JSMeyerEngineering,PC7/21/20151OilandGasFrack,Produced,FlowbackWaterProcessingTechnologyWhyarewehere?7/21/20152ToinformtheEPAthatthistechnologyexists.Regulationsarebeingformedandthoughtitbesttocommunicateourtechnologyinatimelyfashion.Webelieveitcanhaveamajorpositiveimpactontheindustry.WellOperationOverviewFracturingFluid50,000toover10million*GallonsperwellWellDrillingWastewater2,400– 1,100,000*GallonsperwellFlowbackWater210,000– 2,100,000*Gallonsperwell*AllValuesaretypicalLongtermProducedWater200– 900*gallonsperdayperwellforlifeofwell7/21/20154Updated7/1/2015EPA821R15003,March2015,TechnicalDevelopmentDocumentforProposedEffluentLimitationsGuidelinesandStandardsforOilandGasExtractionNaturalGasShaleBasinsintheUShttp://www.businessinsider.com/bidpricesdoubleinpennsylvanianaturalgasauction201017/21/20155ProducedWaterMarket20billionbarrelsperyear(US)77billionbarrelsperyear(Worldwide)3.2trilliongallonsofwaterperyearrequiringtreatment7/21/20156ExistingProposedTreatmentProcess(byothers)WellFiltrationEvaporatorDeepWellInjectionOffSiteSludgetoDisposal7/21/20157IssueswithExistingProposedTreatmentProcess(byothers)FreshwaterneedsarenotreducedHighenergydemand– evaporationSignificantcapitalinvestmentEstimatedequipmentcost>$20MSignificantcost/gallonofwatertreatedEstimatedcost/gallonofwatertreated:$18.50/barrelRequirescentralizedplantEvaporatorDeepwellinjectionNoreductionintrucktraffic!Requirementoftransportingwastewaterisnotalleviated7/21/20158OptimalTreatmentProcessProducedwatertreatedtoEPAdrinkingstandardwithexceptiontodissolvedsaltlevelsWellDirtyWaterFeedInitialFiltrationChemicalSofteningThickenerChemicalSofteningChemicalSofteningFiltrationNeutralizationSolidsDisposalUVDisinfectionSystemOrganicsRemovalSolidsDisposalNewWellMultimediaFiltration7/21/20159Ba/SrRemovalSolid/LiquidSeparationSolidsRecoveryOurResults7/21/201510UntreatedTreated DeionizedWaterWellAnalysis:Flowback/Frac(AllValuesinppmunlessotherwisestated)FlowbackWaterFracWater TreatedFracWaterDrinkingWaterStandardAluminum 0.86 0.23 ND 0.2*Arsenic ND ND ND 0.01Boron 0.15 0.31 0.179 Barium 1.76 58.65 0.007 2Beryllium ND ND ND 0.004Calcium 1750 280 0.361Cadmium ND ND ND 0.005Chromium 0.79 ND ND 0.1Copper ND ND ND 1.3Iron 3.4 13.11 ND 0.30*Potassium 337 10.16 151Magnesium 30 21.33 0.05Manganese 0.08 0.42 ND 0.05*Molybdenum 0.16 ND ND Mercury ND 0.001Sulfur 258 2.2 4 250*(sulfate)Sodium 5095 593 5020Lead ND ND ND 0.015Antimony ND ND ND 0.006Selenium ND ND ND 0.05Silicon 20.8 2.62 1.2Strontium 68.2 49.68 0.7 Zinc ND 0.21 ND 7/21/201511*SecondarydrinkingwaterstandardWellAnalysis:ProducedWater(AllValuesinppmunlessotherwisestated)Tote330 Tote756 Stage1TreatedSampleStage2TreatedSampleFinishedSampleDrinkingWaterStandardTOC <1 <1 <1Aluminum <5 <5 <0.05 <0.05 <0.25 0.2*Barium 5,560 5,440 4.83 3.1 0.561 2Boron 13.2 13 1.78 1.29 0.873 Calcium 44,000 43,100 24.1 17.4 5.74Iron 181 180 <0.02 <0.02 <0.1 0.30*Lithium 237 232 55 50.4 1.24Magnesium 2,860 2,770 8.72 7.77 0.558Manganese 36 34 0.092 0.0117 0.022 0.05*Potassium 1,170 1,150 414 1,050 760Sodium 36,700 38,200 34,600 36,200Strontium 15,300 15,000 47.3 36.6 3.32 Sulfur 1.5 <5 3.02 3.14 13.3 