Tarblaster Technology Day Planning Document 04/12/08 Chris Dudgeon, OTM Consulting Ltd chris.dudgeon@otmnet.com

Objectives of Technology Day Engage interest of end-users Start the rumour-mill going Understand end-user perceptions Make sure we’re in good shape to go forward with the technology Verify in front of the right crowd who won’t throw rocks too soon Agree key activities Identify end-user preferences to access the technology Explore potential business models Start to look for other investors Gain initial commitment

Tarblaster Key Messages CAPEX reduced by ~80% I think this may be more important than 6 months ago, now that Shell and StatoilHydro have each shelved CAPEX plans, with lower oil price. We may want to strengthen this proposition? Yes, I agree. Low energy consumption Self-sustained with energy by combustion of about 12% of the recovered oil. low value energy (the most heavy part of the oil) CO2 emissions reduced by 20-30% Clean dry sand emitted – no wet tailings No water consumption Extraction and upgrading oil sand in one operation Output oil directly to refinery Easy to scale up Increased value of oil by: Increased API from 8 to 25 (need to confirm latest data…) Agree. Reduced sulphur (50-60%) and metal (90-95%) content

Key Challenges for Mining-Based Operations Cost of operations, maintenance Overall recovery Quality of extracted bitumen and market acceptability Water use Energy use and natural gas dependence Air emissions Environmental footprint Let us see my calculations when we meet. Source - Oil Sands Technology Roadmap, Alberta Chamber of Resources, Jan 2004

Tarblaster Introductory Text Tarblaster is a process for the simultaneous extraction and upgrading of oil from oil sand, oil shale and other particle-oil mixes (e.g. sludge) in one operation, without the use of water or steam. The basic process can be described in 5 key steps: Oil sand is injected into a low high-temperature reactor, heated by partial combustion of the oil in the injected sand. Within the reactor, oil is stripped off the sand, and partial cracking also takes place. The sand is then conveyed pneumatically into a riser by the hot gases, and routed to a cyclone. Within the cyclone, the sand is separated from the stream and is returned to the reactor, and the solid-free gases are transported to a condensation system. The condensation system is a dual procedure, avoiding formation of emulsions, and resulting in two streams of liquid oil and water. The sand from the reactor is discharged continuously into a steam boiler which extracts the heat in the sand for steam generation, prior to final discharge of clean, dry sand. A test rig has been operating at SINTEF, Norway since July 2008 Oil sand oil with an initial grade of 10 API has been extracted at 350C and upgraded to 25 API oil, at a production rate of 2 barrels/ day 15 hours of operation have been completed

Tarblaster a/s Technology developed by Tarblaster a/s Norwegian company CEO - Olav Ellingsen Investors include energy-sector VC Tarblaster will develop, refine and commercialize this revolutionary and highly beneficial technology, which offers substantial economic benefits to clients engaged in the extraction of oil from oil sand and oil shale.

Tarblaster Commercialisation Options License revenue (per barrel) from licensors Sale of IP to operator or contractor Own operation

Operating Principles

Established incumbents, with committed technology/ infrastructure (and environmentally challenged) New entrants, thinking about what to do Contractors (eg Lurgi, Bantrell (Bechtel)) Government Universities, PTAC? Invitees

Format of Day Wednesday 21st January 2009 Calgary 10.00am-3.00pm See draft ‘flow of the day’ overleaf Venue possibilities Hotel – convenient, smart, neutral Oil company offices, is any friendly to Tarblaster yet (eg StatoilHydro?) – credibility, endorsement, but could be seen as biased OUR NEW CONTACTS WITHIN StatoilHydro may be friendly. University – a bit utilitarian, emphasises techie credentials, any universities (particularly Uni of Calgary) engaged with Tarblaster yet? NO Research Institute (e.g. Alberta Research Council, in Edmonton and Calgary) – decent facilities, fairly neutral, may help to initiate local network Plus: One-day trip to a materials handling plant on Tuesday Potential meetings with Govt officials on Thursday

Draft Flow of the Day Where will the technology be best suited????? 10.00 Welcome and introduction 10.15 Presentation of Tarblaster technology 10.45 Q&A 11.15 Identification of perceived strengths of technology 12.00 Sandwich lunch 12.45 Roadmapping 1: Identification of key challenges, possible solutions, and timeline 13.45 Roadmapping 2: Gauging interest in specific initiatives, such as co-funding development, hosting a pilot plant, etc 14.30 Conclusions and action plan Presentation of sample boxes 15.00 End Where will the technology be best suited?????

Workshop Materials Presentation slides Video/ pan-and-tilt look-around test rig Or live video-link to test rig in Trondheim? Process/ templates/ materials for facilitated roadmapping Takeaways Bottles of tar sand, produced oil, sand Professional brochure

Supporting Material

Probably need to revise economic model, with latest oil-prices YES Economics (1) Probably need to revise economic model, with latest oil-prices YES Synenco (2) TarBlaster Investments (3): 8 400 000 000 USD Investments (4): 375 000 000 Capacity pr day 114 500 Barrels 50 000 Capacity pr year 41 220 000 18 000 000 Oil price API 45 72 Oil price API 25 50 Blending price -14 Net sale price 58 Gross cash flow pr year 2 390 760 000 900 000 000 Gross year of payback 3,5 Years 0,4 (1) On a gross level meaning not included operational- and financial cost or tax (2) Source: presentation on Synenco.com (3) Reduce with USD 2,3 billion in assumed payment of land lease (4) Included investment in fuel trucks and front loaders (USD 100 mill)

Economics (2) – Tarblaster 50 Probably need to revise economic model, with latest oil-prices YES Investments (1): 375 000 000 USD Capacity pr day 50 000 Barrels Capacity pr year 18 000 000 Oil price API 25 50 Cost pr barrel (2) -20 Tax 25% -7,5 Net sale price 22,5 Net cash flow pr year 405 000 000 Net year of payback 0,9 Years Included investment in fuel trucks and front loaders (USD 100 mill) Included USD 1,25 pr barrel in license fee to Tarblaster AS and USD 2 pr barrel in land lease

Economics (3) – Tarblaster 10 (add-on) Probably need to revise economic model, with latest oil-prices YES Investments (1): 44 000 000 USD Capacity pr day 10 000 Barrels Capacity pr year 3 600 000 Oil price API 25 50 Cost pr barrel (2) -10 Tax 25% Net sale price 30 Net cash flow pr year 108 000 000 Net year of payback 0,4 Years