GRIT INDUSTRIES INC. : INNOVATIVE SOLUTIONS FOR THE OIL AND GAS INDUSTRY

1. GRIT INDUSTRIES INC. :INNOVATIVE SOLUTIONSFOR THE OIL AND GAS INDUSTRY

2. Who is Grit? Private Technology, Manufacturing and Service Company with 3 Divisions • A-Fire Burners – conventional, natural drafted, flame arrested, burner systems • Cold Weather Technologies – new indirect heating process • Grit Fabricating – containment, metals fabrication, treating, and solids handling Associated with Sand Control Systems – Tank Cleaning and Sand Handling Systems

3. Our roots are in heavy oil. Most of our products have been developed for, or derived from, the heavy oil industry.

4. GRIT INDUSTRIES INC. :FABRICATION & MANUFACTURING

5. What does the Grit fabrication shop do? • Specialized steel fabrication and manufacturing. • Engineered steel secondary containment systems. • Steel fencing systems. custom roll forming line

6. Technology research and development • The fabrication shop is the home for most of the Grit R&D • Much of the revenue from sales is reinvested in technology development

7. Plasma cutter • Plate cutting capability up to 10ft W x 24ft L. • Plate thickness cutting capability – 18ga material to 1-1/4 inch plate. • Cutting accuracy to within 0.010 of an inch. • Cutting repeatability to within 0.005 of an inch.

8. No “heat affected zone” - effectively minimizing the impact of the cut on the inherent structure or properties of the material. Narrow cut, and a pressure of 87,000 psi Can slice through a thickness of up to 8” Can work with a wide range of materials, from steel to plastics. Water jet cutter

9. Grit Roll Form Mill Grit has a large roll form mill capable of molding panels from material as thick as 10 gauge Roll-form mill

10. Custom fabrication and engineering work • Hydraulic Equipment • Various custom made devices and systems

11. Secondary containment • Grit G-55 Secondary Containment Systems • Grit has designed a secondary containment system that specifically addresses legislation and guidelines on environmental spill protection.

12. Grit fabrication • Various breaks and benders, • Welding services, • Hot tapping, • Sand blasting and painting.

13. Fabricating sand management and solids handling equipment • Grit builds sand management equipment for Sand Control Systems and others • Grit are expert at solids management. • Systems are in place around the world for managing produced sand, catalyst, and other solids

14. GRIT INDUSTRIES INC. :G-55 SECONDARY CONTAINMENT

16. Environmental Protection System • Grit Industries Inc. has designed a secondary containment system specifically for the oil industry. • The G55’s modular design can be configured to many shapes and is well-suited for space-restricted installations. • The system is self-supporting, free-standing and virtyally maintenance free.

17. Advantages of G-55 Secondary Containment • Engineered and tested design with a full range of sizes, heights and layouts available, • Available in 12 and 14 gauge galvanized steel panels, • Requires a minimum of fasteners for assembly, • Both top- and base-mount liner attachments are available complete with all necessary hardware and sealant, and • Four inch wide top flange helps eliminate accidental injury.

18. MPT: What is the Mechanical Production Treater? • 45‘ heat exchanger (condenser) between well and tank • 10” flowtube inside a 14” shell • Auger/mixer/separator slowly turning in flowtube (≈ 1rpm) • Heat supplied by the Heat Driven Loop • Gas separated prior to the tank • Chemical injection upstream of treater

19. Pilot test in “problem high sand, foamy well” 30 m3/d @ 30% (2.5%) Unable to heat past 60º Short loads due to foam Sales cut 25-30% Sales cut 2% solids High solids cut required delivery to a more distant facility MPT: First pilot in Lashburn area well

20. MPT: BS&W in Lashburn

21. Significant device modifications during test – a learning process Tank is now consistently over 80º Foam problems resolved Sales cut 0.4 – 1.5% Sales cut trace solids Fuel Consumption = 84% of conventional system previously in use Oil to nearby facility Dependable Fluid Thermal Efficiency – 58% versus immersion tube efficiency of 32% MPT: Pilot 1 Lashburn area well - Results

22. Pilot test in good well 20m3/d @ 30% (trace) Whole purpose of test was to determine if the device could consistently treat clean in a single tank MPT: Second pilot in Lone Rock area

23. Consistently treats clean (<0.5% BS&W) in single tank Has been dependable and easy to operate but has had some problems with wet gas on location MPT: Second pilot in Lone Rock area

24. MPT: Tank sales cut in Lone Rock

25. MPT: Encana Provost Plant Evaluation Trial • 2 MPT’s installed at a field header on a test/interim basis while waiting for a cleaning plant to be completed • Test ran for ≈ 90 days • Typical Oil – 74 m3/d • Typical Water – 65 m3/d • Average input W/C - 46% • Demulsifier at 130 ppm • The MPT consistently produced clean oil from sales tank

26. MPT: Encana Provost process layout Mechanical Production Treaters

27. MPT: Various images

28. MPT: CCS and CNRL slop management • Slop treating facilities • Continuous once through process • Cleaning slop and/or cavern material to less than 0.5% by volume • Current rate is 35 m3/d (40% - 5% sand)

29. MPT: CNRL East Till Slop Management

30. MPT: Over the fence image

31. MPT: Why does it work? • Very efficient heat transfer. • Good chemical distribution • Short vertical travel distance for oil, water, and sand droplets while in flowtube • Removes the gas prior to the tank (reduced turbulence in tank) • No firetube related convection in the tank • Augured tank cleaning reduces cleaning turbulence • 10” flow tube reduces fluid velocity entering the tank • Quiescence in tank