Changing the Way Clients Produce Energy This Corporate Presenta,on - PowerPoint PPT Presentation

Investor Presenta,on DECEMBER 2016 TSXV: DVG Changing the Way Clients Produce Energy

This Corporate Presenta,on contains certain forward ‑ looking statements and forward ‑ looking informa,on (collec,vely referred to herein as “ forward ‑ looking statements ”) within the meaning of applicable securi,es laws. All statements other than statements of present or historical fact are forward ‑ looking statements. Forward ‑ looking informa,on is oRen, but not always, iden,fied by the use of words such as “could”, “should”, “can”, “an,cipate”, “expect”, “believe”, “will”, “may”, “projected”, “sustain”, “con,nues”, “strategy”, “poten,al”, “projects”, “grow”, “take advantage”, “es,mate”, “well posi,oned” or similar words sugges,ng future outcomes. In par,cular, this Corporate Presenta,on contains forward ‑ looking statements rela,ng to future opportuni,es, business strategies and compe,,ve advantages. The forward ‑ looking statements regarding the Company are based on certain key expecta,ons and assump,ons of the Company concerning an,cipated financial performance, business prospects, strategies, the sufficiency of budgeted capital expenditures in carrying out planned ac,vi,es, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, all of which are subject to change based on market condi,ons and poten,al ,ming delays. Although management of the Company consider these assump,ons to be reasonable based on informa,on currently available to them, they may prove to be incorrect. By their very nature, forward ‑ looking statements involve inherent risks and uncertain,es (both general and specific) and risks that forward ‑ looking statements will not be achieved. Undue reliance should not be placed on forward ‑ looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objec,ves, expecta,ons and an,cipa,ons, es,mates and inten,ons expressed in the forward ‑ looking statements, including among other things: inability to meet current and future obliga,ons; inability to implement the Company’s business strategy effec,vely in Canada, Mexico and the United States; inability of the Company to con,nue meet the lis,ng requirements of the TSX Venture Exchange; general economic and market factors, including business compe,,on, changes in government regula,ons; access to capital markets; interest and currency exchange rates; technological developments; general poli,cal and social uncertain,es; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legisla,on; ,ming and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. Readers are cau,oned that the foregoing list is not exhaus,ve. The forward ‑ looking statements contained herein are expressly qualified in their en,rety by this cau,onary statement. The forward ‑ looking statements included in this Corporate Presenta,on are made as of the date of this Corporate Presenta,on and the Company does not undertake and is not obligated to publicly update such forward ‑ looking statements to reflect new informa,on, subsequent events or otherwise unless so required by applicable securi,es laws. 2

“Changing the way clients produce energy” 10 0 1 Recordable Safety # ESP Supplier* Incidents YTD Years in business 8 . 0 33 % Employees Insider Owned 13.2% Fully Diluted TSXV: DVG $18.6MM $0.13 - $0.30 98.3MM 52 week range Market cap as at Dec 1 ‘16 Shares outstanding 3 *Gille_e, WY - Powder River Basin gas wells; based on internal es,mates

VISION A leading supplier of submersible pumping products that reduce costs, energy consumpOon, and carbon footprint. OPPORTUNITY Emerging Technology Offers Upside through InnovaOon ü Linear Electromagne,c Submersible Pump (the “Linear Pump”) is a revolu,onary concept for ar,ficial liR that is disrup,ve to exis,ng technology. ü Opportunity for producers to reduce capital and opera,ng costs compared with tradi,onal liR systems (i.e. pump jacks) ü Agreement in place with large oil company to advance commercializa,on Sizeable and Expanding Market for the Linear Pump ü All North American oil wells will need ar,ficial liR products ü Global ar,ficial liR market expected to exceed $17B by 2019 ExisOng ArOficial Li\ Business Generates Cash Flow ü Exis,ng submersible pump opera,on based in Wyoming con,nues to grow and achieve record ac,vity levels 4

Direc,onally drilled and horizontal wells have created new challenges: • Bends in the well create points of contact between the rod string and the produc,on tubing; • Rod string suffers excessive wear as it cycles up and down 3 million ,mes per year, leading to eventual failure of the rods and occasionally the produc,on tubing; • Limited advancements in pumping technology are crea,ng rising costs to produce oil. CriAcal points of contact in oil wells that result in excessive wear and eventual failure of rod strings. 5

