Dealing with the large volume of production water co-produced with oil & gas is a large problem that is getting bigger. Industry needs alternatives to reduce injected disposal volumes and seismicity; the ecovap natural evaporation tower solution reduces the volumes at the wellhead.

1. BOSTON Ÿ DENVER
BOISE Ÿ BURLINGTON Ÿ CHICAGO Ÿ DALLAS Ÿ GREENWICH Ÿ HOUSTON Ÿ LOS ANGELES Ÿ NEW YORK
ORANGE COUNTY Ÿ PHILADELPHIA Ÿ SAN DIEGO Ÿ SAN FRANCISCO Ÿ ST LOUIS Ÿ TAMPA Ÿ WASHINGTON DC
LONDON, UK Ÿ SAO PAULO, BRAZIL
ECOVAP TOWER EVAPORATION &
THE NEED FOR A DISRUPTIVE SERVICE-TECHNOLOGY SUITE
Joel Schneyer & Anna Wall
October 24 - 25, 2018
Denver, Colorado

2. 2
AREAS OF DISCUSSION
Drivers of produced water volumeI
III ECOVAP solution suite
II Produced water disposal landscape

3. I .
DRIVERS OF
PRODUCED WATER
VOLUME

4. 4
Source: Wood Mackenzie, Oil Supply Tool
0 1 2 3 4 5 6 7 8 9 10 11 12
Cumulative liquids production 2025 (million bpd)
BreakevenUSD/bblBrentequivalent
0
20
40
60
80
100
120
Lower 48 Tight Oil Onshore Deepwater Shallow Breakeven Price
Mid-Continent
SCOOP/STACK
Bone Spring
Wolfcamp
Eagle Ford
other L48 tight oil
Bakken
Niobrara
TIGHT OIL IS HERE TO STAY I

5. 5
FRAC DESIGN HAS EVOLVED TO OPTIMIZATION …
2010 - 2012 2013 - 2015 2018+2015 - 2017
DOES FRACKING WORK?
Frac Designs:
- Quality Proppant
(240 lbs/ft proppant)
- Space Between Stages and
Clusters (380’ spacing for both
stages and clusters)
- Packer, Ball & Sleeve
- 4 bbl/ft fluid
DOES SPACING MATTER?
Frac Designs:
- 2x Sand Volume
(390 lbs/ft proppant)
- Less than Half the Cluster
Spacing
(300’ stage spacing, 150’ cluster
spacing)
- Mix of Packer, Ball & Sleeve,
Cemented Liner PnP
- 9 bbl/ft fluid
CAN INTENSITY GO HIGHER?
Frac Designs:
- > 2x Sand Volume
(930 lbs/ft proppant)
- 1/3 the Cluster Spacing (240’
stage spacing, 42’ cluster
spacing)
- All Cemented liner PnP
- 25 bbl/ft fluid
- Diversion technology
DATA-DRIVEN RIGHT SIZING
Frac Designs:
- Proppant Optimized to
Reservoir
(600-1,200 lbs/ft proppant)
- Stages and Clusters Spacing
Optimized to Site
(200-300’ stage spacing, 30-50’
cluster spacing)
- All Cemented liner PnP
- Diversion technology, evolved
Source: Whiting Petroleum Presentation at Enercom August 2018; Emerge Energy Services Investor Presentation August 2018
1.6 1.6 2.8 3.1 3.3 4.3
6.4 7.4 7.8
0
10
2011 2012 2013 2014 2015 2016 2017 2018E 2019E
'000Tons
Average Proppant Per Horizontal Well
I

6. 6
Source: adapted from Source Energy Services Corporate Update Presentation May 11, 2018
Impact to Raw Material Supply
& Waste Disposal Industries:
• Higher demand for counterparty reliability due to tighter
logistics windows (just-in-time requests)
• Higher demand for production/capacity to respond to
peaking due to job variability
Exploration
Drilling Completions Raw Materials
Drilling
Refining
Raw Materials
Exploration
Completions
Historical E&P Structure: Risk Management Emerging E&P Structure: Process Management
• Focus on exploration:
mitigate risk to prove
resources / reserves
• Unpredictable activity,
based on discoveries
• Oilfield services (and
materials) outsourced
• Focus on efficiency: mitigate
operational costs
• Feedback/optimization
between processes
• Predicable activity, based on
demand
• Oilfield services (and
materials) vertically integrated
or managed
… CONCURRENT WITH A SHIFT IN THE E&P INDUSTRY PARADIGM I

