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R E D U C I N G W E L L D E V E L O P M E N T C O S T S T H R O U G H N O V E L W A T E R
T R E A T M E N T T E C H N O L O G Y A L L O W I N G W A T E R T O B E R E C Y C L E D
W I T H O U T L I M I T D U E T O C O N T A M I N A N T B U I L D - U P
WFV
FONTUS ENVIRONMENTAL CORP.
PRESENTATION TO:
2
I. WATER MANAGEMENT OF FLOW BACK (FRACKING)
II. FracVap TECHNOLOGY – FLOW BACK DISTILLATION
III. BATCH TESTING OF ENTIRE PROCESS
IV. WAREHOUSE PROTOTYPES (2) AND MOBILE FIELD UNIT
V. MOBILE TREATMENT PLANT OPERATIONAL BY END OF 2016
VI. EXXON, HUSKY, CULLIGAN, MATRRIX ENERGY......
■ F l o w B a c k f r o m h y d r a u l i c f r a c k i n g i s s i g n i f i c a n t l y c o n t a m i n a t e d ,
b o t h i n T o t a l S u s p e n d e d S o l i d s ( T S S ) a n d i n T o t a l D i s s o l v e d
S o l i d s ( T D S ) , t h e l a t t e r t y p i c a l l y i n t h e o r d e r o f 1 0 0 , 0 0 0 P P M ;
■ R e l e a s e o f t r e a t e d F l o w B a c k i s p r o h i b i t e d i n b o t h C a n a d a & U S A ;
■ T r u c k i n g o f c l e a n w a t e r t o r e m o t e l o c a t i o n s a n d d i s p o s i n g o f
c o n t a m i n a t e d w a t e r o f f - s i t e i s e c o n o m i c a l l y u n s u s t a i n a b l e a t
c u r r e n t o i l p r i c e s ; a n d
■ F l o w B a c k i s d e e p - w e l l - i n j e c t e d i n s o m e c a s e s w i t h s i g n i f i c a n t
e n v i r o n m e n t a l r i s k t o g r o u n d w a t e r q u a l i t y .
3
THE
■ R e m o v e T S S f r o m F l o w B a c k u s i n g c o n v e n t i o n a l , o f f - t h e - s h e l f a n d
e n v i r o n m e n t a l l y a p p r o v e d w a t e r t r e a t m e n t t e c h n o l o g y ;
■ R e c o v e r c r u d e o i l f r o m f l o w b a c k u s i n g c o n v e n t i o n a l o f f - t h e - s h e l f A P I
( d e n s i t y - b a s e d ) t e c h n o l o g y ;
■ R e d u c e T D S l e v e l s f r o m a r o u n d 1 0 0 , 0 0 0 P P M t o 1 0 , 0 0 0 P P M u s i n g
c o n v e n t i o n a l o f f - t h e - s h e l f f l o c c u l a t i o n t e c h n o l o g y t o m e e t p u r i t y c r i t e r i a i n
a d v a n c e o f r e s i n t a n k s f o r r e m o v e o f s p e c i f i c i o n s t o m i n i m i z e c l e a n i n g
c y c l e s f o r r e s i n s ;
■ R e d u c e T D S f r o m 1 0 , 0 0 0 P P M t o l e s s t h a n 5 0 P P M t h r o u g h f l a s h e v a p o r a t i o n
p r i o r t o e n t r y i n t o r e - c o n f i g u r e d c o o i n g t o w e r e q u i p m e n t f o r c o n d e n s a t i o n o f
v a p o r i n c o n d e n s a t i o n c o i l s , a n d r e - u s e o f d i s t i l l a t e i n f r a c k i n g o p e r a t i o n a n d
w e l l c o m p l e t i o n ; a n d
■ L o w e r w e l l c o m p l e t i o n c o s t s b y C d n $ 6 0 0 , 0 0 0 p e r w e l l .
