Minutes: October 3, 2005  The following people attended the meeting in person.  Cleon Dunham, Oilfield Automation Consulting  Lynn Rowlan, Echometer  Ronda Brewer, Texas Tech University  Norm Hein, Oil and Gas Optimization Specialists, Ltd.  Bill Howard, Weatherford  Benny Williams, Harbison-Fischer  The following people attended the meeting by teleconference.  Hal Rabbino, Strategic Clarity  Guest  Jeff Everson, Foster-Miller

2. ALRDC Organizational Meeting

 The purpose of this meeting is to hold the (official) initial organizational meeting of Artificial Lift Research and Development Council. ALRDC Board Meeting October 3, 2005 Page 2

 The lawyer who prepared the Articles of Incorporation of the Artificial Lift R&D Council has defined the format of this meeting.  We will follow the format defined by the draft “Organizational Meeting Minutes.”  A copy of this document has been provided to the attendees in advance of this meeting.  A copy of the proposed bylaws of ALRDC has also been provided. There are a few questions in this document to be discussed.  In following the required meeting format, we will: 1. Acknowledge the initial number of three directors. These were required as part of the incorporation process. 2. Elect a chairperson and a secretary for this meeting. 3. Announce the incorporation of ALRDC. 4. Expand the size of the board of directors. 5. Elect new board members. 6. Set the terms of office for the directors. 7. Approve bylaws for the corporation. (This will be done after review of the bylaws and after making any necessary changes.) 8. Elect officers for the corporation. 9. Approve the formation of committees, if such are required in the future. 10. Approve the process of seeking tax-exempt status (IRS 501(c)6) for ALRDC. 11. Ratify any pre-existing contracts (of which there are none). 12. Approve consideration of obtaining “director” insurance. 13. Approve formation of an ALRDC bank account. 14. Set the date of the next Board meeting. 15. Adjourn the official organizational meeting. Minutes: April 22, 2005 Meeting – These are “informal” minutes of the official “Organizational Meeting” of ALRDC. The “official” minutes are in a document entitled, “Organizational Meeting Minutes.” – All of the initial directors were present, either in person or by proxy, so a quorum was present. – The names of the initial three directors were announced. They were: Jim Lea, Tony Podio, and Cleon Dunham. – Jim Lea was elected as chairperson of the meeting and Cleon Dunham was elected secretary. – The incorporation of ALRDC was announced to the attendees. – The initial directors voted to increase the size of the board to a maximum of 15 members. – The following additional directors were elected:  Jim Hall, Shell International Exploration Production  Claudia Molina, Chesapeake Energy  Henry Nickens, BP  Bill Howard, Weatherford  Lynn Rowlan, Echometer  Benny Williams, Harbison-Fischer  Ronda Brewer, Texas Tech University  Hal Rabbino, Strategic Clarity  Norm Hein, Oil and Gas Optimization Specialists, Ltd. – The terms of office of the board members were set at three years, with rotating terms. Board members may be elected to succeed themselves. The initial terms of office are:  One year:  Jim Hall  Bill Howard  Ronda Brewer  Cleon Dunham  Two years: – Claudia Molina – Lynn Rowlan – Jim Lea – Hal Rabbino  Three years: – Henry Nickens ALRDC Board Meeting October 3, 2005 Page 3