The Linear Pump is undergoing final tesAng in a client well in • Permanent magnet motor technology Saskatchewan & is approaching commercializaAon • Reciproca,ng pump (similar to rod pumps) • Suitable for ver,cal, deviated & horizontal oil wells • Disrup,ve technology - an alterna,ve to conven,onal pump jack installa,ons Ar6ficial Li9 Solu6ons • Conven,onal pump technology Also called screw or Moineau pumps • • Rota,ng pump with mul,ple impellers Heavy oil, high sand produc,on, gassy wells • • Pumps moderate to high volumes of fluids Deployed as a submersible pump system • Eliminates surface motors & costly rod string wear • Our ESP and progressive cavity pump business in GillePe Wyoming generates posiAve cash flow and helps support conAnued development of our 2 nd generaAon Linear Pump. 6

The Linear Pump: ü Is powered by a high efficiency electromagne,c motor ü Uses a modified industry-standard rod pump 92% ü Has no external moving parts ü Is ideal for oil wells to 2000m depth and rates to Linear Pump efficiency with lower power draw 42 m3/d (6500’ and 265 bbl/d) ü Can be set horizontal, slant, or ver,cal ü Recent run ,mes have shown up to 92% pump efficiency vs. 80% in tradi,onal rod pumps while only consuming an average of 18 amps of electricity 7

The Linear Pump effecOvely: ü Eliminates surface li\ing equipment (pump jack) Smaller footprint means reduced construc,on costs, and reduced impact on the environment, farming and ranching. ü Eliminates sucker rods Worn and broken sucker rods can cost clients up to $153,000 (2) annually to maintain, including the oil not being produced during failures. ü Eliminates leaking wellheads Wellheads typically leak oil at the “stuffing box” (the seal around the sucker rod). This is a chronic environmental issue with pump jack opera,ons. ü Efficient & easy to install (2) Footnotes included in Appendix as endnotes 8

• Low cost opera,ons, a_rac,ve margins, and ability to quickly scale-up • Simple installa,on in the field & limited maintenance required for producers • Compelling in oil price downturn - lower cost installa,on and maintenance compared to pump jacks • Divergent’s management team has hands-on experience building companies and genera,ng value for owners; supported by strong and commi_ed board Ini6al Target Markets in North America 7,500* Viking, Cardium, candidate wells iden,fied Slave Point Bakken, Viking, Shaunavon, in Canada Spearfish 9,500* Uinta Basin Niobrara, Powder River Basin candidate wells iden,fied in United States Poza Rica *based on narrow search criteria in small geographic regions; further research and product results will define the full market.

Pump Lands in SK ü à Results of Linear Pump Staging Yard performance Debenture ü ü Pump Installed à Con,nue expanding Resolu,on opera,ons in Wyoming and 2015 - 2016 poten,al introduc,on of the ü Pump Results Pump in Powder River Basin à Con,nued business Pump Tes,ng by Addi,onal Clients development to operators in other oil fields Commercializa,on & Ramp Up à Agreements with addi,onal new operators to install and Pump Orders Increase test the Pump Client Base Expansion à Expansion of Pump inventory based on increased client demand à Clear line of sight to profitability 2017 & Beyond 10

Divergent’s Wyoming Ar,ficial LiR Opera,on is… ü Cash flow posiOve ü Increasing revenue - 233% increase in Q3 2016 vs. Q3 2015 ü Semng record acOvity levels - August 2016 peak ac,vity $4,500,000 $4,000,000 $3,500,000 Quarterly Revenue (USD) $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ($500,000) Revenue Gross Profit 11

Par,cipa,on in the upside of a high-tech growth OPPORTUNITY story offering improved environmental impacts and supported by a growing, cash-flow posi,ve division All North American oil wells will need ar,ficial liR SIZEABLE Sizeable & growing target market MARKET Applica,ons in other basins & plays globally EXISTING Growing ESP business that generates posi,ve cash flow with track record of increasing revenue BUSINESS Near term geographic expansion poten,al 12

Appendices