4
THE
Mobile FracVap Plant
5
Novelties of FracVap
6
■ Latent heat from the well entering the Frac Vap is captured by a plate and
frame heat ex-changer, stored in a thermal bank and used throughout
the process;
■ CO2 generated from flocculation step lowers pH from 11.5 to about 8.5 in
advance of ion exchange resins;
■ Application of Purolite’s Mixed Bed and Specific Ion Exchange Resins
to remove general and specific ions from solution;
■ Re-Configured Cooling Tower from USA Manufacturer:
 Use of Pall Filters to achieve water quality polishing efficiencies ≈ reverse osmosis (requiring psi of
30 rather than 1200 psi required for RO)
 Adapt cooling tower equipment used in A/C applications for building towers to recover water from
back flow produced from hydraulic fracking as distilled water vapor – as pure H2O
 Recover water from water vapor as liquid H2O for recycling and reuse in fracking process. No
limitation to number of times water is recycled as quality is constant ≈ 100% pure.
Novel Steps in FracVap Process
7
Absorption Refrigeration Process Garry to name
Steps in FracVap Process
8
a) SOLIDS REMOVAL
• HYDRO-CYCLONES
• CENTRIFUGE
• DRYING OF SOLIDS
b) OIL RECOVERY
• API SEPARATION
• SELF-CLEANING
ACTIVATED CARBON
c) FLOCCULATION
• LIME & SODA ASH
• LATENT HEAT
• DRYING OF SOLIDS
d) ION EXCHANGE
• CO2 – PH REDUCTION
• MULTIPLE STEP
RESIN TREATMENT
TSS REMOVAL, OIL RECOVERY & TDS REDUCTION: 100,000 - 10,000 PPM
FLOW
BACKFEED
Stage 1
e) MICRO-FILTRATION
• MULTIPLE FILTRATIONS
• PALL FILTERS – EFFICIENCIES
SIMILAR TO REVERSE OSMOSIS
AT SIGNIFICANTLY LOWER PSI
f) FLASH EVAPORATION OF
H2O
• MICRO-PARTICLES
DEPOSITED ON TUBES ARE
RECOVERED VIA PATENTED
PROCESS
g) CONDENSATION OF H2O
• CONDENSATION OF DISTILLED
WATER FOR REUSE IN
FRACKING (CONDENSATION
COILS)
REDUCTION OF TDS FROM 10,000 PPM TO 0 PPM
COOLING TOWER: DISTILLATION & CONDENSATION OF H2O
Stage 2
CONVENTIONAL TSS REMOVAL & MINERAL SALT FLOCCULATION
H2O DISTILLATION USING RE-DESIGNED COOLING TOWER
FracVap Flow Sheet
9
Condensation of H2O
Solids Removal
Oil Recovery
Flocculation
Ion Exchange
Micro-Filtration
Flash Evaporation
Solids
Dryer Dried SolidsA
Crude OilB
Liquid H2OC
Latent Heat
CaO/Na2CO3
CO2 / H2SO4
Make-Up Heat
Back Flow
Fracking Operation
Fertilizer/ Dried
Waste for Disposal
Solids from
condenser tubes
Micro-particles
Self-cleaning
product
Mineral Salts
TSS
WFV’s Three Products
10
WFV produces three (3) products:
A) Solids (dry): Combined solids from centrifuge, resins, filters and cooling tower
tubes are dried in a chemical drier.
B) Crude Oil: Returned to client to off-set service cost of water treatment (≈10
bbl/day @ 1.325 m3/minute).
C) Distilled H2O: Condensed H2O is returned to fracking operation for unlimited
number of cycles (no contaminant build-up).
Equipment Suppliers
Note: Most are locally supplied, 3 are sole-sourced and 1 is re-designed
11
STAGE EQUIPMENT SUPPLIERS NEW/USED
TSS REMOVAL
HYDRO-CYCLONES,
CENTRIFUGE, ETC.
CHINESE SUPPLIER (Cdn$
80,000/unit compared to $
Cdn$ 750/unit in Alberta)
NEW OR USED
OIL RECOVERY API SEPARATION SYSTEM ISO-THERM INC. NEW OR USED
FLOCCULATION
REACTORS, SETTLING TANKS,
CENTRIFUGE, DRYER
NUMEROUS NEW OR USED
ION REMOVAL RESINS & RESIN TANKS PUROLITE NEW
MICRO-
FILTRATION
MIXED BED & MICRO-
FILTRATION
PALL FILTERS NEW
WATER
DISTILLATION
USED COOLING TOWER AND
STAINLESS STEEL TUBES
BALTIMORE AIRCOIL
COMPANY and various
Canadian Suppliers
USED (NH3-
corroded tubes are
removed)
WATER QUALITY
CONTROL
IN-LINE TDS MONITORS, pH
METERS, ETC.