– Benny Williams – Tony Podio – Norm Hein – After discussion, the bylaws were approved. As part of the discussion, it was agreed that Bill Howard will draft an amendment to require the Board to consider the direction of ALRDC at each annual meeting. This will be considered at the next board meeting. The currently approved bylaws are on file with the Secretary of ALRDC. Anyone who wishes may see a copy. – The following officers of the corporation were elected:  Jim Lea, President  Cleon Dunham, Secretary  Ronda Brewer, Treasurer – It was approved to allow the Board of Directors to establish committees if it sees the need to do so. – It was approved to seek tax-exempt status for ALRDC. – It was agreed to ratify any pre-existing contracts made by the initial Board of Directors (of which there were none). – It was agreed to consider obtaining “Directors” insurance. The issue of liability will be evaluat- ed. – It was agreed to form an ALRDC bank account. – The date of the next meeting of the ALRDC Board of Directors was set for Monday, October 3, 2005 at 6:00 pm, at the Omni Hotel in Houston, Texas. – There being no other “official” business, the “Organizational Meeting” was adjourned. Agenda and Minutes: October 3, 2005  Bill Howard. What is the status of the draft amendment to ALRDC Bylaws to require the Board to consider the direction of ALRDC at each annual meeting?  Tax exempt status for ALRDC has been granted. ALRDC is now a 501(c)6, tax exempt organization.  Cleon Dunham. What is the status of “Director’s” insurance?  Ronda Brewer. What is the status of the ALRDC bank account?  ====== Bill Howard. The action item to draft an amendment to the Bylaws is carried forward to the next meeting.  Cleon Dunham. The action item to check on Director’s insurance is carried forward to the next meeting.  Ronda Brewer. The ALRDC bank checking account has been set up and is operational. Cre- ation of a savings account was discussed. This will be deferred. For now, a checking account is sufficient.

3. Other Business

 Review the current financial position of ALRDC. Minutes: April 22, 2005 Meeting – The current financial position of ALRDC was reviewed and approved. Agenda and Minutes: October 3, 2005  Ronda Brewer. The current balance in the ALRDC account is $26,446.22.  ====== Cleon Dunham updated this information. The current balance is $27,146.22.

 Act upon a request by Cleon Dunham to attend the SPE Forum Series event on,”Reservoir to Sales Meter—The Future of Measurement, Automation, and Remote Control.” The cost is $1950 plus expenses. Information on the forum series can be viewed at http://www.spe.org/spe/jsp/meeting/0,2460,1104_1535_2630119,00.html Minutes: April 22, 2005 Meeting – It was approved for Cleon Dunham to attend this event. Agenda and Minutes: October 3, 2005  Cleon Dunham attended the forum.  Discussion is needed of how best to report on the results of the meeting. ALRDC Board Meeting October 3, 2005 Page 4

 Some of the ideas are already being used to set up the ALRDC seminar on Sept. 19, 2005 (see below) and the Beam Pump 203 Course on Oct. 7, 2005 (see below).  ====== Cleon Dunham will send the summary of the SPE meeting to the ALRDC Board. Done.  The ALRDC Board will provide feedback on whether they feel it should be placed on the AL- RDC web site.

 Discuss possible expansion of the services provided by ALRDC to include listing of CV’s of people who are interested in seeking employment in the area of artificial lift. Minutes: April 22, 2005 Meeting – It was agreed to provide this service. It is to be made clear that ALRDC is not responsible for the content of any CV’s or resumes posted on ALRDC. The duration of each posting is to be limited. The size of each posting is to be limited to one page. Agenda and Minutes: October 3, 2005  Cleon Dunham is still trying to have the ALRDC web site enhanced to support this service.  Discussion is needed of how best to enhance the web site capabilities.  A message has been sent to the web master.  A suggestion has been received to add a section to ALRDC to list “free” artificial lift software, and perhaps to provide direct links to this software.  ====== The ALRDC web site is now being updated. Cleon Dunham demonstrated the current version of the web site to the Board of Directors.  Lynn Rowlan commented that access to the web site is slow.  Cleon Dunham will check with Dan Dees, the person who hosts the data on the web site, to determine the cost to enhance its speed. Done. This discussion is underway.