7. 7
THE E&P INDUSTRY’S APPROACH TO WATER IS EVOLVING I
Source: Select Energy Services Investor Presentation, August 2018
Pre – 2008
Conventional Vertical
2008 – 2010
Early Horizontal
Emerging
Multi-Well Pads
Current
Leading Edge
Horizontal
Frac Water Per Well1
~15,000 bbls ~75,000 bbls ~600,000 bbls Up to 6 million bbls
Equivalent Tank Truck
Loads 2 ~115 ~575 ~4,620 ~ 46,200
Lateral Length
(Feet) 3 ~1,500 ~3,500 ~10,500 ~10,500
Logistical Challenges
Minor Complex
E&P Approach
Minimal Mission Critical
Completion trends have increased water demand by >30x in the last 10 years

8. 8
Source: BTU Analytics Presentation at Enercom August 2018
Permian Eagle Ford DJ Niobrara MidCon Power River Bakken
Oil Takeaway Yes No Soon No No Soon
Gas Takeaway Yes No Soon Soon No No
NGL Takeaway No No Yes Soon Soon Yes
Gas Processing No No Yes Soon No Yes
Produced Water Yes Yes Soon Yes No No
IBUT CONSTRAINTS ARE BUILDING
Estimated Severity of Constraints in Near Term (2018-2020)

9. 9
Source: Federal Reserve Bank of St Louis
LED BY LOGISTICS RELATED INFLATIONARY PRESSURES I
-12.5%
-10.0%
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
Quarterly Percent Change in PPI
Drilling Frac Sand Truck Freight Rail Freight
-22%
-8%
13% 11% 10%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
2014 2015 2016 2017 2018
YTD Percent Change in PPI
Drilling Frac Sand Truck Freight Rail Freight

10. 10
SHORTAGE OF TRUCK DRIVERS TO MAKE DELAYS EVEN WORSE
“More than 70 percent of goods consumed in the U.S. are moved by truck”
– American Trucking Association
At the start of 2018, only one truck was available for
every 12 loads needing to be shipped, the lowest
ratio since 2005
– DAT Solutions
0
20
40
60
80
100
120
140
160
180
2012
2013
2014
2015
2016
2017
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
(ThousandsofDrivers)
Shortage of US Truck Drivers
(Demand - Supply)
Shortage to Double in
Severity by 2022
Source:: WSJ Jan 2018, NPR April 2018, American Trucking Association, RBN, DAT Solutions
0
2
4
6
8
10
12
14
Jan-17
Feb-17M
ar-17
Apr-17M
ay-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
RatioofShipmentstoDrivers
Trucking Shipments Waiting for Drivers
I

11. 11
TRUCKING FOR WATER DEMANDS MUCH HIGHER THAN FOR SAND
Source: Energent data (June 1 – October 1 2018); Kondash et al. (2017)
-
2,000
4,000
6,000
8,000
Barnett DJ-Niobrara Eagle Ford Marcellus Haynesville
Frac Sand, Fracking Water, and Produced Water as Truck Demand Per Well
0%
50%
100%
Barnett DJ-Niobrara Eagle Ford Marcellus Haynesville
Frac Sand and Water as Proportion of Per-Well Trucking Demand
Trucks/Well - Proppant Trucks/Well - Frac Water Trucks/Well - Produced Water
I

12. 12
Source: G Collins, (Aug 9 2018 ), PWS Permian Basin 2018 Symposium
IF PERMIAN OIL PRODUCTION GOES
UP BY 1 MM BO/D …. THAT CREATES
NEARLY 6 MM BW/D TO DISPOSE OF
OR TREAT
$1 Billion Produced Water
Disposal Company
475,000 bbl w/day x
$.75 EBITDA margin/bbl x
7.7x EV/EBITDA multiple
… AND WALL STREET IS DIALED-IN I
• Private Equity finds this an attractive space and is already an active source of capital

13. II.
PRODUCED WATER
DISPOSAL LANDSCAPE

14. 14
PRODUCED WATER VOLUMES VARY BY BASIN AND TIME
Source: Kondash et al., (2017), Science of the Total Environment
Total Formation Produced Water (million liters/well)
10-25% of Total Produced Water Per Well 20-50% of Total Produced Water Per Well
II
IN ADDITION:
Typical frac job is
200,000 to 300,000 bbl

15. 15
WITHIN EACH BASIN THERE ARE WIDE SALINITY VARIATIONS
Total Dissolved Solids Spatial Variation of Formation Water in Wolfcamp,
Pennsylvanian, Devonian, and Ordovician
BRINE COMPOSITION SHIFTS SPATIALLY AND AT DEPTH
Depth
Source: Engle et al., (2016), Chemical Geology; Chaudary et al, (2016 ), New Mexico Water Resources Research Institute,
II
Total Dissolved Solids (mg/L)

