Investor Presentation AltaCorp Capital Energy Services Conference January 14-16, 2014 0
Company Profile GASFRAC Energy Services Inc. is an innovative North American based well-fracturing company that has developed a patented waterless Liquid Petroleum Gas (LPG) gel technology that yields higher reservoir production while…
Investment Considerations Leading patented waterless Liquid Petroleum Gas (LPG) gel fracturing technology Currently the only Company offering LPG fracturing solutions in the market Technology adoption accelerating growth in revenue…
Corporate History 2006 2007 2008 2009 2010 2011 2012 2013 Company EUB First Tech trialed Publicly listed TSX listing Two year 2,000nth frac founded approval fracture in numerous on TSX-V US operation contract with Patent formations…
Refocus, Resize & Reenergize Management change in September 2012 Four objectives set: Right-size cost structure Further improve service delivery Value add service enhancements Hybrid LPG Engineered Fluids Broaden customer…
Business Summary GASFRAC is committed to enabling increased recovery of hydrocarbon reserves through a proprietary LPG technology and innovative service delivery Proprietary process positively impacts the economics of customers well…
GASFRAC Experience As December, 2013: over 2,300 Fracs on over 700 Locations 302,000 gallons of LPG and of 143 million pounds of proppant Largest job to date: 1.5 million pounds, 24 stage (15,000 foot horizontal) Highest pressure…
Growing World Class Reference Customer Base 8
Equipment Setup and LPG Technology 9
Patented LPG Technology - Key Attributes and Advantages Fifteen product and process patents issued or pending Innovative design of closed stimulation process and injection method LPG is a naturally occurring hydrocarbon that is…
LPG Technology: Significant Advantages VS. Conventional Greatly enhances production and project economics both initially and long term 100% of fracturing fluids recovery Can be handled as a liquid on the Surface No water…
LPG Technology: Significant Advantages VS. Conventional Area Contributing Post Area Contributing Post LPG Frac Conventional Frac 12
LPG Technology = Increased Well Performance More effective frac lengths achieve 100% quicker recovery than traditional hydraulic fracturing techniques Higher initial production and immediate economic benefits for Customers 13
Cumulative BOE: S. Texas 60000 50000 40000 BOE 30000 20000 10000 0 0 20 40 60 80 100 120 140 160 180 Days Gas Frac Average Water Frac Average 14
Significant Environmental Benefits Waterless Eliminates issues associated with water use and disposal Sustainable Ongoing reuse of LPG from production to dry gas reservoirs No Biocides or other harmful chemicals Reduced truck…
Technology/Service Delivery Evolution Offer the delivery of this process using three equipment configurations: Conventional LPG 32 Tonne Conventional LPG 100 Tonne Hybrid LPG Increased daily delivery volumes & improved fluid mixing…
Evolution of Fluids 1st Generation - 100% Propane Propane must be vaporized into gas phase 2nd Generation LPG mixtures Fluid recovered as liquid by blending with lease crude Simplified flowbacks and reduced net costs 3rd…
Enhance Service Delivery Hybrid LPG HYBRID LPG Expands our daily proppant placement beyond 100 Tonne limit Allows improved operational integration Reduces time on location HYBRID LPG 250T Frac System 250 Tonne Proppant Addition…
Engineered Fluids Formation compatibility Local availability / reduced transportation Recoverable net cost of frac fluid thus minimal 19
Engineered Fluid - Full Cycle Value 2. RESERVOIR IS FRACTURED WITH ENGINEERED FLUID (LPGs and ENGINEERED LIQUID HYDROCARBONS) are FLUID. recovered directly down Sales Line. 1. ENGINEERED Determine the gathering systems FLUID FROM…
Average IP Rate: S. Texas Example 1400 1200 1000 Average IP (BOE/d) 800 600 400 200 0 Water Frac Propane Frac C4 + Frac Small Hybrid frac Large Hybrid Frac 21
Enhance Service Delivery Engineered Fluids 80 70 57 60 48 50 / 90 day Cum BOE Water Cost 40 LPG Cost 30 Hybrid LPG Cost 24 20 10 0 Water Cost LPG Cost Hybrid LPG Cost 22
Frac Economics: Example Water Frac NGL Frac Pump: 110 K Pump: 120 K Frac Fluid: 18 K Frac Fluid: 196 K H2O Transfer: 7 K Total: 316 K Disposal: 5 K Recovery: (148 K) Total: 140 K/stage Net Cost: 168 K/stage 23
Market Opportunity Fracturing market in North America has grown from 15.5 billion in 2010 to 31 billion in 2013 and is expected to be 34.2B in 2014 International fracturing market has grown from 2.6 billion in 2010 to 5 billion in…
Growth Strategy North America focus targeting greater US Exposure Expand market share with current core customers Move new customers from trials to conversions Currently trials ongoing with a number of new customers Target adoption…
Financial Overview Select Balance Snapshot Bank debt funding working capital current balance of 25 million drawn from 50 million facility 200 million of equipment assets (9 sets of fracturing equipment) Convertible debenture of 40…
Revenue History 180 160 140 Millions 120 100 USA 80 Canada 60 40 20 0 2008 2009 2010 2011 2012 27
Investment Considerations Leading patented waterless Liquid Petroleum Gas (LPG) gel fracking technology Currently the only Company offering LPG fracturing solutions in the market Technology adoption accelerating growth in revenue and…
Contact US James Hill, CEO GASFRAC Energy Services Inc.1900, 801 - 6 Ave. SW Calgary, ABT2P 3W2 Tel: (403) 237-6077 Fax: (403) 269-3722 Email: jim.hillgasfrac.com 29
Appendices Why an alternative fracturing fluid Characteristics of ideal fracturing fluid Surface tension Fluid recovery Example LPG re-frac The LPG Advantage 30
Why an Alternative Stimulation Fluid GOAL: Enhance ultimate recovery (EUR) Today's reservoirs: Declining Quality Micro Darcies vs. Milli Darcies Low pressure / depletion Clays (swelling, movable) Proppant embedment / Fluid…
Characteristics of Ideal Fracturing Fluid Ultimate Reservoir Performance & Certainty Create the required fracture geometry Effective proppant transport Effective proppant transport Non-damaging (water blocks, polymer residue, clay…
Fluid Recovery Impact of LPGs Low Viscosity, Lower Surface Tension, Solubility/Miscibility, Lower Density (Higher Drawdowns) Leading to Higher % and Quicker Load Recovery 100% WATER LPG % OF LOAD FLUID 50% 0% 0.1…
Example LPG Re-Frac 300 Incremental Reserves from LPG Fracture Treatment 23 Years (8 Months) 250 Perforate & Produce 200 Rate (BOE/Op Day) 26 % Incremental Reserves : 305 K 243 K = 62 K BOE 150 16 T Proppant Stimulation…
The LPG Advantage Understanding Problems LPG/HYBRID LPG Solution Reservoir Fluid Clay Swelling Miscible with reservoir Under-Pressured Zone Hydrocarbons Compatibility and Time Low Permeability Low Surface Tension and Fracturing Fluids…
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