CORPORATE PRESENTATION APRIL 2018 Helping Change the Way Clients Produce Energy
Forward Looking Statements Some matters discussed in this presentation may contain forward-looking statements, including, without limitation, future installations of the Linear Pump, 2018 industry sentiment for ESP operations and discussions regarding the renewal of an exclusivity agreement. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Corporation's disclosure documents on the SEDAR website at www.sedar.com. Forward-looking statements are based on estimates and opinions of management of the Corporation at the time the information is presented. The Corporation may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but the Corporation undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws. Non-GAAP Measures: Certain supplementary measures in this presentation do not have any standardized meaning as prescribed under IFRS and, therefore, are considered non-GAAP measures. These measures are described and presented in order to provide information regarding the Corporation’s financial results, liquidity and its ability to generate funds to finance its operations. These measures should not be used as an alternative to IFRS measures because they may not be consistent with calculations of other companies. These non-GAAP measures, and certain operational definitions used by the Corporation, are further explained in the Corporation's MD&A for the year ended December 31, 2016 and in the MD&A of our most recent interim financial statements. 2
Business Overview P OSITIONING THE C OMPANY FOR S UCCESS Changing the way Clients Produce Energy Established Platform 2014 – secure exclusivity to the Linear Pump (1) IP. Where we have 2015 – streamline corporate focus to artificial lift. been 2016 – enter strategic supply chain agreement to reduce inventory burden. 2016 – rapid growth of CBM ESP sales in Wyoming. Recognize Market Potential 2017 – entered OIL ESP market and established reputation. Where 2017 – acquired state of the art pump testing equipment. we are now 2017 – Linear Pump testing achieves record run time. 2017 – signed 3 year exclusive contract with large Wyoming client. Capitalize on Markets and Technology 2018 – aggressive growth plans for conventional ESP products. Where we 2018 – extending run-time with the Linear Pump. are going 2018 and beyond: expand product offerings through new and emerging technologies in artificial lift. 3
Improved Performance P LATFORM FOR S UCCESS Reliable. Repeatable. Quality. Q4 2017 Results from Operating Activities: • Gross Profit increased 94% . • G&A decreased 31%. • Expected decline in revenues as part of a strategic multi-year contract focused on profitability rather than top-line sales. YE 2017 Results from Operating Activities: • Gross Profit increased 17% . • Decline in revenues offset by increased margins. $25,000 $20,000 (USD ,000's) $15,000 Anticipated $10,000 revenue decline with $5,000 increased gross profits $0 2013 2014 2015 2016 2017 Revenue Gross Profit 4
Focus on Existing Business P LATFORM FOR S UCCESS Positioned to capitalize on growth opportunities YE 2017 successes … ü Entered a 3-year preferred services agreement with the largest operator in the Powder River Basin. Coal Bed Methane (CBM) Wells. § Gillette Stable source of revenue from a § mature basin with many years of production remaining. ü Growing revenues from oil producing clients in Wyoming basins. ü Near term revenues from oil producing clients in Colorado basins. ü Existing contracts generate sufficient cash flow to support the Corporation. 5
Upside of Existing Business P LATFORM FOR S UCCESS Positioned to capitalize on growth opportunities 2018 outlook on OIL ESP markets … ü Increasing demand from clients. ü Consolidation within competitors reducing service options. ü US oil production expected to account for 80% of the increased global demand for oil over the next 5 years. ü Ideal market conditions for expansion. 6
Upside of Emerging Technology T HE P ROBLEM Legacy technologies can’t keep pace with how wells are drilled today Directionally drilled and horizontal wells have created new challenges: • Bends in the well create points of contact between the rod string and the production tubing; • Rod string suffers excessive wear as it cycles up and down millions of times per year, leading to eventual failure of the rods and occasionally the production tubing; • Limited advancements in pumping technology are creating rising costs to produce oil. Critical points of contact in oil wells that result in excessive wear and eventual failure of rod strings. 7
Upside of Emerging Technology T HE S OLUTION Adapt and innovate to keep pace with today’s needs Disruptive technology - an alternative to • Smaller footprint on surface • conventional pump jack installations Eliminates leaking wellheads • High efficiency electromagnetic motor • Reduces carbon footprint (3) • Modified industry standard rod pump • Reduces Electrical Power Usage (4) • Reduced Operating Costs by as much as Oil wells to 2100m depth • • $169,500 annually (2) Rates to 200 bbl/d • Increases Production Rates (5) Suitable for vertical, deviated, and • • Reduces Electrical Power Usage (4) horizontal wells • 8
Upside of Emerging Technology D EMONSTRATED P ROGRESS AND R ESULTS Moving past “proof of concept” • 4 pumps tests. 2015 • 12 days run time achieved. Prototype • Improvements to pump and motor Pump identified. 2016 • 3 pumps tests. 2 nd • 23 days run time achieved. RESULTS Generation • Improvements to pump and change to Pump installation method identified. 2017 • 1 test. 3 rd • 84 days run time achieved. Generation • Improvement to pump identified. Pump • Success of new installation method. 2018 • New installations. 4 th • Extended run times. Generation • Varied applications. EXPECTED Pump MILESTONES 2019 • Fully automated pump - self adjusting 5 th to wellbore conditions. Generation • Proven technology. Pump 9
Benefits to the Environment AND Profitability E LECTRICAL S AVINGS Economic and Environmental Benefits from High Efficiency Linear Motor - based on calculations from 2016/2017 tests 4 The 2017 testing was conducted in Saskatchewan. The following results were calculated using information from the SaskPower website* and from data collected during the test: Rate Type SaskPower Rate Pump Jack** Linear Pump Usage Charge Usage Charge Demand Charge $12.933 / kVA 23.5 kVA $304 23.5 KVA $304 Energy Charge $0.07306 / kWh 16,425 kWh $1,200 9,555 kWh $698 Total Cost per Month: $1,504 $1,002 *Source www.saskpower.com/wp-content/uploads/Service_Rates_Oil_Field_2017.pdf ** based on industry information for power needs for existing typical pump jack operations 10
Benefits to the Environment C ARBON R EDUCTION Contributing to Canada’s Reductions in Carbon Emissions - based on reducing the steel used in fabrication 3 The reduction in greenhouse gas emissions or CO2 emissions* when fabricating one Linear Pump vs one Pump Jack is equivalent to: 40,784 88.5 91,599 1,355 Barrels of oil Incandescent Miles driven Pounds of consumed lamps by an average coal burned switched to passenger LED’s vehicle 24,200 1,562 5.6 36.2 Propane Homes’ Acres of Pounds of cylinders used electricity use forests waste for home for one year sequestering recycled barbeques carbon instead of landfilled *Source www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references 11
Growth Opportunity S IZEABLE AND E XPANDING M ARKET FOR THE L INEAR P UMP The market continues to grow with each well drilled. Disruption to Traditional Rod Pump Market There are an estimated 750,000 traditional rod pumps currently in service: 600,000 in the US and 150,000 in Canada. Our Linear Pump will disrupt this market. Current Target Well Pump sizes 38mm - 57mm (1.5” - 2.25”) • Depths to 2,100m • Production up to 200 bbl/d. • Minimal sand and gas. • 139.7mm casing or larger. • 12
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