LNG and CNG CO2 and N2 Transportation and Logistics

Roadmap to Building a Natural Gas Fueling Network

Philip Fusacchia GE Oil & Gas Program Manager – Last Mile Fueling

North Dakota Natural Gas Network

On-Road Trucking Demand (1,000,000 DGE/Day)

Drilling & Completion Demand (200,000 DGE/Day)

Flare Gas Supply (250,000 DGE/Day)

1 – Equivalent volumes from existing NGL stripping units > 1000 mcfd 2 – Based on 74 rigs and 12 frac fleets active in basin

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2

CNG Partnership-Last MileTM

Fueling Solution 50/50 Joint Venture-Operated by Ferus

Reliable, fully-integrated natural gas fueling solution for E&P and other high horsepower industries

Natural gas expertise and solutions, capital and commercial investment

Energy services, expertise in supply and delivery of off-road cryogenic and gas products (CNG/LNG)

Ferus in North Dakota

Williston Base

Flare gas capture

Contracted CNG fueling

Planned Flare Gas Capture

Ferus Hess CNG Station

50,630 DGE/day CNG capacity by 4Q15 Pipeline Outage Service

Total Gas Captured:

400,000 Mcf

Base Opened: October 2014

Operational: October 2015

20,000 DGE/Day Capacity

Last Mile™ Flare to Fueling Turnkey gas capture service (Example)

• 1-2 MMSCFD • 3 – 12 month

period

• >1500 1150 BTU • 500-1,100 MCFD

available for CNG • 2-4 GPM NGL’s

• Rig & frac fuel • Gas lift primer • 3rd party sales • Pipeline Outage

• NGL storage & transport

• Locally marketed product

Eliminated

NGL

CNG

Sales Gas

2 3 Gas Supply 1 Gas Treatment Gas Transport

Last Mile Flare to Fueling Emission Benefits

-

20,000

40,000

60,000

80,000

100,000

GHG (CO2)

Tons

/Yea

r

CO2 Emissions

-

5,000

10,000

15,000

20,000

Smog (O3)

Tons

/Yea

r

Smog Emissions

-

1

2

3

4

5

Respiratory (PM2.5)

Tons

/Yea

r

Particulate Matter

55% reduction

98% reduction 97% reduction

The Last Mile approach to flare gas mitigation captures nearly all of the natural gas and natural gas liquids (NGLs), and uses that natural gas to displace diesel in end-use applications, resulting in significant incremental emissions reductions compared to NGL stripping alone.

Case Study

Flare gas capture site handles 2mmscfd, 30% of volume becomes NGL, 5% of volume powers system, 65% of volume becomes fuel or flared (Comparison includes emissions for the equivalent fuel for 10 rigs or 2 frac fleets)

NGL stripping only & diesel for fuel

NGL stripping & natural gas for fuel

ND Natural Gas Fueling Potential

3,012 1,760

1,016

Current Upstream

11,144

10,560

2,031

Upstream Fully Converted 11,144

10,560

2,031

6,625

Upstream Converted & On-Road Trucking (Estimate 2020)

Rigs

Frac Spreads

Water Heaters

On-Road Trucking

5,788 mcf/day (or 8,905 mcf raw gas)

24,074 mcf/day (or 37,036 mcf raw gas)

30,360 mcf/day (or 46,707 mcf raw gas)

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1 – currently 20 rigs & 2 frac fleets utilizing existing dual fuel engine tech in basin 2 – assumes 74 rigs & 12 frac fleets “ 3 – assumes 74 rigs & 12 frac fleets “ and 5% of daily state diesel over the road diesel sales converted to natural gas fuel

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Barrier: Nat. Gas fuel economics challenged

• 20-40% savings required for NG conversion kit payback to rig and frac

• Almost all of 2015 would not have met investment criteria savings for operator or service company

• Only 33% of rigs in basin are equipped to use NG fuel (all converted w/ >$1 savings to diesel)

Scenario – Current diesel pricing not allowing return on investment of nat gas conversion

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Minot, ND – Diesel “Rack Avg” Price + Delivery & Taxes

Last Mile – Power as a Service

9

Rig Setup 1 Waukesha + 2 Diesel

Offering Overview

To Supply

Concept

Full service engine and fuel delivery at

one $/DGE price

CNG or Field Gas

Outcome

Reduced OPEX

Reduced diesel consumption

Reduced emissions profile

Reduced reliance on D.F. kits

• NG Genset supply and integration • Genset maintenance • Technical Expertise • ~60+ dedicated NG engines powering

NAM rigs

To Supply

• End to end operations management • Fuel delivery – CNG or Field Gas • Logistics support • Remote equipment monitoring

Pilot (Oct. ‘15)

Benefits: No Operator CAPEX

Reduced emissions profile Fuel savings up to $250,000/year

Powerblock | Service overview Powerblock proposal

Value proposition Potential hurdles

Value of producing oil faster

Capex vs. Opex for capitalizing grid infrastructure

Stranded gas utilization

Emissions regulations

Uninterrupted power and uptime benefit

o Investment/availability for electricity driven equipment

o Deployment time of micro grid infrastructure

o Energy source for micro grid … Co-Op constraints

o Initial down payment for micro grid development

o Regulated vs. de-regulated markets

o Keeping pace with O&G development

• Provide power for wing to wing oilfield services … drilling, completion, and production

• Micro grid solution … Rapid deployment and mobility

• Leverage natural gas supply service, powergen equipment, and smart grid controls to provide Powerblock solution