EcoVapor Recovery Systems July 2014

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

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

How gas come out of oil?

Post-Tank Vapor Emission Control 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  $$

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

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

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

ERS30

ERS60

ERS120

How Does the System Work? ERS Units How Does the System Work?

How Does ERS increase BTU content and reduce Oxygen levels? Wells Separators Oil Tanks Flare (s) Flash Gas Excess / out of spec gas Oil ERS Units Natural Gas NGLs Natural Gas Custody Meter Gas Pipeline to Processing Plant

Strictly Confidential - Do Not Distribute Without ERS Consent ERS Vapor Management: Oxygen Removal 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 Strictly Confidential - Do Not Distribute Without ERS Consent

ERS Unit: small footprint on well site 3 Vapor Incinerators Sand Trap Separators 12 500 bbl Tanks