Henk Jelsma, President of Radial Drilling, talks about their technology that changes the game for horizontal drilling applications.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back. Hello folks. Welcome to Texas Business Radio. We’re glad to have you back. We’ve got a real interesting segment here. We’re talking about innovative technology. Matt Register had to step out but George Walden is in. What do you think George about this particular segment?
George Walden: Well, I love technology. And I love technologies, especially in the drilling sector that improve our footprint.
Jay Curry: Yes.
George Walden: Whatever we can do to reduce that footprint like fracking and doing it better and, and not causing so much waste is good for our country.
Jay Curry: So, this is going to be very innovative. That’s George Walden over there, I’m Jay Curry. Before we get started let me remind you to call in. We have a 24 hour call in 844-814-8144. We monitor #TBR as in Texas Business Radio, #TBR. And as always, you can go to Texasbusinessradio.com. Everything’s there, all of our speakers, all of our sponsors, George, Matt, myself. It’s, it’s power packed with everybody we’ve ever had on the program, all the themes. Texasbusinessradio.com. So sit back, relax and enjoy this very interesting segment we’re going to have on some real innovation going on out there. I have here in the studio Henk Jelsma. Did I get it close?
Henk Jelsma: That is correct.
Jay Curry: We’re delighted to have you here. Thank you for coming on. Tell us, what is, you’re the President of Radial…
Henk Jelsma: Radial.
Jay Curry: Radial, just like it is spelled, huh? Radial Drilling, Radial Drilling. What is Radial Drilling? And what are you doing?
Henk Jelsma: Well, Radial Drilling is a different way of developing your reservoir, improving your reservoir and increasing your production. We basically use very high pressure and a fluid, mostly water, to break down the rock, to penetrate the formation and make, actually, drainage channels up to about 300 feet, depending on formation to improve the flow into the main well bore. We improve production and to rehabilitate older wells that have basically petered out over time.
Jay Curry: Okay. So what we’re doing here is very interesting, very innovative technology. Where you’re using high pressure and you’re able to go out directly 90 degrees and all kinds of directions. And, how’s this being applied? Is it being applied in new drilling? Land drilling? You’re not doing it over, in the water. Right? You’re doing it on land. Is it for improving current wells?
Henk Jelsma: It’s mostly done on land. For one thing because of the offshore safety regulations, cost of operations and things like that. The technology has been actually developed initially, mainly for the smaller operators.
Jay Curry: Okay.
Henk Jelsma: That would like to afford an optimization method or an improvement method that is actually affordable. That was the main aim of this. It has grown in the meantime and we are being used by almost everybody. The exit from the main well bore is perpendicular to the casing. So if the casing is at that angle, we come out at an angle. The path that we follow can be 90 degrees but can also be 45 degrees or any level there of to reach a target that people have in mind.
Jay Curry: A ha! So we’re targeting.
Henk Jelsma: We’re targeting.
Jay Curry: Okay. So I’m trying to picture this. You’ve got the pipe going down into the hole. And now you can begin to drill directly out in different directions, different levels. And you’re creating another borehole that’s smaller, obviously, but going out at angles from… So, how does all of this work? What, what’s the advantage? What are, what are we gaining by this?
Henk Jelsma: Okay. First of all, when we’re inside the casing, we come out the casing perpendicular. Right there. We’re not building any kind of curvature like you do with directional drilling. We go out straight from the casing. So our system that goes into the well vertically down, turns around the corner within the casing. And if that’s a four and a half…
Jay Curry: Wow! That’s got to be miniature. Huh?
Henk Jelsma: It’s miniature and it’s taken off. If you look at the history of the radio, you use to have a big light bulb that powered the radio. Now we have a transistor. That miniaturization is what we have done in the oil and gas industry. The penetration itself, there is two actions. Number one, we need to cut the casing. In other words we have to make an opening.
Jay Curry: You’ve got to break through.
Henk Jelsma: We have to make an opening in the casing. That is done purely mechanical with, with a drill bit, a drive shaft and high revolution motor but all within that confined ID, internal diameter.
Jay Curry: Space, right?
Henk Jelsma: The second step is actually penetrating the rock and that is done with very high pressure and some type of a jet. That has either rotating movement or a static movement but an erosion movement. The jet breaks down the rock and the jet also has jets that go backwards and that actually pulls the system into the formation. So we’re not pushing.
Jay Curry: Really?
