LNG FUELING SYSTEMS AND LOGISTICS NATURAL GAS POWER FOR SHALE DEVELOPMENT USING NATURAL GAS POWER FOR DRILLING AND HYDRAULIC FRACTURING SEPTEMBER 5, 2013
http://www.youtube.com/watch?v=ahg6qcgoay4 Conceptual, Confidential and Proprietary 1
Agenda Introduction to Prometheus Natural Gas Fueling from LNG - Opportunity Drivers - LNG Fueling Logistics - Why LNG Fueled Drilling - Why LNG Fueled Fracturing 2
Who is Prometheus Energy? SPECIALIZING IN NATURAL GAS FUEL SUPPLY SOLUTIONS VIA LIQUEFIED NATURAL GAS (LNG) 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) 3
We bring a turnkey LNG supplychain for remote natural gas LNG Fuel Supply - Transportation - Logistics Natural Gas In LIQUID Natural Gas Out Liquefaction - LNG supply network located throughout North America - Access to 350k gpd capacity Portfolio of Onsite LNG Equipment - LNG storage & regasification Prometheus Energy s Turnkey Solution BUSINESS CONFIDENTIAL LNG Fueling for: Drilling Rigs Frac Spreads Mine Haul Process Heat Power 4
Why natural gas? A wide and sustained NG-Diesel spread U.S. Hydrocarbon Pricing--Last 16 Years $ per MMBTU $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- NG v Diesel Spread Spot Propane Spot ULS Diesel Henry Hub Natural Gas Economical spread between diesel and natural gas Diesel $20+/MMbtu NG: <$5/MMbtu Stable Price, now and projected 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 Data Source: EIA.gov; National Average Wholesale Pricing for Liquids; National Average U.S. Henry Hub NG Pricing CLEAN ABUNDANT LOCAL Data Source: ANGA 5
Our market is established and growing at over 100% per annum Prometheus Growth & Reliability Deliveries 2009 To Date Number of LNG Truckloads per Month Volume to date (lng gal) >51.1 million 1 st Rig J-09 M-09 M-09 J-09 S-09 N-09 J-10 M-10 M-10 J-10 S-10 N-10 J-11 M-11 M-11 J-11 S-11 N-11 J-12 M-12 M-12 J-12 S-12 N-12 J-13 M-13 Delivery Count (Truckloads) >4,800 deliveries Delivery Reliability Rate >99.9% 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 6
1 LNG Supply Summary (x,000 gpd) 2 Logistics Balancing variable demand with reliable supply LNG Transport Fleet & Logistics Command Center End of 14, >50 LNG road transports 400+ 24 x 7 logistics coverage 80-120 30-80 10-30 3 Onsite LNG Storage & Inventory 4 Management Multiple Sources for each Customer - 3 to 5 days onsite storage for heavy burn days. - Daily site visit by tech, inventory reading, communication of key operations, and telemetry Business Confidential 7
What does a LNG fueled drilling solution look like? 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 Conceptual, Confidential and Proprietary 8
What does a LNG fueled hydraulic fracturing application look like? 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. Conceptual, Confidential and Proprietary 9
Conclusions NOTICE the Dancing Bear! 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 BUSINESS CONFIDENTIAL 10
Questions?? Mike Fradette Business Development Manager 603.540.1025 mfradette@prometheusenergy.com Houston Office (HQ) Prometheus Energy Group, Inc. 10370 Richmond Ave, Suite 450, Houston, TX 77042 (o) 832.456.6500 www.prometheusenergy.com Integrated LNG Fuel Solutions BUSINESS CONFIDENTIAL 11