16. 16
… AND BASINS HAVE UNIQUE SALINITY FLOWBACK TRENDS
Source: Kondash et al., (2017), Science of the Total Environment
II
Salinity (TDS, mg/L)
• Brackish (blue area, <5,000 mg/L)
• Saline (green area, 5,000 < x <33,000 mg/L)
• Hypersaline (orange area, >33,000 mg/L)
Cumulative water production (million liters)
Water for oil (million liters)
LEGEND:

17. 17
INJECTION WELLS TREATMENT FOR REUSE
BENEFITS
} Supports long-term aquifer recharge
} Cost effective both from both capital and
operating cost perspectives
DETERRENTS
} Increasing permitting & regulatory restrictions
on injection volumes
} Increases likelihood and frequency of induced
seismicity
EVAPORATION
BENEFITS
} Removes risks of induced seismicity
} Generates incremental oil skim revenues
DETERRENTS
} Low return on investment
} Large surface area required for installation
} Forced evaporation contaminates surrounding
area
} Birds flying into oily ponds
} Seasonal and regional differences in
evaporation rates
CURRENT PRODUCED WATER DISPOSAL OPTIONS II
Source: Report of the Oklahoma Produced Water Working Group, April 2017
BENEFITS
} Reduces stress on freshwater demands
} Removes risks of induced seismicity
DETERRENTS
} Upfront capital investment to build
desalination facility
} Desalination has high operating cost
} Recycling for fracking requires that mineral
content and bacteria levels fall within suitable
ranges
} Match of well completion activity with recycled
water for fracking reuse
} Desalination
$3.58 - $7.49/bbl
} Reuse for Fracking
$.57/bbl + transport
} SWD Injection
$1.09/bbl + transport
} Pond Disposal
$ Competitive pricing to injection + transport
MARKET SHARE: +/- 90% MARKET SHARE: +/- 5% MARKET SHARE: +/- 5%

18. 18
FLOWBACK PROFILE ILLUSTRATES CURRENT DISPOSAL CHALLENGES
Source: H2O Midstream, (Feb 22, 2018 ), Permian Basin Water in Energy Conference
II
Peak varies
from
30-80%
of total
flowback
volume
Storage:
600,000 bbls for 45 days
Peaking:
1.5M bbls for 110 days
Intermediate:
3.5M bbls @47% capacity utilization
Baseload:
10.5M bbls @97% capacity utilization
110,000
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Time (days)
TemporaryPipePermanentPipe
Assumes new well comes online every 3 days. Total of 16.1M bbls water disposal in Year 1
FlowbackVolume(bbls)

19. 19
SALTWATER DISPOSAL SYSTEMS ARE CHANGING
SWDW
Evaporation
COWDF
Truck to SW Disposal Site
SWDW
Pipelines to SW Disposal Site with H2O Recycling
Inject = $ 1.09/b + transport charge
Clean brine for fracking = $ .57/b + transport charge
Desalinated for surface discharge, power, and industrial use = $3.58/b to $7.49/b (includes pipeline transport)
Low processing
High processing
$
$$$
Source: disposal costs taken from Report of the Oklahoma Produced Water Working Group, April 2017
II

20. 20
Injection Well Depth* Earthquakes (Jan 1 2017 to Oct 21 2018)**
Source: * Scanlon et al (2017); **TexNet Seismic Monitoring Program – Bureau of Economic Geology
IISWD INJECTION INDUCING SEISMICITY

21. III.
ECOVAP
SOLUTION SUITE

22. 22
INTRODUCTION TO THE SOLUTION III
ECOVAP Inc. is a diversified wastewater disposal company that offers a
suite of solutions and services solving the dilemma of disposal
uncertainty in exploration settings:
Ø Proprietary patent-pending low-energy technology that evaporates
water 59 times faster than mother nature alone in a footprint 30x
less than conventional evaporation ponds
Ø Modular tower system that can be installed at a central pad or at
the well site, significantly lowering the number of trucks required
to reach other disposal options
Ø Applicable to any industry with wastewater disposal challenges in
need of rapid water evaporation:
Ø Oil & Gas produced water
Ø Brine concentration for mineral recovery (e.g. lithium)
Ø Mine tailing ponds
Ø Remediation
Solves the demanding land requirements of evaporation ponds, the
demanding investment requirements of pipelines, AND
the impending limitations to injection wells

23. 23
UNIQUE DESIGN MAXIMIZES SURFACE EVAPORATION
HOW IT WORKS:
Ø HDPE panels with airfoil design create hundreds of saturated vertical
water columns that hold water in suspension
Ø Complete tower saturation reached in minutes using a low-energy
recirculating pump
Ø Higher available surface area enhances solar- and wind-driven
evaporation via convection, i.e. requires no additional power
III
INDEPENDENT ENGINEERING REVIEW:
} Potential results: “ECOVAP’s technology may be
over 60 times higher than the rate provided by
the conventional surface water evaporation
approach.”
} Actual field test results: “For the entire test
duration, daily water meter data indicate that the
Evaporation Tower is 59 times more efficient in
evaporating water than the approach relying on
the surface water evaporation only.”