NUMEROUS NEW
MAKE-UP POWER GENSET NUMEROUS USED
MOBILE PLANT
CONTAINERS (3) , SEMI FLAT-
BED TRUCK, PUMPS, PIPING
NUMEROUS USED
Major Equipment
12
Jar Testing Equipment Decanter Centrifuge API Separation System
Jar Testing Equipment Garry to name Chemical Drier
Sand Filters Micro-Filters (Pall) Cooling Tower (Tubes)
■ P r o c e s s f r o m s o l i d s r e m o v a l t o m i n e r a l s o l i d s f l o c c u l a t i o n h a s
b e e n d e m o n s t r a t e d a t l a b - s c a l e i n b a t c h t e s t s , a c h i e v i n g a 9 0 %
r e d u c t i o n i n T D S .
■ A l b e r t a d r i l l i n g c o m p a n y c o n t r a c t e d C u l l i g a n t o v e r i f y d a t a o n
F r a c V a p P r o c e s s . V e r i f i c a t i o n w a s s u c c e s s f u l .
■ E f f l u e n t f r o m r e s i n e x c h a n g e t a n k s w a s t r e a t e d i n r e - d e s i g n e d
c o o l e r t o w e r a c h i e v i n g d i s t i l l e d H 2 O l e v e l s o f p u r i t y i n v a p o r
l e a v i n g c o o l i n g t o w e r ( B a t c h T e s t s ) .
■ P a t e n t s h a v e b e e n f i l e d f o r r e s i n s t e p s i n s t a g e 1 a n d a l l o f S t a g e
2 o f F r a c V a p P r o c e s s .
.
13
Status of WFV
■ B u i l d a 3 5 G P M ( 1 / 1 0 t h o f M o b i l e P l a n t c a p a c i t y ) W o r k i n g
P r o t o t y p e ( f r o m A p r i l u n t i l M a y o f 2 0 1 6 ) i n a w a r e h o u s e ;
■ C h a r g e c l i e n t s C d n $ 1 0 0 k f o r 3 0 - d a y d e m o n s t r a t i o n o f F r a c V a p ’ s
t r e a t m e n t o f f l o w b a c k u s i n g c l i e n t s ’ w a s t e w a t e r ;
■ B u i l d a n d c o m m i s s i o n M o b i l e P l a n t ( f r o m J u l y u n t i l S e p t e m b e r ,
2 0 1 6 ) e a r n i n g C d n $ 2 5 7 K / m o n t h ( a p p r o x ) ;
■ B u i l d s e c o n d W o r k i n g P r o t o t y p e ( f r o m N o v e m b e r u n t i l D e c e m b e r
o f 2 0 1 6 f r o i n d u s t r i a l w a t e r t r e a t m e n t d e m o n s t r a t i o n s ; a n d
■ R e c o v e r y o f i n v e s t m e n t c a p i t a l b y M a r c h o f 2 0 1 7 .
14
Commercial Plan
Warehouse Prototype Mobile Plant
 Treats 35 GPM (0.132 m3/minute);
 Water is heated to temperature
encountered in fracking operation;
 Clients are charged Cdn$ 100K for
a 30-day 24-hour demonstration of
FracVap system;
 Second Prototype shares control
room with first;
 Operating staff of first plant run
the second prototype; and
 Second prototype is used to treat
industrial water sources.
 Treats 350 GPM (1.32 m3/minute);
 Client pays for all chemical reagents
and utilities;
 Oil is returned to the client without
charge;
 Client is charged Cdn 8.50/m3 for
treatment of flow back plus
approximately Cdn$ 0.83/m3 for
reagents after subtraction for
recovered oil;
 EBITDA is Cdn$ 4.67/m3; and
 EBITDA is Cdn$ 357,597/month.
