FOSSIL FUEL PRODUCED WATER: ASSET OR WASTE?

1. FOSSIL FUEL PRODUCED WATER:
ASSET OR WASTE?
JUNE 24-25, 2013
MITCH BURROUGHS, PRESIDENT & DIRECTOR

2. © ARMADA WATER | Page
In 2010 the US produced between 7 – 10 barrels (bbl's) of associated production water with each
barrel of oil produced.
The water oil ratio is expected to dramatically increase due to:
Advances in drilling techniques
Development of unconventional hydrocarbon plays that need fracking to be able to produce
Maturing of Oil and Gas fields
In 2010 the US produced 21 billion barrels of associated production water which required treatment
and/or disposal.
Recent advances in fracking efficiency have energized the onshore US market.
Fracking requires a large amount of water per well, on average more than 150,000 bbl’s per frack job.
More than 15,000 wells were fracked in 2010 resulting in a water usage of more than 2.2 billion
barrels.
On average each well produces 40%“flow-back frack water”that needs treatment and/or disposal.
Source: DOE and US EIA 2009 & 2010 reports and industry knowledge
Produced Water : Waste or Asset ?
There’s a lot of it about …and more coming

3. © ARMADA WATER | Page
Produced Water : Waste or Asset ?
A matter of perspective & balance
Stakeholder Waste Asset
Oil & Gas Company ✔✔✔
Oilfield Services Company ✔✔ ✔
Environmental Company ✔✔✔
Trucking Company ✔✔ ✔
Water Treatment Company ✔ ✔✔
Disposal Company ✔✔ ✔

4. © ARMADA WATER | Page
Produced Water: Waste or Asset?
Current models focus on waste
Haulage & Transport companies feel threatened
Disposal well companies have no incentive to convert to treatment … where’s the
ROI?
Companies selling fresh water have no incentive to convert to treatment
Long legislative processes to get permits
Liability inconsistencies across states
Risk concerns for the oil & gas company, what will I do with my production water if
the treatment plant doesn’t function according to plan?
Treatment cost vs market price . Finding the right balance
Driving the change from waste to asset requires an integrated
service approach to economically re-purpose produced water in
an efficient and effective manner

5. © ARMADA WATER | Page
A water-cycle solutions focus
Restore the balance in the water cycle
Produced Water
Drilling/Fracking/
Production Process
• Recycles water for perpetual use
• Converts produced water into an asset
• Integrated solution that reduces costs while
monetizing waste streams to suit local needs.
Armada’s
Disposal Wells
< 10%
Disposal
Armada’s
Treatment Train
Clean Water
Armada’s
Transport & Logistics

6. © ARMADA WATER | Page
What sort of integrated approach?
Transportation
Polyline Deployment
Pit Lining
Pad Remediation
Contracting Services
Well Pressure Testing
Water Trucks
Pneumatic Trucks
Poly Pipe Trucks
Backhoe
Roustabout Trucks
Logistics Sales Treatment Disposal
Liquid Waste Water
2* Class-II disposal wells in Utah
2* SWD wells in Permian Basin
Production Water
Brackish Water
FrackFlowback Water
Production Water Treatment
facility in Utah,
Production Water treatment
facility in Permian basin
Fresh Water Sales
Fresh Water facility Barstow, W-
Texas
Fresh Water facility DJ Basin,
Colorado
ServicesAssets

7. © ARMADA WATER | Page
Unique approach in that technology components will be adapted to treat various types of water.
A project pilot study will define final treatment train configuration
Propriety Treatment Train will consist of four modules;
Module-1 Module-2 Module-3 Module-4
Oil Water Separator
Aeration
Walnut Shell filter
VOC removal
Oil
Paraffin
Asphaltines
Electro Coagulation
Electro Precipitation
Chemical Precipitation
Metals
Gels
Bacteria
Ceramic Filters
Carbon Filter
Solids
Heavy Metals
Rare Minerals
Chlorine removal
Reverse Osmosis
Micro Filter
Desalting
Dissolved Organic
Na removal
REMOVALUNIT
Armada Treatment Train System

8. © ARMADA WATER | Page
Replace disposal wells and evaporation pits with their associated risks and regulatory challenges.
Convert production water into an incremental fresh water source at an up to 90% yield.
Reduce water disposal costs by up to 60%.
Reduce trucking costs and carbon emissions
Allow energy companies to easily and affordably recycle their produced water. (Disposal & Re-use)
Modular plant designs allow for small foot-print and in-place scalability
Armada converts a waste stream into an asset stream
Armada applies proven technology in innovative ways
Armada builds business models to ensure win-win client-company relationship
Armada’s integrated systems are scalable at commercial levels
Armada’s Strategic Advantage

9. THANK YOU