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EcoVapor Recovery SystemsJuly 2014

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Colorado Emissions Regulations

• Implemented earlier this year• Focused on Methane emissions– Methane is a greenhouse gas 21 times more

potent than Carbon Dioxide– When you burn Methane, Carbon Dioxide is a

byproduct• Also largely focused on leak detection and

prevention

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Colorado Emissions Regulations Cont.

• Regulation 7 requires oil and gas operators to control methane emissions from oil storage tanks

• The regulation covers all wells making more than 10 BOPD (6 tpy emissions)

• Operators can choose to burn or recovery the gas that comes off the tanks

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How gas come out of oil?

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• Proven innovative emission control system converts tank emissions from waste/incineration to useable NG/NGLs

• A typical 8 well site in the DJ currently incinerates up to $500,000 per year

• 25 ERS units deployed in DJ since 2011• Cumulative capacity 321,200,000 SCF per

year• Remove the VOC equivalents of 28,000

cars/year • Heat over 9,000 homes per year• DJ Opportunity: Billions of SCF per year

Post-Tank Vapor Emission Control

$$ $$

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ERS Provides Economic, Safe, Environmentally Friendly, and Reliable Vapor Recovery

• ERS Units are Economic• By turning flared waste gas into a saleable product, ERS adds to the

revenue of a production location• With no Capital Expense, Operating Expense, or service costs, net profit

is increased• ERS increases the gas sales price by increasing BTU content with our

special patent pending oxygen reduction technology that allows recovery of flash gas at acceptable pipeline levels (<2PPM)

• ERS Units are Safe• Automated and remote monitored system with 30 safety shutdown

triggers ensure the unit is safe• Lower oil tank vapor pressure leads to a reduction in LEL hits and lower

VOC incinerator pressures allowing incinerators to operate in dormant mode and increasing site safetys

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ERS Provides Economic, Safe, Environmentally Friendly, and Reliable Vapor Recovery

• ERS Units are Environmentally Friendly• 99+% emission control• Reduces or eliminates regulatory risk of fines from flaming or smoky

incinerators• Small footprint does not complicate wellsite

• ERS Units are Reliable• Robust design allows for operation at higher line pressures and higher

NGL levels with better liquids management than other VRUs• No impact to well site operations during ERS unit downtime

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ERS systems recover the richest gas on location

• ERS installs systems on location capable of recovering 30, 60, and 120 MCFD depending on the productivity of the site

• Last year’s installations yielded 3000 BTU gas on average• ~$16.00 per MCF net (net of POP, royalty, severance tax,

estimated recovery rates, monthly prices, averaged over 12 month well decline rate)

• Because we remove H2S and Oxygen, we are treated as a gathering or marketing deduct so there is no impact on LOE.

Note: We use actual Producer prices, production costs, gas composition samples and MCF gas captured to calculate values

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ERS30

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ERS60

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ERS120

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HOW DOES THE SYSTEM WORK?ERS Units

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How Does ERS increase BTU content and reduce Oxygen levels?

Gas Pipeline to Processing Plant

Wells Separators Oil TanksFlare (s)

Natural Gas

Oil

Flash Gas

Natural GasNGLs

Excess / outof spec gas

Custody Meter

ERS Units

• Monitors O2 concentration at system inlet and outlet.

• Pipelines allow 10 parts-per-million. Inlet concentrations above 5%

(50,000 ppm) O2 are not uncommon.

• ERS technology actively removes oxygen molecules from tank vapor gas

stream.

• Potential for >10 ppm when the unit is starting up, or restarting if the

wells were off for a time period.

System recirculates gas until O2 concentrations are acceptable.

• Average oxygen at custody meter less than 2 ppm

ERS Vapor Management: Oxygen Removal

Strictly Confidential - Do Not Distribute Without ERS Consent 14

ERS Unit: small footprint on well site

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ERS Unit

3 Vapor Incinerators

Sand Trap Separators

12 500 bbl Tanks