 Discuss expansion of the role(s) of the ALRDC Board of Directors to help solicit more: 1. Members. 2. Users of ALRDC yellow pages. 3. ALRDC-coordinated events. 4. ALRDC-coordinated R&D projects. 5. Best practices. 6. Case histories. 7. Discussion forums. Minutes: April 22, 2005 Meeting – These additional duties for Board Members were discussed. Agenda and Minutes: October 3, 2005  How can we place people on the Board of Directors, or on a committee of the board, that can help with these matters?  Several people are routinely providing answers to questions that come in to ALRDC Questions and Answers. Thanks very much.  Cleon Dunham. I nominate Dan Dees to be a member of the Board of Directors.  ====== Addition of Robert Lestz to the Board of Directors was unanimously approved.  Cleon Dunham will invite Dan Dees to a future meeting so the Board can meet him before de- ciding to invite him to be on the Board. Done. He’s happy to come.  Cleon Dunham will visit with Henry Nickens and Jim Hall to see if they are interested to stay on the Board. Done.  Or if they would like to suggest someone else from BP and Shell, respectively. Noel Putscher of Shell might be a good candidate.

 Discuss re-creation of the ALRDC brochure. Will some company fund its reprinting? Minutes: April 22, 2005 Meeting – Recreation of the ALRDC brochure was approved. – Cleon Dunham will redraft the brochure. – Ronda Brewer will have it printed ALRDC Board Meeting October 3, 2005 Page 5

– ALRDC will cover the cost. – The brochure will be used for handout at various events, workshops, etc. Agenda and Minutes: October 3, 2005  Cleon Dunham. What is the status of the brochure?  See a draft version of an updated flier at the end of these minutes.  The original brochure is in PDF format and can’t be modified.  ====== Cleon Dunham will draft a second (back) page for the brochure.  Information on the web site will be included.  It will be designed to be folded in thirds, so it can be mailed.

 Discuss possible engagement of ALRDC in an effort to expand the reach of production automation to better serve all forms of artificial lift. A detailed presentation will be made. Minutes: April 22, 2005 Meeting – This was discussed as part of the discussion about attendance at the SPE Fo- rum Series. – Any recommendations growing out of attendance at that meeting will be discussed at a future meeting. Agenda and Minutes: October 3, 2005  Status update:  There is some significant progress on this item.  ALRDC Seminar:  An ALRDC seminar on beam pumping is scheduled for Monday, September 19, 2005.  ALRDC will receive compensation for organizing this seminar. Chevron has graciously of- fered to host the seminar in their downtown offices in Houston, Texas.  The primary objective is for several experts from the industry, representing Operating Companies, Service/Supply Companies, Universities, and Consultants, to meet with experts from Foster-Miller, a high tech company from New England.  The goal is to explore F-M technologies and see if some of them may add value to our beam pumping systems.  If this seminar is successful, others may be tried in the future.  Advanced Beam Pump Programs:  A half-day “course” is scheduled for Friday, October 7, 2005. It will focus on potential software developments that may advance the profitability of beam pump operations.  One option will be for ALRDC to lead an effort to develop specifications for needed new capabilities, so that various companies can develop them, all working on a “level playing field.”  If this is “course” is successful, it may lead to other similar efforts in the future.  Discussion of the future of this direction is required.  ====== Other ALRDC-sponsored seminars can be considered for the future.

 Discuss, based on input from the Gas Well Deliquification Workshop, possible engagement of ALRDC to help create artificial lift selection guidelines for deliquification of gas wells. Minutes: April 22, 2005 Meeting – A committee of the following three people was appointed to consider this matter and report back to the Board at a future meeting:  Jim Lea  Norm Hein  Cleon Dunham ALRDC Board Meeting October 3, 2005 Page 6

Agenda and Minutes: October 3, 2005  Cleon Dunham. What is the status of the sub-committee?  A first “meeting” of the sub-committee has been called.  The results of this “meeting” will be announced.  ====== There is energy to pursue this topic.  One way will be to discuss this with more people at the 2006 Gas Well Deliquification Work- shop.  Norm Hein will draft a plan to do this.

