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Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

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Page 1: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

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Page 2: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Company OverviewRevolutionary products and services for natural gas compression and transportation:

Design software and services for natural gas compressors and pumping stations

Design software and services for natural gas engine development PANs (patents-pending) -- High performance piping systems for

pulsation attenuation and performance improvement

Improve pumping station reliability by reducing vibrations

Increase gas flow volume up to 30%

Increase compressor efficiency up to 20%

Decrease compressor operating costs up to 20% Decrease compressor station “Carbon footprints” up to 20%

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Page 3: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Team and Strategic PartnersGlen Chatfield

Founder of OPTIMUM Pumping and c0-inventor of PAN technology 1970 Founded Duquesne Systems PA’s 1st software IPO in 1984. Duquesne became Legent Corp and was sold to Computer Associates, 1995 for $1.78

billion Founder and Vice Chairman of the Pittsburgh Technology Council Alumni Fellow of the Penn State College of Engineering

Norm Shade Chairman of ACI Systems World Leader in the Natural Gas Compression industry for more than 30 yrs

Richard James Engineer and IP attorney Former VP of Operations for Voltec

Innovation WorksGas Machinery Research Council -

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Page 4: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

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Norm Shade received the Distinguished Service Awardat the 2013 Gas Machinery Conference

www.southerngas.org

Page 5: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Value Chain

5

Exploration DrillingMidstream

TransportingProcessing

Downstream Transport &

Sales

2013

•Pipelines• Compressors• Gas Storage• Metering

2014

• Marcellus Shale• Pipelines• Compressors• Gas Storage• Metering

Page 6: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Lowering Costs

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Reducing transmission costs is a key factor in lowering energy costs and increasing profitability

Page 8: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Improving Reliability and SafetyPulsation>Vibration>Fatigue>Failures

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Page 9: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Reduce GHG Emission Taxes CARB

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20% Increased Efficiency = 20% LESS GHG Emission Taxes

Page 10: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Current : Pulsation Control Technology

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$800,000 of ANTIQUATED, VIBRATING Bottles with CHOKE-TUBES DISSIPATE 95% of Pulsation EnergyAnd AMPLIFY Pulsation Caused VIBRATIONS

Orifice Plate

Page 11: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Newest Technology: Manifold PANs

PANs Recover 95% of pulsation energy

And Minimize Vibrations

Improves Efficiency up to 20% Increases Gas Flow up to 30% Improves Reliability

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Page 12: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Before – Compressor with 6 Bottles

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Page 13: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

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After – with 6 Junction PAN

14% More Flow

17% More Efficient

17% Less GHG

Page 14: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Founded in 1952

Not-for-Profit Research Corporation

World’s Largest Natural Gas Compression Org.

Gas Machinery Conference Annually

The GMRC will receive 5% of North American PAN Royalties

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Page 15: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

2014 Industry Sponsored Full-Scale Field Test

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Total Capital Required $1,650,000

Funds Raise to Date $1,575,000

Well knownIndustry Sponsors

Will Prove the Benefits of Manifold PANs

Page 16: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

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Craig M. Linn, PEDirector of Engineering

New Pittsburgh Offices

2012Revenue $7.5 bilOperating Income $1.6 bil

Midstream - Marcellus

Pipeline - Alabama

Ranked 7th in the World by Platts

Page 17: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

PAN ROI: El Paso Pipeline Retrofit

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Operating Costs

Horsepower 8,400

80% Usage kW * Hours/Year 43,897,271

$/Kwh 0.10$

Total Electricity Costs per Year 4,389,727$

Manifold PAN

Station Retrofit Cost 1,200,000$

Operating Savings

Efficiency Improvement 10%

Reduced Electric Cost per Year 438,973$

Value of Increased Gas Flow 200,000$

Reduced Maintenance Cost per Year 100,000$

Total Annual Savings 738,973$

10% Eff Improvement

Retrofit ROI of

Less than 2 years

Page 18: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Hardware - Pipes, TST Junctions and supports - $460,000

PAN Design Services - $150,000

PAN Royalty 8,000 hp compressor @ $20/hp - $160,000

Total 1st System PAN Cost - $770,000

Conventional 8 Bottle cost - $800,000

Additional Identical PANs $620,000 -23%

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PRICE Comparison: New PAN6-Throw Pipeline Compressor