15
WFV’s Business Model:
Terms, Conditions & Assumptions
Projected First Year Financials
(April 2016 – April 2017
16
Financial Item
2016 2017 TOTALS
(Cdn$)Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
INVESTMENT
Warehouse Prototype
Capital ($120,175) ($120,175) ($120,175) ($120,175)
Working Capital ($80,000) ($252,000) ($80,000) ($80,000)
Sub-Total ($200,175) ($372,175) $0 $0 $0 $0 $0 ($200,175) ($372,175) $0 $0 $0
Mobile FracVap Plant
Capital ($396,262) ($396,262) ($396,262)
Working Capital ($104,000) ($104,000) ($104,000)
Sub-Total ($500,262) ($500,262) ($500,262)
Total Capital
Investment
($200,175) ($372,175) $0 ($500,262) ($500,262) ($500,262) $0 ($200,175) ($372,175) $0 $0 ($2,645,487)
REVENUE
Working Prototype $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $200,000 $200,000 $200,000
Mobile FracVap Plant $257,597 $257,597 $257,597 $257,597 $257,597 $257,597
Total Revenue $0 $0 $100,000 $100,000 $100,000 $100,000 $357,597 $357,597 $357,597 $457,597 $457,597 $457,597 $2,845,581
EBITDA (Cdn$) ($200,175) ($372,175) $100,000 ($400,262) ($400,262) ($400,262) $357,597 $157,422 ($14,578) $457,597 $457,597 $457,597 $200,094
1st Warehouse
Prototype
Mobile
Plant
2nd Warehouse
Prototype Recovery of
capital in 12
months
17
OPEX Cdn$/year Cdn$/day Cdn$/m3
Service Charge Paid by Client Revenue for WFV (Cdn$/m3)
Cdn/m3 % Cdn$/m3 %
Operators (4) $ 180,000 $ 493.15 $ 0.26 Not Applicable -$0.26
Supervisors (4) $ 180,000 $ 493.15 $ 0.26 Not Applicable -$0.26
Management $ 905,000 $ 2,479.45 $ 1.30 Not Applicable -$1.30
Other (contracted) $ 150,000 $ 410.96 $ 0.22 Not Applicable -$0.22
WFV's Plant Consumables
Make-Up Energy $ 438,000 $ 1,200.00 $ 0.63 -$0.63 7% Not Applicable
Carbon $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable
Resin $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable
Cao $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable
Na2CO3 $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable
Refrigerant (if necessary) $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable
WFV's Non-Labor-based OPEX Not Applicable -$2.03 -44%
WFV's Labor-based OPEX Not Applicable -$1.80 -39%
OPEX TOTAL (Cdn$) $ 2,103,000 $ 5,761.64 $ 15.79 -$0.99 -$3.83
Service charge (WFV) $ 8.50 -$8.50 91% $ 8.50 182%
Recovery of Crude Oil* $ 300.000 $ 0.16 -2%
TOTAL (Cdn$) -$9.33 100% $4.67 100%
Back Flow Treatment Rate
* Assuming a flow back treatment rate of
1.325 m3/minute
1908 m3/day
Crude Oil Recovered from Flow Back
** Assuming a crude oil recovery rate of
10.0 bbl/day
$ 30.00 Cdn$/bbl
Unit Cost & Revenue Estimates
* Estimated from batch test results
18
Endorsements
Company Contact Position Status
Chevron Rudy Tamayo Water Engineer
Husky Roy Guan
ExxonMobil Mark Mcouat Working Prototype
MATRRIX Robert Van Bostelen VP, Operations
Culligan Chris Larson, Technical Sales
XTO Energy Canada Darrell McOuat Water Management
JJ Crew Collaboration
Letter of Support: XTO Energy Canada
19
Subject: Western Frac Vap
From: "Mcouat, Darrell /C" <darrell.mcouat@exxonmobil.com>
Date: Mon, May 04, 2015 11:22 am
To: "spencer@westernfracvap.com" <spencer@westernfracvap.com>
Cc: "Taylor, Jamie A" <jamie.a.taylor@exxonmobil.com>, "Bruce,
Dean F" <dean.bruce@exxonmobil.com>
Spencer ,
As per our conversation, XTO Energy Canada has expressed interest in the water conversion process that Western Frac Vap has
introduced to us , your ability to covert flow back frac fluid to meet the AER “Test and Release” criteria. This would allow XTO to
store the converted flow back water in larger and more economical storage containment and reuse this fluid for additional fracs.
XTO has offered Western Frac Vap the opportunity to set up their equipment on a couple of XTO’s locations to execute a pilot with
their mobile equipment . If this technology meets the expectations of the Producer there would be a potential for a long term
relationship with Western Frac Vap.