24. 24
SIMPLE CONSTRUCTION AT THE WELL SITE III
ON-SITE EXAMPLE: 400 BWPD WELL
Ø Portable, reusable, self-cleaning
panels designed to be erected in
cubes with rubber mallets by
small team in ≤10 days and
maintained by one person
periodically
Ø Concentrated brine and solids in catchment basin
transported to SWD injection facility and/or oilfield landfill
collection centers by standard water-hauler or vac trucks
only as necessary
Ø Modular towers can be built and
installed by existing ponds, well
sites, or pads without
foundation, concrete pad, or
exterior supports

25. 25
REDUCES SOCIAL & ENVIRONMENTAL IMPACTS III
LESS LAND CONSUMED/DISTURBED:
• Tower is 30x reduction in footprint from conventional 23 acre pond
FEWER TRUCK TRIPS:
• 40 - 97% produced water volume reduction on-site = fewer haul trips
LESS WATER INJECTED:
• 40 - 97% less water volume transported to SWD well
• Reduction in stress to formations that cause seismicity
NO ADDITIONAL AIR EMISSIONS:
• Same or lower VOC emissions from oil recovery than current practice
• Reduction in trucking reduces greenhouse gas emissions from the tailpipe
LESS RISK OF HAZARDOUS WASTE
EVENTS:
• Eliminates potential leaks from
pipelines
• Reduces groundwater mixing /
pollution
• Reduces potential for trucking
spills
Basin Reference
PW Salinity
(ppm)
Annual Truck-Trips
without ECOVAP
(# Trips/Yr)
Annual Truck-Trips
with ECOVAP
(# Trips/Yr)
% Trucking
Reduction With
ECOVAP
Uintah 12,500 1,216 30 97%
Niobrara 40,000 1,216 97 92%
Permian (Cline) 80,000 1,216 194 84%
Example for 146,000 bbl/yr Produced Water

26. 26
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
Williston
Marcellus
UintahBasin
Eagleford
Haynesville
PowderRiver
Niobrara
Permian
(Wolfcamp)
Permian
(Cline)
Midcon(Stack)
Midcon
(Scoop)
ProducedWaterSalinity(TDS,ppm)
DisposalCost/BarreltoCustomer
Example Per-Basin Costs by Type of Disposal
SWD COST RECOVERY COMPARISONS III
Typical Trucking + SWD Disposal Costs **
* ECOVAP base capital and operating cost recovery for 20 well 8,200 bwpd system (i.e. includes capital recovery fee @ 20%, fixed, variable, and downtown costs). Cost projections are based on historical average
formation water salinities and pan evaporation rates where representative data is available. Actual performance may vary.
** Transport costs can exceed $7/bbl in some exploration areas; e.g. Marcellus – Utica & Williston Basin
*** H2O Midstream base capital and operating cost recovery ranges for 98,000 bwpd system (includes capital recovery fee @ 20%, fixed, variable, and downtown costs). Adapted from H2O Midstream Presentation,
Permian Basin Water In Energy Conference (Feb 22, 2018).
• Significantly less than
typical truck transport
+ SWD disposal costs
of > $3/bbl
• Compares favorably
with 98,000 bwpd self-
built integrated
pipeline & injection
well facility at less than
10% of scale
98,000 bwpd Pipeline & Injection Well Facility ***
TDS (ppm)
ECOVAP

27. 27
III
Source: Gompers et al, (2015), HBS Working Paper
Graphic modified from Clayton Christensen, HBR 2015
Ø Logistics costs and
availability are a clear and
growing constraint
impacting E&Ps
Ø Relationship between salt
water injection and induced
seismicity is not coincidence
Ø ECOVAP’s technology is patent pending
protected
Ø New disruptive innovation? Yes!
Business As Usual
Is Not Sustainable
ECOVAP is to wastewater disposal
as the light bulb was to candles
Ø ECOVAP’s modular well-site
solution solves the disposal
investment and transport
hurdle for exploration
companies and/or small
operators looking to prove
up acreage before a sale
Ø ECOVAPS’s costs are
comparable with integrated
pipeline and SWD injection
for produced water in most
basins
CLOSING THOUGHTS

28. 28
QUESTIONS?
Jason Mendenhall
Chief Executive Officer
702.234.4605
jason@ecovap.com
Jeff Knowles
Chief Financial Officer
801.360.9182
jknowles@ecovap.com
Joel Schneyer
Managing Director
303.619.4211
jschneyer@capstoneheadwaters.com
Anna Wall
Vice President
970.580.5096
awall@capstoneheadwaters.com