PROPOSAL Merging of Tarblaster AS and ELLYCRACK AS with Tarblaster as the overtaking company

THE COMPANIES Tarblaster and Ellycrack are two independent companies, but they share: office accountant and auditor and use the same R&D institutions Board members, management and shareholders are to a large extent the same.

Tarblaster AS Tarblaster is developing a technology for extraction and upgrading of oil from oil sand, oil shale and the like. The first patent application in extraction and upgrading of oil from oil sand is granted in Canada and is pending in a number of countries. In addition two new applications within the same category have been filed. As a result of the R&D, two additional patent applications are under preparation. The first is called SoundCrack and the second is called PlasmaCrack. At present Tarblaster has invested about NOK 25 million in its project.

Ellycrack AS Ellycrack is developing technologies for upgrading of heavy oil. Ellycrack holds two patents on its VISCOSITOR process in addition to a patent on an electrical upgrading technology called EEC (Electrical Cracking and Conversion). In addition, a new patent named SandBlaster is under preparation. At present Ellycrack has invested about NOK 35 million in its project.

Technologies Tarblaster AS TB1 TB2 TB3 SoundCrack PlasmaCrack Ellycrack AS V1 GasBlaster Nozzle SandBlaster ECC

Industrialisation of the Tarblaster process EST EST Tarblaster TB2 Demon-stration unit TB3 Medium scale plant TB-X Commer-cial plant TB-25 6-10 kg/hr Located in Oslo For continuous operation R&D-Tool 100 kg/hr Located in Trondheim Including of coke regeneration For continuous operation Demo tool 1-10 t/hr Use of existing demo-tool? Proof of scalability 100-500 t/hr 1st commercial step Located on site 2,500 t/hr Reactor 10m x 6m H = 25m R&D-Phase: Commercialisation Phase Tarblaster AS Client / Customer 27/04/2010 Tarblaster AS – René Sass

Industrialisation of the Ellycrack process Viscositor 1 Viscositor2 Demon-stration unit VX Medium scale plant V2K Commercial plant V20 50 bbl/d Located in Trondheim Oil cracking reactor Experimental tool 50 bbl/d Located in Edmonton R&D-Tool Mass and energy balance test Coke regeneration 200 bbl/d Located in Canada Including coke regeneration For continuous operation Demo tool 2,000 bbl/d Proof of scalability Proof and demonstration tool 20,000 bbl/d Regenerator D=5m H=10m R&D-Phase: Commercialisation Phase Ellycrack AS Client / Customer 26/04/2010

Consequences merged companies One company, one management Free float of technologies No internal competition Reduced costs Added value to the merged company compared to two stand alone companies Faster exit through an IPO

The rationale for the merger One company, one management Easier to manage Free float of technologies between the companies Patent situation clear and simple and patents can be shared and internal competition is avoided. Substantial savings Reduced management costs, sharing of equipment and resources Added value to the merged company Higher exit value of a merged company than two companies on a stand alone basis. Faster exit through an IPO It is believed that a merged company can be listed on a stock exchange within a three year period.

The rationale for the merger Easier to finance and thus greater possibility to have the technologies developed and brought to the market A merged company will make it easier to finance the company in the present financial market. Can later de-merge into smaller companies and increase the value. It might be strategic to de-merge one or more technologies in order to increase the value of each or the company. Full freedom to plan the exit as it may beneficial for the company.

The rationale for the merger Release Olav from potential conflict of interest Will eliminate any questions about which company new technologies should be granted to. Reduced risk/hedging All technologies in one company. If one technology fails or takes long time to realize, other technologies can be given priority, thus reducing risk Almost 100% of Tarblaster shareholders are Ellycrack shareholders Merging with Tarblaster means that Ellycrack will also be supported by the professional investor (Epi-V)

The vision of the merged company New Tarblaster AS will be a “clean tech” company which is developing more environmental friendly and cost saving solutions for the heavy oil and oil sand industry.

Profile Solidly funded company until exit International experienced Board of Directors Experienced management and engineering team Profound knowledge and experience in oil processing Empowering environment for new ideas and inventions within the company´s vision Successful ideas are transferred into independent projects and businesses. Development of different projects in parallel

Time schedule Formal Board meetings in both companies June 2010 Extraordinary general assemblies and announcement to company register (Brønnøysund) with 3 months lead time Second week in August 2010 Closing of the merger in extraordinary general assemblies Mid November Design of merged business plan October 2010

Exchange One share in Ellycrack will give one share in Tarblaster whereby Ellycrack´s shareholders will hold 30,83% and Tarblaster´s shareholders will hold 69,17% in the merged company.