Thanks and look forward to working with you in the future
Darrell McOuat
Water Management
XTO Energy Canada
Suite 400
321-6th Ave SW
Office 403.766.1057
Cell 587.439.4887

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frac vap presentation by serena march 17 2016

  • 1. R E D U C I N G W E L L D E V E L O P M E N T C O S T S T H R O U G H N O V E L W A T E R T R E A T M E N T T E C H N O L O G Y A L L O W I N G W A T E R T O B E R E C Y C L E D W I T H O U T L I M I T D U E T O C O N T A M I N A N T B U I L D - U P WFV FONTUS ENVIRONMENTAL CORP. PRESENTATION TO:
  • 2. 2 I. WATER MANAGEMENT OF FLOW BACK (FRACKING) II. FracVap TECHNOLOGY – FLOW BACK DISTILLATION III. BATCH TESTING OF ENTIRE PROCESS IV. WAREHOUSE PROTOTYPES (2) AND MOBILE FIELD UNIT V. MOBILE TREATMENT PLANT OPERATIONAL BY END OF 2016 VI. EXXON, HUSKY, CULLIGAN, MATRRIX ENERGY......
  • 3. ■ F l o w B a c k f r o m h y d r a u l i c f r a c k i n g i s s i g n i f i c a n t l y c o n t a m i n a t e d , b o t h i n T o t a l S u s p e n d e d S o l i d s ( T S S ) a n d i n T o t a l D i s s o l v e d S o l i d s ( T D S ) , t h e l a t t e r t y p i c a l l y i n t h e o r d e r o f 1 0 0 , 0 0 0 P P M ; ■ R e l e a s e o f t r e a t e d F l o w B a c k i s p r o h i b i t e d i n b o t h C a n a d a & U S A ; ■ T r u c k i n g o f c l e a n w a t e r t o r e m o t e l o c a t i o n s a n d d i s p o s i n g o f c o n t a m i n a t e d w a t e r o f f - s i t e i s e c o n o m i c a l l y u n s u s t a i n a b l e a t c u r r e n t o i l p r i c e s ; a n d ■ F l o w B a c k i s d e e p - w e l l - i n j e c t e d i n s o m e c a s e s w i t h s i g n i f i c a n t e n v i r o n m e n t a l r i s k t o g r o u n d w a t e r q u a l i t y . 3 THE
  • 4. ■ R e m o v e T S S f r o m F l o w B a c k u s i n g c o n v e n t i o n a l , o f f - t h e - s h e l f a n d e n v i r o n m e n t a l l y a p p r o v e d w a t e r t r e a t m e n t t e c h n o l o g y ; ■ R e c o v e r c r u d e o i l f r o m f l o w b a c k u s i n g c o n v e n t i o n a l o f f - t h e - s h e l f A P I ( d e n s i t y - b a s e d ) t e c h n o l o g y ; ■ R e d u c e T D S l e v e l s f r o m a r o u n d 1 0 0 , 0 0 0 P P M t o 1 0 , 0 0 0 P P M u s i n g c o n v e n t i o n a l o f f - t h e - s h e l f f l o c c u l a t i o n t e c h n o l o g y t o m e e t p u r i t y c r i t e r i a i n a d v a n c e o f r e s i n t a n k s f o r r e m o v e o f s p e c i f i c i o n s t o m i n i m i z e c l e a n i n g c y c l e s f o r r e s i n s ; ■ R e d u c e T D S f r o m 1 0 , 0 0 0 P P M t o l e s s t h a n 5 0 P P M t h r o u g h f l a s h e v a p o r a t i o n p r i o r t o e n t r y i n t o r e - c o n f i g u r e d c o o i n g t o w e r e q u i p m e n t f o r c o n d e n s a t i o n o f v a p o r i n c o n d e n s a t i o n c o i l s , a n d r e - u s e o f d i s t i l l a t e i n f r a c k i n g o p e r a t i o n a n d w e l l c o m p l e t i o n ; a n d ■ L o w e r w e l l c o m p l e t i o n c o s t s b y C d n $ 6 0 0 , 0 0 0 p e r w e l l . 4 THE
  • 6. Novelties of FracVap 6 ■ Latent heat from the well entering the Frac Vap is captured by a plate and frame heat ex-changer, stored in a thermal bank and used throughout the process; ■ CO2 generated from flocculation step lowers pH from 11.5 to about 8.5 in advance of ion exchange resins; ■ Application of Purolite’s Mixed Bed and Specific Ion Exchange Resins to remove general and specific ions from solution; ■ Re-Configured Cooling Tower from USA Manufacturer:  Use of Pall Filters to achieve water quality polishing efficiencies ≈ reverse osmosis (requiring psi of 30 rather than 1200 psi required for RO)  Adapt cooling tower equipment used in A/C applications for building towers to recover water from back flow produced from hydraulic fracking as distilled water vapor – as pure H2O  Recover water from water vapor as liquid H2O for recycling and reuse in fracking process. No limitation to number of times water is recycled as quality is constant ≈ 100% pure.
