A telemetry tool is placed in a drill string adjacent to a drill bit. The telemetry tool includes position and direction sensors, a power supply, a signal receiver and a signal emitter. An external base unit, may be mounted on the surface at some distance from the wellhead. The external base unit generates, and transmits into the geological formation, a carrier signal. The carrier signal may be a DC carrier signal, and it may be a variable DC signal.
The base unit also has a receiving unit, which may have the opposite DC voltage to that of the carrier signalemitting unit. The geological formation provides a large current path between the carrier current generating unit and the downhole end of the drill string. The carrier current, or some portion thereof, is received at the telemetry unit. The drill string defines a relatively low resistance conductor for the return signal. Thus a circuit is established from the base unit, through the geological formation to the telemetry unit, and back up the drill string to end back at the base unit.
The telemetry unit superimposes a time varying signal on the carrier current. The time varying signal includes a recognition sequence, followed by a data string. The data string may include information pertaining to compass direction, azimuth dip, rotational speed, acceleration in any of three axes, and so on.
The base unit strips the signal off the carrier current, and reads the code. This system may tend to permit the telemetry tool to operate at relatively low power. The relatively higher power carrier current is provided by the base unit.