250*(sulfate)7/21/201512*SecondarydrinkingwaterstandardMobileTreatmentFacility7/21/201513OptimalTreatmentProcessAnalysisAllinorganicswerereducedtolevelsthatcomplywiththeEPAdrinkingwaterstandardRadioactivityAlpharadionuclideswereremovedinthechemicaltreatment,however,only60%ofbetaradionuclideswereremovedinthefirststep.Aprovenadditionalstepwillbeusedtoremovebetaradionuclidestoacceptablelevels.Additionaltestsmustbeconductedtoconfirmthis.7/21/201514CompetitiveAnalysisElectroCoagulation(Halliburton)DistillationCarbonAbsorptionJSMProcess7/21/201515ElectroCoagulation(Halliburton)Useselectricitytocoagulatecolloidalmaterials.GenerateslimitedCL2andbaseforprecipitationofdivalentmetals.Leavesdissolvedsolidsinthematerialandrequiresconcentrationpriortodeepwellinjection.Adv – >1ststagetreatmentoffrac waterissuitablefor5Xrecycle.Con >Needlargeamountofpoweratwellsite>Transportationanddeepwellinjectionoftheresultingbrine>Chlorineformationatppmlevels>HydroxideformationwhicharedifficulttofilterCost– Electricity$2.00Transportation $10.50DeepWellInjection$3.00Subtotal $15.50Waterrecycle $+2.00Saltrecovery $+1.40TotalCost/BBL $12.107/21/201516Distillation(MVR)Shipsproducttofixedplantforevaporation.Waterproductisshippedbacktowellfieldreuse.Breakevenwithpurchaseoffreshwater.Deepwellinjectionrequiredforwastebrine.Con >Needtransportationofallmaterialoffwellsite>Doesnotprovideforrecycleatwellsite>ExtendedtransportationforwaterreturnCost– Evaporation $3.00Transportation $10.50Waterreturn $2.00Deepwellinjection $3.00Subtotal $18.50Waterrecycle $+4.00SaltRecovery $+1.40TotalCost/BBL $13.107/21/201517CarbonAbsorption(Lewis)Usescarbonbedtoabsorb50%ofmetalions.Remainingwaterandionsgotodistillationfollowedbydeepwillinjection.Deepwellinjectionisreducedby50%.Con >Producestwowastestreams>Takeslargenumberofbedstoremovemetalions(capitalcosts)>Needtransportationofsomematerialoffwellsite>Limitedsuccessonhighconcentrationproducedwater>ExtendedtransportationforwaterreturnCost– Deepwellinjection $1.50Operationalcosts $10.50Transportation $3.00Subtotal $15.001.Waterrecycle $+2.00Saltrecovery $+1.40TotalCost/BBL $11.607/21/201518JSMTechnologyUsesmanganate iontoformanactivatedmanganesecompoundwhichreducestheconcentrationofthemetalionsuponprecipitationwithcarbonate.Adv >Reducesmetalionconcentrationstodrinkingwaterstandard.>Eliminatesdeepwellinjection>Recovershighconcentrationmetalions>Notransportationcosts.>Minimizessolidmaterialdisposalcosts>RecyclesofwateratwellsiteCon >NoneCost– Operationalcosts $5.50Subtotal $5.50Waterrecycle $+2.00SaltRecovery $+1.40TotalCost/BBL $+2.107/21/201519BariumandStrontiumRecoveryBariumRemovalStepBariumSolidsBarium– 83%Strontium– 13%Calcium– 4%StrontiumRemovalStepStrontiumSolidsStrontium– 80%Calcium– 13%Barium– 7%ValueofSolids~$1.00/barrelofwatertreated7/21/201520SummaryCatalyticPrecipitation Distallation/MVRCarbonAbosrptionElectroCoagulationWaterRecycleatSite YES NO NO LIMITEDMetalRecoveryYES NO NO NOSaltRecovery YES YES YES YESDeepWellInjection NO YES YES YESCost$2.10/BBL $13.10/BBL $11.60 $12.107/21/201521TechnologiesNotEvaluated(notsuitableforProducedWater)ElectroDialysis– LimitedtolowTDSmaterialFoulingResistantMembranes– DivalentionscausefoulingUltraFiltration–RemovessolidsonlyReverseOsmosis– LimitedtolowTDSmaterial(limiteduseforStep1FRACwater)7/21/201522ConclusionJSMProcessEliminatesdeepwelldisposalReducesfreshwaterusageFurtherenablesrecyclingLowcapitalcostLowcost/gallonofwatertreatedEnvironmentallyfriendly7/21/201523