  • 7. Novel Steps in FracVap Process 7 Absorption Refrigeration Process Garry to name
  • 8. Steps in FracVap Process 8 a) SOLIDS REMOVAL • HYDRO-CYCLONES • CENTRIFUGE • DRYING OF SOLIDS b) OIL RECOVERY • API SEPARATION • SELF-CLEANING ACTIVATED CARBON c) FLOCCULATION • LIME & SODA ASH • LATENT HEAT • DRYING OF SOLIDS d) ION EXCHANGE • CO2 – PH REDUCTION • MULTIPLE STEP RESIN TREATMENT TSS REMOVAL, OIL RECOVERY & TDS REDUCTION: 100,000 - 10,000 PPM FLOW BACKFEED Stage 1 e) MICRO-FILTRATION • MULTIPLE FILTRATIONS • PALL FILTERS – EFFICIENCIES SIMILAR TO REVERSE OSMOSIS AT SIGNIFICANTLY LOWER PSI f) FLASH EVAPORATION OF H2O • MICRO-PARTICLES DEPOSITED ON TUBES ARE RECOVERED VIA PATENTED PROCESS g) CONDENSATION OF H2O • CONDENSATION OF DISTILLED WATER FOR REUSE IN FRACKING (CONDENSATION COILS) REDUCTION OF TDS FROM 10,000 PPM TO 0 PPM COOLING TOWER: DISTILLATION & CONDENSATION OF H2O Stage 2 CONVENTIONAL TSS REMOVAL & MINERAL SALT FLOCCULATION H2O DISTILLATION USING RE-DESIGNED COOLING TOWER
  • 9. FracVap Flow Sheet 9 Condensation of H2O Solids Removal Oil Recovery Flocculation Ion Exchange Micro-Filtration Flash Evaporation Solids Dryer Dried SolidsA Crude OilB Liquid H2OC Latent Heat CaO/Na2CO3 CO2 / H2SO4 Make-Up Heat Back Flow Fracking Operation Fertilizer/ Dried Waste for Disposal Solids from condenser tubes Micro-particles Self-cleaning product Mineral Salts TSS
  • 10. WFV’s Three Products 10 WFV produces three (3) products: A) Solids (dry): Combined solids from centrifuge, resins, filters and cooling tower tubes are dried in a chemical drier. B) Crude Oil: Returned to client to off-set service cost of water treatment (≈10 bbl/day @ 1.325 m3/minute). C) Distilled H2O: Condensed H2O is returned to fracking operation for unlimited number of cycles (no contaminant build-up).
