LNG FUEL SOLUTIONS LATEST DEVELOPMENTS NEW FRONTIERS IN ENERGY 2012 SEPTEMBER 25, 2012
Agenda AGENDA Introduction to Prometheus Case for LNG Why it s sustainable Latest developments Opportunities for investors 2
Prometheus Overview SPECIALIZING IN NATURAL GAS FUEL SUPPLY SOLUTIONS VIA LIQUEFIED NATURAL GAS (LNG) Headquarters in Houston, Texas Predecessor company started 8 years ago as a Liquefaction technology play Repositioned in 2008 as vertically integrated LNG production and supply Operations throughout US & western Canada Named Platts Energy Award Finalists in 2011 and 2012 Privately held--major Shareholders: Shell Technology Ventures Fund 1 BV (June, 2009) Black River Asset Management (September, 2008) 3
We are a pure-play on the Oil Natural Gas spread USA Hydrocarbon Pricing 1 ($ per MMBtu) USA Oil-Derived Fuel Consumption 2010 Total = 167MM gpd 25.00 20.00 15.00 #2 Diesel Wholesale Propane Wholesale Natural Gas1 Marine 9% Heat 7% Farm 5% Industrial 4% Off Highway 3% 10.00 5.00 0.00 Highway 58% Others 4% Power 3% Oilfield 2% (1) Natural Gas price is Citygate from 90-00 and Industrial after 2001 Off Pipeline customers make up a sizeable market Source EIA.gov 4
We provide turnkey supply, logistics, equipment & service Natural Gas In Natural Gas Out Liquefaction Transportation Onsite storage Regasification LNG Fueling for: Drilling Rigs Industrial Boilers 5
The key is our portfolio of supply sources Surety of supply is critical Customer demand is volatile Supply disruptions are commonplace We manage the transportation cost implications Our robust supply portfolio enables us to manage through the surprises 6
The case for LNG LIQUEFIED NATURAL GAS (LNG) is less costly and cleaner than Diesel and Propane alternatives Lower Cost than Diesel and Proppane Cleaner lower NOx and Particulate emissions Reliable sufficient supply and predictable delivery times Safe comparable procedures to industrial gas Proven making deliveries today 7
Today s spread makes LNG the low cost option for industrials Total Cost of Fuel Dollar per Day 7000 6000 $3.40 ULSD Delivered 100mi $1.60 Propane Delivered 100mi $6.0MM 2-3mi Pipeline$2.80 gas +LDC 5000 4000 3000 2000 1000 LNG Sweet Spot Delivered 300 Mi Diesel Propane LNG Pipeline 0 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Daily Fuel Consumption Gallons of Diesel Equivalent LNG is more cost effective than oil-derived fuels and more immediate than Pipeline construction projects 8
It s sustainable customer economics hold up into the future Diesel v. LNG Current Cost Stack Dollar per Diesel Gallon Equivalent Diesel v. LNG Future Cost Stack Dollar per Diesel Gallon Equivalent 3.50 3.50 3.00 2.50 20% to Customer 3.00 2.50 18% to Customer 2.00 2.00 1.50 Storage and Regas Delivery/Adder 1.50 1.00 Commodity 1.00 0.50 0.50 0.00 Diesel LNG 0.00 Diesel LNG Today: $98 Crude, $2.80 NG Future: $80 Crude, $6.00 NG Innovation, access to capital and customer density are the keys Source EIA.com 9
And Natural Gas is a much cleaner alternative Combustion Products NOx g/bhp-hr 7 6 5 4 3 2 1 0 Diesel (3512C) PM g/bhp-hr 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 NG (3516B) Diesel (3512C) NG (3516B) Fuel Switching is the easiest path to achieving emissions control goals Source Cat Data Sheets for 1300ekw 3516B and 3512C 10
LNG is Reliable and Safe Prometheus Deliveries 2008-2012 Reliability maintained while growing deliveries by 225% Safety Record Exposure Hours Since Operation* (Employees + Contractors) 754,544 LTIs / Total Recordable Incidents 1/1 STC for 12 Life Saving Rules 1.0 STC for Defensive Driving Course 0.85 Regulatory Violations/Citations 0 Shell Resources and Practices: Incident Investigation and Reporting HSSE Auditing Crisis Management Program Contractor Management Program 12 Life saving Rules Journey Management Program Source : Prometheus logistics system for delivers through June, 2012 Note:*Tracked since January 2009 through 8/31/2012 11
The Industrial LNG market is entering a phase of rapid growth Recent Developments Prepared for Growth New Markets Opening New Entrants Appearing Currently delivering 40-50 kg each day Preorder kit to serve anticipating growth Opportunity pipeline up 40%+ since June Supply network in place to support 4x growth Firsts for Prometheus Dedicated rig in Marcellus Customers in Canada, NH and TX Multi rig/multi year Temp Power project Frac engine tests New Applications/Inquiries Bi-Fuel (CAT DGB ) Back-up Fuel Remote Communities Linde for equipment and services UGI & Centerpoint in LNG supply Transgas for transport/logistics in New England Equipment manufacturers adding capacity Merchant LNG plant developers The new entrants validate the opportunity and reduce supply chain risk for buyers we welcome this healthy competition 12
We complete by offering a proven solution set Experience and Learning Completed over 200 wells using dedicated LNG solutions Currently supplying - 9 drilling rigs under 6 drilling operators - 7 industrial sites Strong safety culture and LNG project execution know-how Delivery reliability (>99.9%) with 225% growth in deliveries Applied: New Solutions, Commercial Innovation, Supply Market insight Kit that Fits Best mix of storage and vaporization capability for each application Maximize capital efficiency Interchangeability across applications Network Density Build out supply network to reduce delivery radius Customer aggregation/clustering Prometheus Energy and its key partners have pioneered and commercially proven the use of LNG as a favorable alternative to distillate fuels 13
Opportunities for Investors Investment Areas Merchant LNG plant projects Lease Finance - Customer Assets - Mobile Kit - Transportation Cryogenic equipment makers and fabricators Engine technology players APS, GFS & Westport O We are looking for. New sources to buy liquefaction capacity Sites to build new liquefaction facilities - Clean and compressed gas - Gas Cryo plants - Close to markets - Large Gas users Partners to explore creative ways to grow in this marketplace 14