Henk Jelsma: It’s pulled by itself. An exaggerated comparison is like a rocket that goes up in the air, the reverse of the rocket pushes the rocket up. Well, we do that in the formation. That makes this go forward, go into the formation and make, makes the hole.
Jay Curry: This is very fascinating new technology. And what, so the advantages; your faster, your cheaper.
Henk Jelsma: The big advantages is, in older wells for instance, you have massive near well bore damage from production.
Jay Curry: Right.
Henk Jelsma: People tried to eliminate that with chemicals and all kinds of other methods to do so. That is all just temporary. What we do, we go through that near well bore damage and go into the clean formation and start producing. Big advantage. The other advantage is that with the radials, the channels that we make into the formation. That can be done on one level, two level, on whatever levels. We’ve done as many as eight levels. You increase the drainage radius because you access the reservoir with a 1 to 2 inch penetration over an extension of anywhere from 0 to 300 feet. That creates a massive additional drainage radius and will drain. And therefore the ultimate recovery of this well is much more than if you would just drill a vertical well.
Jay Curry: So this can take a well of very small production and turn it into a nice producing well.
Henk Jelsma: Yes.
Jay Curry: At a reasonably cheap price, very quickly, using basically pressure. And when you talk about pressure, you talk about serious pressure.
Henk Jelsma: We talk about serious pressure. We, to break down the formation, you need anywhere between 4,000 and about 11,000 PSI in normal sedimentary reservoirs. If we go to metamorphic, it uses volcanic type rocks, we need much more. But fortunately, those rocks don’t have oil.
Jay Curry: All right.
Henk Jelsma: So we don’t worry about those.
Jay Curry: So we were talking before you came on about acceptance of technology. You’re really doing most of your work overseas.
Henk Jelsma: Yeah.
Jay Curry: What, talk to us a little bit about that.
Henk Jelsma: Well, overseas it seems to be easier for one thing. The big advantage is; I’ve worked all my life overseas. And I have laid groundwork to lots of friendships, political connections, geological connections and structural connections. And have done quite a lot of advising to foreign oil companies. Coming up with something new to people like that, it’s easily accepted because I’ve already gained the level of confidence. The U.S. is, as I mentioned before it’s a very new country compare to all the others. But there is a tremendous amount of tradition here, specifically in the oil field. We are still using technology from the 1920s when we drill well. And that is not changing very rapidly simply because, well, if you don’t need to fix it if it’s not broke. I think that’s an old Texas saying.
Jay Curry: Yeah.
George Walden: Yeah.
Henk Jelsma: And acceptance of new technology also has a lot to do with a level of liability. I mean if somebody comes up with something new, the people look at it skeptical, the financial people will say “Well, where is all the history and all the…”
Jay Curry: The lawyers get involved.
Henk Jelsma: Yes, the legal paperwork. I mean for example, in Russia a contract is two pages, in the U.S. an average contract is two inches.
Jay Curry: So, about four to one, of the work you’re doing overseas versus the work here. But growing, growing here as well. Right?
Henk Jelsma: Interestingly enough, with the lots of new interest from foreign person, people that come to the United States to buy up smaller fields because this is actually the only country in the world where what’s in the ground, you can own. No one else you can do that. So that’s a good feeling. So these people come here and they have the money to do things. The traditional U.S. companies, smaller companies require financing, it’s a long road to get something done.
Jay Curry: Which makes it hard…
Henk Jelsma: Makes it tough.
Jay Curry: To bring new technology. But thank goodness we’re getting some…
Henk Jelsma: Yes.
Jay Curry: New technology coming in. Folks, we’re talking to Henk Jelsma who is the President of Radial Drilling. And, Henk this has been a real pleasure. If somebody wants to get a hold of you, how did they do that?
Henk Jelsma: Well, we are, we have offices in Calgary, in Houston, in Buenos Aires. We are in How-da, Holland. There is not only cheesing in How-da, they do have oil and gas industry. We are in Almetievsk, Russia and we are in New Delhi, India and in Kuwait.
Jay Curry: Okay.
Henk Jelsma: The best number to reach us is simply www.radialdrilling.com.
Jay Curry: Radialdrilling.com.
Henk Jelsma: Yes.
Jay Curry: Radialdrilling.com. Okay. We’ve got a break and pay a few bills. But we’re gonna be right back. We’re talking about innovation technology. Innovation. Good stuff. Thank you sir. Folks don’t go away. We’ll be right back.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.