  • 11. Equipment Suppliers Note: Most are locally supplied, 3 are sole-sourced and 1 is re-designed 11 STAGE EQUIPMENT SUPPLIERS NEW/USED TSS REMOVAL HYDRO-CYCLONES, CENTRIFUGE, ETC. CHINESE SUPPLIER (Cdn$ 80,000/unit compared to $ Cdn$ 750/unit in Alberta) NEW OR USED OIL RECOVERY API SEPARATION SYSTEM ISO-THERM INC. NEW OR USED FLOCCULATION REACTORS, SETTLING TANKS, CENTRIFUGE, DRYER NUMEROUS NEW OR USED ION REMOVAL RESINS & RESIN TANKS PUROLITE NEW MICRO- FILTRATION MIXED BED & MICRO- FILTRATION PALL FILTERS NEW WATER DISTILLATION USED COOLING TOWER AND STAINLESS STEEL TUBES BALTIMORE AIRCOIL COMPANY and various Canadian Suppliers USED (NH3- corroded tubes are removed) WATER QUALITY CONTROL IN-LINE TDS MONITORS, pH METERS, ETC. NUMEROUS NEW MAKE-UP POWER GENSET NUMEROUS USED MOBILE PLANT CONTAINERS (3) , SEMI FLAT- BED TRUCK, PUMPS, PIPING NUMEROUS USED
  • 12. Major Equipment 12 Jar Testing Equipment Decanter Centrifuge API Separation System Jar Testing Equipment Garry to name Chemical Drier Sand Filters Micro-Filters (Pall) Cooling Tower (Tubes)
  • 13. ■ P r o c e s s f r o m s o l i d s r e m o v a l t o m i n e r a l s o l i d s f l o c c u l a t i o n h a s b e e n d e m o n s t r a t e d a t l a b - s c a l e i n b a t c h t e s t s , a c h i e v i n g a 9 0 % r e d u c t i o n i n T D S . ■ A l b e r t a d r i l l i n g c o m p a n y c o n t r a c t e d C u l l i g a n t o v e r i f y d a t a o n F r a c V a p P r o c e s s . V e r i f i c a t i o n w a s s u c c e s s f u l . ■ E f f l u e n t f r o m r e s i n e x c h a n g e t a n k s w a s t r e a t e d i n r e - d e s i g n e d c o o l e r t o w e r a c h i e v i n g d i s t i l l e d H 2 O l e v e l s o f p u r i t y i n v a p o r l e a v i n g c o o l i n g t o w e r ( B a t c h T e s t s ) . ■ P a t e n t s h a v e b e e n f i l e d f o r r e s i n s t e p s i n s t a g e 1 a n d a l l o f S t a g e 2 o f F r a c V a p P r o c e s s . . 13 Status of WFV
  • 14. ■ B u i l d a 3 5 G P M ( 1 / 1 0 t h o f M o b i l e P l a n t c a p a c i t y ) W o r k i n g P r o t o t y p e ( f r o m A p r i l u n t i l M a y o f 2 0 1 6 ) i n a w a r e h o u s e ; ■ C h a r g e c l i e n t s C d n $ 1 0 0 k f o r 3 0 - d a y d e m o n s t r a t i o n o f F r a c V a p ’ s t r e a t m e n t o f f l o w b a c k u s i n g c l i e n t s ’ w a s t e w a t e r ; ■ B u i l d a n d c o m m i s s i o n M o b i l e P l a n t ( f r o m J u l y u n t i l S e p t e m b e r , 2 0 1 6 ) e a r n i n g C d n $ 2 5 7 K / m o n t h ( a p p r o x ) ; ■ B u i l d s e c o n d W o r k i n g P r o t o t y p e ( f r o m N o v e m b e r u n t i l D e c e m b e r o f 2 0 1 6 f r o i n d u s t r i a l w a t e r t r e a t m e n t d e m o n s t r a t i o n s ; a n d ■ R e c o v e r y o f i n v e s t m e n t c a p i t a l b y M a r c h o f 2 0 1 7 . 14 Commercial Plan
  • 15. Warehouse Prototype Mobile Plant  Treats 35 GPM (0.132 m3/minute);  Water is heated to temperature encountered in fracking operation;  Clients are charged Cdn$ 100K for a 30-day 24-hour demonstration of FracVap system;  Second Prototype shares control room with first;  Operating staff of first plant run the second prototype; and  Second prototype is used to treat industrial water sources.  Treats 350 GPM (1.32 m3/minute);  Client pays for all chemical reagents and utilities;  Oil is returned to the client without charge;  Client is charged Cdn 8.50/m3 for treatment of flow back plus approximately Cdn$ 0.83/m3 for reagents after subtraction for recovered oil;  EBITDA is Cdn$ 4.67/m3; and  EBITDA is Cdn$ 357,597/month. 15 WFV’s Business Model: Terms, Conditions & Assumptions
