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LNG FUELING SYSTEMS AND LOGISTICS

NATURAL GAS POWER FOR SHALE DEVELOPMENT USING NATURAL GAS POWER FOR DRILLING AND HYDRAULIC FRACTURING

SEPTEMBER 5, 2013

Conceptual, Confidential and Proprietary 1

http://www.youtube.com/watch?v=Ahg6qcgoay4

Agenda

2

• Introduction to Prometheus

• Natural Gas Fueling from LNG

- Opportunity Drivers

- LNG Fueling Logistics

- Why LNG Fueled Drilling

- Why LNG Fueled Fracturing

Who is Prometheus Energy?

SPECIALIZING IN NATURAL GAS FUEL SUPPLY SOLUTIONS VIA LIQUEFIED NATURAL GAS (LNG)

3

• Formed in 2009 – predecessor company a liquefaction technology play

• Headquartered in Houston, Texas • Operate today in US & western Canada • Offer vertically integrated LNG solutions with a

focus in the oil and gas, mining, power and process sectors

• An on-going, fundamental commitment to Quality, Health, Safety & the Environment

• Privately held--Major Shareholders: - Shell Technology Ventures Fund 1 BV (June, 2009) - Black River Asset Management (September, 2008)

Prometheus Energy’s Turnkey Solution

Natural Gas Out

LNG Fuel Supply - Transportation - Logistics

Portfolio of Onsite LNG Equipment - LNG storage & regasification

LIQUID

LNG Fueling for: • Drilling Rigs • Frac Spreads • Mine Haul • Process Heat • Power

4

Natural Gas In

Liquefaction - LNG supply network

located throughout North America

- Access to 350k gpd capacity

BUSINESS CONFIDENTIAL

We bring a turnkey LNG supply-chain for remote natural gas

Why natural gas? A wide and sustained NG-Diesel spread

5

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

$ pe

r MM

BTU

U.S. Hydrocarbon Pricing--Last 16 Years

NG v DieselSpreadSpot Propane

Spot ULSDieselHenry HubNatural Gas

Data Source: EIA.gov; National Average Wholesale Pricing for Liquids; National Average U.S. Henry Hub NG Pricing

Data Source: ANGA

CLEAN ABUNDANT

LOCAL

• Economical spread between diesel and natural gas

• Diesel $20+/MMbtu • NG: <$5/MMbtu

• Stable Price, now and

projected

Our market is established and growing at over 100% per annum

6

Prometheus Growth & Reliability Deliveries 2009 – To Date

Volume to date

(lng gal)

Delivery Count

(Truckloads)

Delivery Reliability

Rate

>51.1 million

>4,800 deliveries

>99.9%

1st Rig

Num

ber o

f LN

G T

ruck

load

s per

Mon

th

J-0

9M

-09

M-0

9J-0

9S-

09N

-09

J-10

M-1

0M

-10

J-10

S-10

N-1

0J-1

1M

-11

M-1

1J-1

1S-

11N

-11

J-12

M-1

2M

-12

J-12

S-12

N-1

2J-1

3M

-13

Recent Highlights 15+ active LNG fueled drill sites and 4 active or completed bifuel frac application • First turbine powered fracturing pilot in field (Jan) • First Canadian rig fueled (Mar) • 3 new rig contracts awarded in Mid Continent

(May) (operating) • 3+ new rigs contracts awarded in Marcellus (June) • Supply of 3 bifuel fracturing operations (Q1–Q3) • Supported successful drilling of ~500 wells with

LNG fuel solution • Fueled frac pumps for the completion of over 600

stages Location Eagle ford Marcellus Rockies

Onsite LNG Storage & Inventory Management

Logistics – Balancing variable demand with reliable supply

7 Business Confidential

10-30 30-80 80-120

400+

LNG Supply Summary (x,000 gpd)

Multiple Sources for each Customer

1 2

3 4

LNG Transport Fleet & Logistics Command Center

End of ’14, >50 LNG road transports

24 x 7 logistics coverage

- 3 to 5 days onsite storage for heavy burn days.

- Daily site visit by tech, inventory reading, communication of key operations, and telemetry

What does a LNG fueled drilling solution look like?

Conceptual, Confidential and Proprietary 8

Quantifying the Opportunity • Diesel Price is ~$3.50/gal and climbing

An all-in delivered turnkey LNG fuel solution is ______ per DGE

• Assuming an average daily diesel consumption of 1,500 gallons per rig ,the savings are $___ to $_____/day-rig

• This translates to $____k to $500k in fuel savings per year per rig.

• Multiply that over a fleet of 5 rigs => $___ to $___million per year

What does a LNG fueled hydraulic fracturing application look like?

Conceptual, Confidential and Proprietary 9

Quantifying the Opportunity • Diesel Price is ~$3.50/gal and climbing

An frac all-in turnkey LNG fuel solution is $____ to $___ per DGE (cheaper than drilling on DGE basis due to higher fuel consumption)

• Assuming 80 diesel gal/hr-pump peak, 16 pump spread, 2 hour stages, 5 stages per day = 12,800 diesel gallons per day

• With an average displacement of 55%, this translates to a displacement of ~7k DGE per frac day.

• The resulting savings is $_K to $_k per Frac Day • Assuming ___Frac days a year, one would

anticipate annual fuel savings of $__ to $__ million per converted spread.

Conclusions

Safety: Success • Dedication to Safety – Practice a culture of safety through maintaining,

communicating and implementing its QHSE programs Economics: Success

• Up to $_ million savings per rig; $__ million per frac spread Operational Performance: Success

• Commercially proven, operationally reliable LNG Supply Network: Success

• Diverse supply network capable of economically and reliably serving US market

10 BUSINESS CONFIDENTIAL

NOTICE the Dancing Bear!

11

www.prometheusenergy.com

Mike Fradette Business Development Manager 603.540.1025 mfradette@prometheusenergy.com

Integrated LNG Fuel Solutions

Questions??

BUSINESS CONFIDENTIAL

Houston Office (HQ) Prometheus Energy Group, Inc. 10370 Richmond Ave, Suite 450, Houston, TX 77042 (o) 832.456.6500