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R3 Fusion Inc 405 Jordan rd, Troy, NY-12180 CONFIDENTIAL Ph: (518)-894-8079, Fax: (518)-205-0134

R3 Fusion: Treating Frac water at the well site

Introduction

Natural gas wells require large volumes of fresh water to stimulate production (know as hydraulic fracking). It is estimated that the oil and gas industry produces 15-‐20 billion bbl/year of produced water, which requires treatment. In Barnett shale an average of 100,000 bbl of fresh water is used to fracture a single well. Freshwater, which is used for fracturing, while underground dissolves a range of contaminants and a number of chemical additives making the flow back water (discharged water after hydraulic fracking process) unsuitable for environmental discharge.

This produced water contains, amongst other contaminates, high levels of dissolved solids characterized by the term TDS (total dissolved solids). For low levels of TDS (5000-‐20,000 mg/L) conventional membrane technology is adequate. When the TDS value increases to 30,000 mg/l the RO/membrane technology is faced with considerable operating and maintenance challenges. It is well established that the distillation / evaporation process (thermal process) has the ability to cope with water containing very high levels of TDS (50,000 – 100,000 mg/l) and produce clean water. However conventional distillation systems operate at low thermal efficiencies (often around 60-‐65%) and are associated with very high Capex and footprint. In recent years mechanical vapor recompression technique has been used to improve the thermal efficiency of conventional evaporator processes. This approach does not seek to improve the inherent thermal as well as mechanical design of the evaporator/distillation system in order to enhance the hydrodynamics and hence the actual transport process, which governs the formation, and condensation of water vapors generated from produced water.

SPaCeR Technology

R3 Fusion’s addresses the issues at the core of the evaporation process such hydraulic path length, heat transfer and mass transfer rates and combines the concepts of compact heat exchanger technology to deliver an energy efficient, reliable and mobile frac water treatment plant. It has developed a mobile system for the treatment and reuse of frac water by using its patent pending SPaCeR technology. The 1 bbl per minute system is housed in a self contained 40 ft x 8 ft x 10 ft container and is ideal for on-‐site processing. It is compact, energy efficient and extremely mobile. It’s modular design is particularly attractive for capacity addition. This technology has been developed through years of research in the field of intensified heat and mass transfer. Our goal is to reduce environmental impact of gas drilling by offering a technology, which reduces on-‐site treatment cost.



Pictorial results of the trials conducted on frac water processing can be seen in Figure 1, and a schematic of the modules currently being manufactured can be seen in Figures 2 and 3. We utilize an energy efficient evaporation / distillation technology which operates with a low temperature differential resulting in minimal scaling and high thermal efficiency. Since distillation removes metals and has 90-‐98% removal efficiency for nutrients (nitrogen, nitrates, phosphates etc), we expect our process modules to be capable of removing them from frac water. However this process will not remove any dissolved organics, which can be stripped by contacting the water with air in our proprietary thin film gas-‐liquid (low pressure drop) contacting module. In addition, we have been very successful in the removal of chlorides (water with high TDS – 80,000 to 100,000 mg/L) during our desalination pilot studies. In summary R3 Fusion’s proprietary systems can perform the following tasks based on the data sheet provided:

• Reduction of TDS (particularly suitable for High TDS (100,000 mg/L) • Removal of Ammonia • Reduction of Nitrates • Reduction of Nutrients in general • Removal of metals

Salient features

In summary the following is a list of key features of our SPaCeR Technology for frac water processing:

• On site processing • Energy efficient-‐ results in cost savings • Small foot print; containerized for easy relocation • Modular systems to scale with process demand • Elimination / Reduction of transportation cost • Reliable operation, nearly maintenance free

About R3 Fusion

R3 Fusion is a company dedicated to the development and commercial deployment of energy efficient processes addressing significant challenges in the water, biofuels, energy, and environmental markets. These patented approaches to water purification, biofuel synthesis, green chemical synthesis, micro-‐desalination, and a wide range of related applications Work. R3 Fusion’s patent pending SPaCeR technology utilizes waste process heat and exceptional engineering design to achieve a highly cost effective means to carry out a wide range of fluid processing in an environmentally friendly manner.



Its proprietary process intensification tools have the potential to deliver energy efficient processing in a variety of sectors.

• Enhanced UV water treatment • Microwave coupled micro desalination • Microwave reactor for synthesis of high value chemicals • Continuous bio diesel process technology • Mobile solar waster water and desalination process • Frac water processing • Removal of dissolved organics • Production of nano particles

Figure1: Clean water recovered from Frac water



Figure2: Schematic view of the SPaCeR module

Figure3: Containerized Modules for Plug & Play concept

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