  • 16. Projected First Year Financials (April 2016 – April 2017 16 Financial Item 2016 2017 TOTALS (Cdn$)Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar INVESTMENT Warehouse Prototype Capital ($120,175) ($120,175) ($120,175) ($120,175) Working Capital ($80,000) ($252,000) ($80,000) ($80,000) Sub-Total ($200,175) ($372,175) $0 $0 $0 $0 $0 ($200,175) ($372,175) $0 $0 $0 Mobile FracVap Plant Capital ($396,262) ($396,262) ($396,262) Working Capital ($104,000) ($104,000) ($104,000) Sub-Total ($500,262) ($500,262) ($500,262) Total Capital Investment ($200,175) ($372,175) $0 ($500,262) ($500,262) ($500,262) $0 ($200,175) ($372,175) $0 $0 ($2,645,487) REVENUE Working Prototype $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $200,000 $200,000 $200,000 Mobile FracVap Plant $257,597 $257,597 $257,597 $257,597 $257,597 $257,597 Total Revenue $0 $0 $100,000 $100,000 $100,000 $100,000 $357,597 $357,597 $357,597 $457,597 $457,597 $457,597 $2,845,581 EBITDA (Cdn$) ($200,175) ($372,175) $100,000 ($400,262) ($400,262) ($400,262) $357,597 $157,422 ($14,578) $457,597 $457,597 $457,597 $200,094 1st Warehouse Prototype Mobile Plant 2nd Warehouse Prototype Recovery of capital in 12 months
  • 17. 17 OPEX Cdn$/year Cdn$/day Cdn$/m3 Service Charge Paid by Client Revenue for WFV (Cdn$/m3) Cdn/m3 % Cdn$/m3 % Operators (4) $ 180,000 $ 493.15 $ 0.26 Not Applicable -$0.26 Supervisors (4) $ 180,000 $ 493.15 $ 0.26 Not Applicable -$0.26 Management $ 905,000 $ 2,479.45 $ 1.30 Not Applicable -$1.30 Other (contracted) $ 150,000 $ 410.96 $ 0.22 Not Applicable -$0.22 WFV's Plant Consumables Make-Up Energy $ 438,000 $ 1,200.00 $ 0.63 -$0.63 7% Not Applicable Carbon $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable Resin $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable Cao $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable Na2CO3 $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable Refrigerant (if necessary) $ 50,000 $ 136.99 $ 0.07 -$0.07 1% Not Applicable WFV's Non-Labor-based OPEX Not Applicable -$2.03 -44% WFV's Labor-based OPEX Not Applicable -$1.80 -39% OPEX TOTAL (Cdn$) $ 2,103,000 $ 5,761.64 $ 15.79 -$0.99 -$3.83 Service charge (WFV) $ 8.50 -$8.50 91% $ 8.50 182% Recovery of Crude Oil* $ 300.000 $ 0.16 -2% TOTAL (Cdn$) -$9.33 100% $4.67 100% Back Flow Treatment Rate * Assuming a flow back treatment rate of 1.325 m3/minute 1908 m3/day Crude Oil Recovered from Flow Back ** Assuming a crude oil recovery rate of 10.0 bbl/day $ 30.00 Cdn$/bbl Unit Cost & Revenue Estimates * Estimated from batch test results
  • 18. 18 Endorsements Company Contact Position Status Chevron Rudy Tamayo Water Engineer Husky Roy Guan ExxonMobil Mark Mcouat Working Prototype MATRRIX Robert Van Bostelen VP, Operations Culligan Chris Larson, Technical Sales XTO Energy Canada Darrell McOuat Water Management JJ Crew Collaboration
  • 19. Letter of Support: XTO Energy Canada 19 Subject: Western Frac Vap From: "Mcouat, Darrell /C" <darrell.mcouat@exxonmobil.com> Date: Mon, May 04, 2015 11:22 am To: "spencer@westernfracvap.com" <spencer@westernfracvap.com> Cc: "Taylor, Jamie A" <jamie.a.taylor@exxonmobil.com>, "Bruce, Dean F" <dean.bruce@exxonmobil.com> Spencer , As per our conversation, XTO Energy Canada has expressed interest in the water conversion process that Western Frac Vap has introduced to us , your ability to covert flow back frac fluid to meet the AER “Test and Release” criteria. This would allow XTO to store the converted flow back water in larger and more economical storage containment and reuse this fluid for additional fracs. XTO has offered Western Frac Vap the opportunity to set up their equipment on a couple of XTO’s locations to execute a pilot with their mobile equipment . If this technology meets the expectations of the Producer there would be a potential for a long term relationship with Western Frac Vap. Thanks and look forward to working with you in the future Darrell McOuat Water Management XTO Energy Canada Suite 400 321-6th Ave SW Office 403.766.1057 Cell 587.439.4887