LaserSense, Inc.

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LaserSense, Inc.Vision

LSI desires to be the exclusive global provider of a unique, proprietary capability that will be used to optimize the productivity of well drilling equipment by providing more accurate and complete information regarding the performance of drill heads

used in shale gas and crude drilling operations

MissionThe mission of LaserSense is to provide well drilling companies with an advanced,

state-of-the-art system, based on accurate measurement of acoustic emissions (AE), for monitoring wear of the drill head while also providing real-time data

regarding drill head effectiveness and rock formation composition

Introduction

Problem: Drilling rigs need to operate efficiently: They are in short supply in some places Changing / replacing the drill head is expensive and

time-consuming Drill head wear reduces productivity of rig operation Better optimization of drill utilization reduces time-on-

site for the drill rig

Also…

Problem: Variations in underground rock formations affect drill rig performance Is the underground formation changing? How is this

affecting drill head performance and wear? Can we improve how we map underground fractures?

Currently, well drilling rigs use a variety of sensor systems (ie pressure, torque) to monitor the drilling process

The Problem:How Can Well Drillers Optimize the Drilling Process?

Can Acoustic Emissions (AE) Testing help to optimize the drilling process?

In 1999, Xiaoqing Sun, in a paper titled “A study of acoustic emission in drilling applications”, presented at the The 37th U.S. Symposium on Rock Mechanics, asserted that AE features can be “… used to identify drilling situations such as the extent of bit wear, impending bit failure (damaged bearings) or formation changes.”

Also…A paper titled “Acoustic emission analysis for rock-bit interactions in impregnated diamond core drilling”, in the June 2014 edition of “International Journal of Rock Mechanics and Mining Sciences” asserted that…“Strong relations between drilling operational parameters and AE were established” and “AE monitoring can improve the drilling performance in deep explorations.”

The Problem: How Can Well Drillers Optimize the Drilling Process?

Is AE Testing a viable method for monitoring the drilling process?

As far back as 1992, in a paper titled “Acoustic – Emission Monitoring During Hydraulic Fracturing”, Lisa Stewart & B.R. Cassell asserted that “Acoustic emissions have been used with varying degrees of success to map hydraulic fractures in sedimentary formations.”

But they also stressed that “the high attenuation of seismic waves in sedimentary rock imposes limitations in the instrumentation and acquisition configurations that can listen to fractures.”

What does all this mean?

AE can be a powerful tool for providing real-time information regarding drill head wear and performance - but current AE tools and techniques may lack the robustness and sensitivity to be successful in this application.

AE refers to the generation of transient elastic waves produced by a sudden redistribution of stress in a material. These stresses can be generated by mechanical loading, including the type of events that a drill head experiences as it cuts through rock formations deep underground. What causes AE?AE starts with stress. There are several different types of mechanical stress:

• Tensile, compressive, bending, shear, torsion

Why does this matter to us?In response to this stress, the material changes in shape. This change in shape can be elastic (not permanent) or plastic (permanent). We are more concerned with plastic deformation, especially when it is caused by crack development, fracturing etc. This cracking or fracturing process (whether it is the drill bit itself or the surrounding rock that is fracturing) is what we attempt to measure.

Technical Overview:

What is “Acoustic Emissions” (AE)?

A Solution:RLI (Robust Laser Interferometer) for Measuring AE

RLI offers the potential to become a powerful new tool for monitoring the drilling process based on the concept of Acoustic Emissions Testing

What is RLI?An advanced, proprietary device, based on laser

interferometry, that measures vibration and AE.

How is it different from competitive technologies?RLI relies on light whereas competitive systems rely on

electro-mechanical sensors and RLI is much more sensitive that other AE measurement systems.

Why is this important?RLI will enable AE Testing to be applied more efficiently

and cost-effectively, for optimizing the well drilling process, in a manner that is not currently possible with other AE measurement devices.

RLI is more much more sensitive than other AE measurement systems - this is important for noisy, real-world situations

A Solution:Why is RLI Better for Measuring AE (Compared to Current Conventional Methods)?

Superior Performance Bandwidth: 0 Hz to 524,000 Hz Dynamic Range: 180+ dB Improved “sensitivity”, better resolution

Higher Resolution Measurements / Better Sensitivity More accurate failure prediction Fewer “false alarms” (false alarms take equipment

out of service when its not necessary) Broader scope of conditions detected

Ease of Use Minimal installation & calibration of sensors; quick

set-up; simple, user-friendly interface Substantially reduced need for ‘a priori’ information

– no need to select the correct sensor

RLI enables AE Testing to be applied in “noisy”, real-world settings

Commercialization Plan Summary (Completed Over 18 months)

1. Demonstrate Feasibility of RLI for Use in Well Drilling Applications

2. Proceed with Signal Analysis and Modeling of Drilling Process

3. Complete System Prototype for Use on Drill Rigs

4. Refine “Marketing & Sales Plan”

5. Complete Manufacturing Plan

6. Launch the New System for Well Drilling Applications: Initial estimate for service sales - $3,500 - $4,500 per dayInitial estimate for hardware sales - $60,000 - $80,000

7. Pursue follow-on applications…Underground rock formation analysis, Metal-cutting / drilling etc.

$25,000 Shale Gas funds would be used for Steps #1 and #2 above

Management Team

John Zarroli: CEO / Director, Business Development / Co-Founder Extensive small business start-up, sales & field technical

experience, related to predictive maintenance, NDT & Reliability-Centered Maintenance

B.S., Industrial & Management Systems Engineering, Penn State University

Joseph Karpov: VP, Manufacturing & Engineering Previously served as VP, Manufacturing, for a sensor manufacturer Joe will spearhead preparation & implementation of Manufacturing

Plan. B.S., Mineral Economics, Penn State University

Jeremy Leahman: Consultant / Board of Advisors Extensive high level management & field experience related to

industrial & predictive maintenance and well drilling lubricants MBA, Darden School of Business, University of VirginiaNon-Contact is a key driver of benefit

Conclusion

RLI is a proprietary technology that can be tailored for a variety of applications related to condition monitoring and non-destructive evaluation of machines and structures

LaserSense, Inc. intends to tailor the technology to optimize the well-drilling process, by providing real-time information regarding the condition of the drill head and the surrounding rock formations

RLI is substantially more sensitive and robust in noisy, real-world applications that would typically overwhelm competing sensors used to measure acoustic emissions

There will be a number of follow-on applications of this well-drilling optimization device, which substantially increases the profit potential of this venture

Future versions of the device will be considerably smaller and lighter

LaserSense will sell services (initially) and hardware (later) based on the RLI technology