LocusBio-EnergySolutionsUpstreamApplications

LocusBio-EnergySolutions,LLCNovember16,2017

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LocusBio-EnergySolutions

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• FouryearoldOhio-basedcompanywithpatentpendingmicrobe-basedsolutionsforupstream,midstreamanddownstreamapplications

• World-class teamofR&Dscientists– havesolvedmanyoftheproblemsplaguingtraditionalmicrobialtreatmentsthatleadtomarginalorineffectiveresults

• NowcommerciallytreatinghundredsofwellsintheAppalachiaareaafteryear+ofpilotprojects

• LaunchingpilotprojectsinTexasQ42017with6E&Poperators

• UpstreamApplications– costcompetitive,effective,andenvironmentallysafe

- Paraffincontrolinwellbores,flowlinesandtanks

- H2Sandcorrosionreduction

- Productionenhancement

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• Portfolioofnaturally-occurringmicrobesusingpatent-pendingmicrobegeneration/fermentationprocesses

• Microbialcocktailsarecustomizedforeachcustomer

• Microbesarenon-toxic,biodegradable,andnon-GMOwithnospecialhandlingrequired

• Localfermentationensuresmaximumpotencyatpointofapplication: Upto1000xgreater

• Operationalinanewregionwithinfourmonths

LocusTechnologySuccessDrivers:FreshMicrobes- InHighConcentrations- AppliedinHours

UpstreamApplications

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Application DescriptionParaffin Removal • Eliminateparaffin andsludgebuildup

- Wellborecomponents- Flowlines and tanks- Potentialformidstreamapplications- tankers,ships, trucks,pipelines

• Increaseswellproductivityand potentiallyincreasesrecoverablereserves• Proveninover300wellsinAppalachia

H2S&Corrosion Control • Suppresssulfatereducingbacteria(SRB) thatproduceH2Sandcausecorrosion• SequesterexistingH2Sandmercaptans• Fieldleveloperations• Potentialformidstreamanddownstreamissues

Enhancedrecovery&wellstimulation

• Increaseoilrecoverybyreducing IFTandselectivelypluggingthiefzones• Successfullyvalidatedinstripperwells inAppalachia

• Formationtype:SandstonesandCarbonates

• Depth:1,500’– 10,000’

• Porosity:7- 25+%Porosity

• Operatingtemperature:Upto190°F"wellboretemperature"

• Operatingpressure:Nobottom-holepressurelimitations

• Salinity:1,000-100,000ppmTDS

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LocusTreatmentsEffectiveacrossrangeofGeologies,Depths,Porosities,TemperaturesandSalinities

ParaffinDispersal• Dispersesparaffinbyeffectiveemulsificationandkeepingitsuspendedinsolutionthroughbio-solventsandbio-surfactants.Effectivedownthewellbore,throughtheflowlines,andwithtanksludge.

• Shortensparaffinchainswithnoadverseimpactonhydrocarbonprofile(PIONA)orincreaseinacidity.Certifiedbythreerefineriesthatnobyproductsareharmfulorunsuitableforrefiningprocesses

EnhancedProductionEffect• Dispersesexcessiveparaffintoimproveflow.• Reducesinterfacialtensionandcrudeviscosityandalterswettabilityofrockclosetothewellboretoeaseoilaccessandflowfrompores.

• Progressivelydissolvesbio-polymerssuchaspolylacticacid(PLA)andguarfrompreviousfracsthatotherwisemightbeblockingpartsoftheformation.

ProtectionfromCorrosion• MicrobesandmetabolitescanreduceconcentrationsofSRBs,otherbacteria,andbiofilms. 5

ParaffinTreatment- NumerousMechanismsofAction

EffectOfOurParaffinTreatments

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EffectonSuckerRods:AppalachianBasin

Before After

Before

Microbial Hotwater Hotoil Solvent Chemicals

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þ

þ

Reducescorrosivebiofilms

Cleansflowlinesandstoragetankbottomsaspartoftreatment

ReducedLOEthroughlessfrequenttreatments&strippingjobs

ParaffinTreatment:ReducesLong-termCosts

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þ

LOWER

COSTS

þProgressivelydissolvebio-polymersfromprevioushydraulicfracs

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1.00

10.00

100.00

600 800 1000 1200 1400 1600

OILRAT

E-B

BLS/DA

Y

DAYS

EXAMPLEPRODUCTIONHISTORY- DETAILRATE PRE-TREATFORECASTRATE

BEGINTREATMENTPROGRAM

1.00

10.00

100.00

1000.00

0 200 400 600 800 1000 1200 1400 1600

OILRAT

E-B

BLS/DA

Y

DAYS

EXAMPLEPRODUCTIONHISTORYRATE PRE-TREATFORECASTRATE

INCREMENTALPOST-TREATMENTOIL=343BARRELSPERCENTINCREASEOVERFORECAST=87%

ParaffinRemoval– AppalachianVerticalWellChangeinProductionDecline

Microbial Hotwater Hotoil Solvent Chemicals

þPotentialincreaseinoilandgasproductionincome

ParaffinTreatment:IncreasesRevenue

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þPotentiallyqualifyforEnhancedProductiontaxbreaksorcredits

GREATERINCO

ME

þPreservedeeprightsbykeepingmarginalwellsinproduction

• SuppressesSRBsandotheracidproducingbacteriaintheequipmentandformation

• AttacksthebiofilmsproducedbytheSRBsthatpromotecorrosion

• Forwells,atwosteptreatmenteliminatesSRBsandincreasesproduction

- Phase1:DecreasepopulationofSRBs(allvarietiesofgrampositive,gramnegativeandarchaea)withmicrobialcocktail

- Phase2:Treatwithafavorablemicro-organismthatisknowntooutcompeteSRBsoncetheSRBpopulationislow.

• Fornon-wellcontrol,sequestersH2Sandmercaptans sothattheyprecipitateoutassalts

• HSEfriendly

• Cost-effectiveduetoaccompanyingincreasedproductionratesAdvantages

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InnovativeSolutionForH2SControlWithEnhancedProduction

Mechanism

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FutureApplications– AllHSEFriendly

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Application Description Applicable markets

Viscosityreduction

Reduceviscositytodecreasetheextractionandtransportationcostsofcrudeandprocessedoils

• E&P operators,• Midstream(pipelines)

Asphaltenedispersal

Disperseprecipitatedasphaltenes andresinstohelprestoreformationsorreducemaintenanceandpartsreplacementcosts(dependinguponlocationofuse)

• E&P(includingoffshore)• Midstream(pipelines, tankers,

tanks,rail,trucks)• Downstream(refineries)

RemediatingPLAanddissolvablepackers

RemovesPLAfrac ballsanddissolvablepackersmuchmorequickly- inhoursratherthandaysandatawiderangeoftemperatures

• E&P

Sludgeremoval Eliminateparaffinicsludgewithoutheatingandwithreducedmechanicalenergy

• Midstream(pipelines, tankers,tanks,rail,trucks)

Thankyouforyourattention!

Locusbioenergy.com