Heavy Oil Info
Heavy Oil Info
Corporate Presentation
June 2013
Disclaimer
Confidential Business Summary
THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO
BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATIONS IN SUCH JURISDICTION.
The Confidential Business Summary is being supplied to you solely for your information. No reliance may be
placed for any purposes whatsoever on the information contained in this document or on its completeness. No
representation or warranty, express or implied, is given by or on behalf of Fractal Systems Inc. (Fractal) as to the
accuracy or completeness of the information or opinions contained in the attached document.
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any
offer to purchase or subscribe for, any securities, nor shall any part of it nor the fact of its distribution form part of
or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a
recommendation regarding the securities of Fractal.
Information for U.S. Residents
This document is confidential and has been prepared and submitted for use in the United States solely in
connection with the consideration of the possible investment by a limited group of sophisticated United States
accredited investors. The use of this document for any other purpose is not authorized and this document may
not be reproduced, transferred to any other person or used without the consent of Fractal.
The contents of this document should not be considered to constitute legal or tax advice and each prospective
investor should consult with its own legal counsel and advisers as to all matters concerning an possible
investment in Fractal. Each investor must rely on its own evaluation of the investment, including the merits and
risks involved, in making an investment decision. An offer will only be made when a purchaser properly completes
and executes a subscription agreement.
Investment highlights
Fractal Systems Inc.
Received product patent in May 2011 and process patent in January 2012
Completed feasibility study on large capacity, commercial plant for SAGD
with multi-national producer in 2012
5
Excerpt from Alberta Oil Sands Presentation
July 2011
purchased
@ C5+ price
plus tariff
added to
Bitumen/
Heavy oil
DilBit -
sold
@ blend price
less tariff
- produced
Bitumen & Heavy Oils are dense (<12 API) and highly viscous
(100,000+ cSt) requiring significant diluent to meet transportation
quality specifications; often as much as 30% blend ratio
Netback to the producer for their bitumen/heavy oil is highly volatile
*
Diluent is a light hydrocarbon (typically a natural gas liquid or condensate C5+) that is used to
dilute the heavy oil in order to improve its transportation characteristics (lower viscosity)
6
1200
With JetShear
20.5
20
1000
19.5
~91%
reduction
800
cSt
600
~2.5 API
increase
19
18.5
18
400
17.5
200
Pipeline 17
Specifications
16.5
16
Viscosity
API Gravity
density (inverse)
Upstream
truckers
blending terminal
blending terminal
JetShear
application
Downstream
Pipeline Key
Bitumen/HO
Diluent
Upgraded oil
refinery
Integrated
producer/upgrader
integrated upgrader
Fort
McMurray
10 API
8-9 API
Peace River
Oil Sands Region
Cold Lake
Oil Sands Region
10 API
Conventional Heavy Oil (cold)
Edmonton
Hardisty
12+ API
Lloydminster/Provost
Heavy Oil Region
Enbridge Forecast
July 2011
Supplied from
Canadian natural
gas industry
10
Air
Fuel
Heat
Recovery
Jet Nozzle
Assembly
Densitometer
Diluent
Transfer Pump
Diluent Pump
Viscometer
to Pipeline
Filter
Heavy Oil
Transfer Pump
Cooler
Flowmeter
Temperature
11
12
Commercializing JetShear
Demonstrating progress
300 bopd Pilot Facility
Successfully validated
lab results (Aug 09);
processed bitumen
blend (May-June 10)
1,000 bopd
Commercial Demo
Operations during
1H 2012
Completed
preliminary
designs
100,000
Typical
commercial
opportunities
Feasibility
Study
1,000
100
Time
10,000
10
13
7 barrels
Produce
Bitumen or
Heavy Oil
7 barrels
3 barrels
10 barrels
Purchase
Diluent
@ C5+ price
plus tariff
Sell
DilBit
@ LLB price
less tariff
1.5 barrels
8.5 barrels
Dilbit = $60.00/bbl1; Diluent = $80.00/bbl2; Dilbit tariff = $2.00/bbl; Diluent tariff = $1.00/bbl;
JetShear opex = $0.80/bbl
= $ 4.29/bbl
= $ 0.64/bbl
= ($0.80/bbl)
= $ 4.13/bbl
14
Summary
Improving viscosity
Improving density
Scalable, cost-effective
Appendix
16
JetShear process
Conventional Blend
Heavy Oil
* Solvation
* Temperature - facilitates molecular mobility
* Cavitation - liberates kinetic energy to chemical energy
* Near sonic velocities
* High shear forces
17
Filing countries:
Canada and USA
National Filings
Brazil, Ecuador, Colombia, Mexico, EU, Oman, China
PCT application