EcoShale® Technology

Elements of the EcoShale technology that have remained consistent over time:
Shale is heated in a closed container devoid of oxygen
Heat is transferred by gas convection in a rubblized bed
Pyrolysis temperature is kept below shale combustion temperature
No water is consumed in the process
Recovers almost 100% of the water in the shale
 Batch process with multiple units operating in sequence
Heat cycle is faster than in-situ and slower than traditional retorts
–Creates lighter oil than traditional retorts but heavier than in-situ

Significant improvements in methodology over time:
Indirect heat to direct heat
Full capsule heating to zone heating
Upflow heating to downflow heating
Fixed roof to floating roof
Single-use earthen capsule to reusable steel drum capsule

Generation 1: Indirect Heat
 Single-use earthen capsule – bentonite amended soil (BAS) envelope
 Indirect heat – steel pipe network and supporting inert material
 Heating from bottom up; little heat recovery
 Water use for dust control and BAS saturation

 Lower initial investment than with other oil shale processes
 High quality oil; large middle distillate cut with no fines

 Miles of disposable heating pipe with large volumes of inert material to support it
– Added risk and cost; decreased productive ore volumes
 Challenge of maintaining roof integrity with subsidence
 Engineering challenges necessitated large scale demonstration project
 Capsules require re-engineering for each unique shale/resource

Generation 2: Direct Heat
 Single-use earthen capsule – BAS and geomembrane envelope
 Direct heat (no network of heating pipes or inert supporting material)
 Upflow with zone heating (allows much better heat recovery)
 Water use for dust control and BAS saturation

Advantages Over Indirect Heat:
 Dramatically lower capsule construction cost per barrel
 Removed cost, complexity and risk of heating pipes
 Removed inert material – more productive ore per capsule
 Zone heating reduced shale heating requirement by over 50%

Disadvantages Over Indirect Heat:
 Added cost and complexity to central processing plant
 Larger upfront capital investment required

Generation 3: Floating Roof
 Single-use earthen capsule – floating roof; BAS and geomembrane seal
 Direct heat (no network of heating pipes or inert supporting material)
 Downflow with zone heating (allows heat recovery)
 Water use for dust control and BAS saturation

Advantages of Floating Roof:
 ~20% reduction in capsule construction cost
 Floating roof removes engineering challenge of “the knuckle”
– The “knuckle” is the area where the walls join the roof – experiences stress from capsule subsidence
 Downflow increases yield

Disadvantages of Downflow vs. Upflow
 Slightly heavier oil due to reduced cracking

Generation 4: Reusable Capsule
 Above ground, fixed bed retort
 Downflow zone heating
 Increased heating rate and gas flow rate
 Operates at higher pressure than earthen capsule
 Ability to collect produced water

Advantages Over Single-Use Capsule:
 No need to build demonstration project – critical elements provable with lab testing
 Dramatic reduction in technical costs and operating costs per barrel
 Increased heating rate and gas flow rate increases yield
 Increased operating pressure reduces CapEx for piping and compressors
 Single design should work on different shales
 Scalable – can start with small project and add capacity opportunistically

Evolution of EcoShale Economics

1. Based on projects in Utah. Generation 4 numbers are supported by a feasibility study. Numbers will be updated by a pre-FEED study to be completed in spring 2018
2. Modified Fischer Assey is the standard measure of the richness of oil shale

3. Capsule costs include mining, material handling, and capsule construction
4. Technical costs = CAPEX and operating costs per barrel of resource. Technical costs and IRR based on Seep Ridge, Utah resource,

Generation 4 – Today’s EcoShale at Seep Ridge, Utah (~10,000 BOPD)
– 8-11% IRR at today’s $45 – $55 WTI oil price
– Stable long term production – no decline – 50 to 60 years
– Generates free cash flow on every barrel – down to $18/bbl
– Minimal on-going capital required to keep oil flowing

Comparison of Red Leaf Technology to Other US Oil Plays

Red Leaf Seep Ridge total cost breakeven (10% IRR) of $52/bbl is competitive with most of the top oil basins in the US
Seep Ridge’s operating breakeven of $18/bbl is lower than the average shut-in prices of all of the basins shown above
Once built, projects require little maintenance capital and have no decline rate