Page 19: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

PAN ROI: Midstream Compressor

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Hardware - Pipes, TST Junctions and supports - $200,000

PAN Design Services - $150,000

PAN Royalty 1,300 hp compressor @ $20/hp - $26,000

Total 1st System PAN Cost - $376,000

15% more flow = approx $2,000/day MORE Profit

6 month ROI

Additional Identical PANs $226,000 -40%

4 month ROI

Page 20: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

El Paso Field Trial

Ellisburg, PA Station

July 2009

New Proven Technology: Tuned Loop PANsPipeline Comb Filters

Page 21: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Loop PAN Lab Demonstration

Page 22: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Tuned Loops – Applications

Gas Flow MetersPulsation Protection to Reduce FailuresImprove Accuracy of Flow Measurement

Centrifugal CompressorsPulsation Protection to Reduce FailuresAllowing Concurrent Operation with Recips

Pipeline Vibration and Noise Problems

Loop PANs Fix Very Expensive Problems!

Page 23: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

PAN Patent Protection More than 30 PAN technology patents are pending or

issued in the most significant gas producing and consuming nations

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Page 24: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Design Software & Services

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• 20 yrs. of Development• Over 2 Million Lines of Patented and Proprietary Code• Model-Based Design Technology Optimization Technology

Real Gas (methane) NIST Data Physics

10

100

1000

Speed

Increase over

conventional

design tools

Page 25: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

5 year Pro Forma

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OPTIMUM Pumping Technology

2013 2014 2015 2016 2017

RevenueGMRC PAN Project Consulting Services $50 $100

Software Sales $0 $100 $200 $300 $400

Design Services $0 $300 $600 $1,200 $2,400

PAN Royalty $0 $450 $1,350 $4,050 $12,150

Total $50 $950 $2,150 $5,550 $14,950

ExpensesPersonnel $202 $350 $450 $550 $650

Office and Equipment $100 $160 $192 $230 $276

GMRC PAN Project R&D $30 $30 $30 $30 $30

Engineering Services $150 $250 $300 $600 $1,200

Sales and Marketing $40 $60 $90 $135 $203

Software Royalty $49 $50 $100 $150 $200

IP and corp expenses $160 $160 $192 $230 $276

Other $20 $40 $60 $90 $135

Total $751 $1,100 $1,414 $2,016 $2,970

Profit/(Loss) ($701) ($150) $736 $3,534 $11,980

Page 26: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

2013 MilestonesOctober

Attended the Gas Machinery Conference and Promoted PAN technologies

GMRC approved a $400,000 investment in PAN Field Test Project

Williams agreed to provide a midstream PAN Project test site

Test site visited and approved

November TTE Conference

OPTIMUM model existing baseline bottle compressor

OPTIMUM and ACI design the midstream PAN

Williams approval of proposed PAN design

December Complete Project funding

GMRC Project Supervisory Committee final approval to proceed with Project

All contracts signed by the GMRC and Williams

Close VC investment in OPTIMUM Pumping

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Page 27: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

2014 MilestonesJanuary

GMRC Project Supervisory Committee approves 1st Project milestones

February

Instrument, measure and validate baseline bottle compressor model

May

GMRC Project Supervisory Committee approves 2nd Project milestones

June

Install the PAN and measure its performance

October

Present GMC Paper on the Results of the GMRC PAN Field Test

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Page 28: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required

Use of $2mil Proceeds

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Working Capital 800,000$

Patent and IP Legal Expenses 200,000$

IT Hardware and Software 80,000$

GMRC Membership 40,000$

Engineering Software 200,000$

Multi-Stage Compressor support for VPS 50,000$

Pipe Network Simulation in VPS 100,000$

Vibration System Simulation Interfaces with VPS 60,000$

European Expansion 100,000$

Middle East Expansion 100,000$

Central and South American Expansion 100,000$

Pacific Rim Expansion 100,000$

Asian Mainland Expansion 150,000$

2,080,000$

Page 29: Optimum Power Technology - West Virginia University...The GMRC will receive 5% of North American PAN Royalties 14 2014 Industry Sponsored Full-Scale Field Test 15 Total Capital Required