 Discuss any other business. Minutes: April 22, 2005 Meeting – Lynn Rowlan: We need to understand the needs of the industry in the area of artificial lift. – Lynn Rowlan: We should consider working with PTTC as they explore the ways that Operating Companies collect and use production information. – Benny Williams: We should incorporate guidelines for writing checks into the ALRDC bylaws. Cleon Dunham is to draft a proposed amendment and send it to the Board members for review. (Actually, there already is a guideline in the existing bylaws. It will be reviewed and updated, if necessary. Agenda and Minutes: October 3, 2005  Cleon Dunham. What is the status of the guideline for writing checks?  See the information below that is copied from the approved ALRDC By-Laws, Paragraph 3.6, (iv). Is this sufficient?  ====== The information from the By-Laws is acceptable.

4. New Business

 Hear the proposal by Board Member Hal Rabbino on having ALRDC contribute to efforts to improve safety in the handling of artificial lift equipment. Agenda and Minutes: October 3, 2005  Proposal by Hal Rabbino.  ====== Hal Rabbino made a presentation on IIF – Injury, Incident Free.e  Hal’s presentation will be distributed to the Board.  ALRDC will consider inviting presentations on safety at the workshops it helps sponsor.  Hal Rabbino will provide other suggestions.

 Any other business. Agenda and Minutes: October 3, 2005  Jeff Everson asked if the safety experiences in other industries are similar to those in the Oil and Gas Production Industry.  There is much we can learn from each other.  Cleon Dunham will call an ALRDC Board of Directors meeting for January, 2006, to elect the next class of directors and conduct other business.

The following is copied from the ALRDC By-Laws.

Treasurer

3.6. The treasurer will: ALRDC Board Meeting October 3, 2005 Page 7

Have charge and custody of--and be responsible for--all the corporation's funds and se- curities. Receive and give receipts for moneys due and payable to the corporation from any source. Deposit all moneys in the corporation's name in banks, trust companies, or other deposi- taries as these Bylaws provide or as the Board of Directors or president directs. Write checks and disburse funds to discharge the corporation's obligations. However, funds may not be drawn from the corporation or its accounts for amounts greater than $500.00 without the written approval of the president or secretary in addition to that of the treasurer. Maintain the corporation's financial books and records. Prepare financial reports at least annually. Perform other duties as assigned by the president or the Board of Directors. Perform all of the duties incident to the office of treasurer. ALRDC Board Meeting October 3, 2005 Page 8

Artificial Lift R&D Council (ALRDC)

ALRDC. The artificial lift research ALRDC Web Site. ALRDC and development council (ALRDC) operates a public web site at is a non-profit 501(c)6 organization www.alrdc.com. intended to facilitate: This site contains all: Cooperative efforts in artificial lift ALRDC documents. research and development. ALRDC meeting schedules, agendas, Improved acceptance and use of and minutes. artificial lift technologies through Case histories and best practices. improved dissemination, On-line forum for discussing artificial implementation, training, and lift topics of interest. sharing of best practices. Pertinent artificial lift R&D projects. Information on artificial lift workshops ALRDC Members. Membership in and seminars. ALRDC is open and free of charge Information on artificial lift technical to: committees that work through API and ISO. All oil-field operating company personnel – both majors and independents – that use artificial lift Participation Vital. For ALRDC to in their business. successfully serve the artificial lift All service and consulting company industry, broad participation by personnel that offer artificial lift personnel in Operating products and/or services. Companies, Service Companies, All university personnel that offer an Universities, and Consultants is artificial lift program. essential. ALRDC Services. ALRDC offers the following services to its We strongly encourage you to register (it’s free) and to start using ALRDC’s members: services. Sharing of ideas and best practices. Sharing of information on artificial lift If you wish to advertise your goods or products, services, training services via ALRDC, this is possible for courses, workshops, seminars, etc. a small fee. Also, sponsorships will be Facilitation of R&D projects that can be gratefully accepted. best addressed by sharing costs and/or resources.

For more information, please contact: Cleon Dunham, Oilfield Automation Consulting, [email protected] Dr. Tony Podio, University of Texas, [email protected] Dr. James Lea, PL Tech, [email protected]