Acceleware Ltd. provided an update regarding its commercial-scale RF XL pilot project at Marwayne, Alberta . Previously announced in the third quarter 2023 financial and operating results on November 23, 2023, Acceleware encountered subsurface challenges in redeploying upgraded components during the RF XL heating well workover at the Pilot. As a result, Acceleware paused the workover to review Pilot performance data, continue inspection of the heating well, and to further consider solutions to the challenges encountered in the workover program.

The redeployment is expected to enable higher power to be injected into the reservoir for a sustained period in a second phase of heating. The Pilot performance data confirms the successful operation of the Clean Tech Inverter ("CTI"), which is the radio frequency ("RF") 'engine' critical to Pilot success. A primary objective of the Pilot was to demonstrate the operation of the CTI and its effectiveness in transmitting temperature downhole to increase oil production.

Other significant milestones achieved include: Acceleware drilled and completed the first of its kind multilateral heating well and associated production well in a previously produced heavy oil reservoir. The RF XL system (including the CTI) demonstrated unprecedented performance with the longest continuous run (142 days) and highest power (up to 250 kW) of any RF heating system. Maximum design current was transmitted from the CTI, through the proprietary transmission line, and radiated to the reservoir.

Increased reservoir temperature and oil production were observed in the Pilot. The temperature profile and oil production increase matched simulated predictions given the levels of power radiated. Additionally, critical components of the proprietary RF XL subsurface technology functioned as designed and expected.

The workover was undertaken to address a distributed temperature sensing system ("DTS") failure, during which time the engineering team took the opportunity to examine downhole components. The damage is believed to be the primary impediment to Acceleware's ability to achieve full power in the first phase of heating at the Pilot. As mentioned on November 22, 2023, Ac celebratedware planned to develop several solutions to this challenge and proceed with the option with the highest probability of success and the lowest risk.

The Acceleware team, in consultation with industry partners, has developed what is believed to be a permanent, resilient solution for the issue. Acceleware now plans to continue a second phase of heating after a significant subsurface upgrade plan to address the moisture ingress issue. Subsurface components not removed during the workover will be removed, refurbished, or upgraded, and then redeployed along with the components already upgraded during the original workover program.

This plan was developed in consultation with industry partners and service providers and among the alternatives examined, it is expected to have the highest probability of achieving higher power injected into the reservoir for a sustain period. An additional $5 million of funding is required to complete the redeployment, and Acceleware is actively working to raise these funds. The final timing and cost of the redeployment and subsequent heating remains dependent on financing, partner investment, and the successful deployment of repairs and components.

Additional risks include the availability of service rigs, weather conditions at site, supply chain reliability, and material delivery timing. Upgrades have been specifically designed to eliminate the moisture ingress issue. Acceleware is going to continue to pursue avenues of industry and other financial support to see the pilot through to commercialization.

At this time, the project will be on pause until secure the financial support required for the upgrades and updates to the technology." RF XL is expected to be a transformative decarbonization technology for heavy oil or oil sands production.