1. EcoVapor Recovery Systems
July 2014

2. 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

3. 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

4. How gas come out of oil?

5. 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  $$

6. 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

7. 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

8. 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

9. ERS30

10. ERS60

11. ERS120

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

13. 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

14. 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

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