Heatec Meeting Feb 19 th , 2014

1. Heatec Meeting Feb 19th, 2014

2. Federally Chartered • Founded in 1988 • Head Office, Calgary, Alberta • Service Office, Edmonton, Alberta • Presently over 30 employees on staff Company Profile

3. Industrial equipment and packaging • Commercial boilers and ancillaries • Rental boilers • Service and parts Market Segments

4. Sale of Industrial Heaters, Boilers and WHRU’s • Complete package design to customer specifications • Turnkey modules designed to eliminate field fabrication requirements Industrial Equipment and Packaging

5. Spectra Energy, Drawings and Models • Paramount Phase II, Drawings and Models • Husky Energy – Model • Secure Energy – Model • Paramount Arc Boiler – Model • Conoco Surmount – Model • Bellatrix – Model • Inlet Sweetening - Model Recent Projects Review

6. Spectra

7. Spectra

8. Paramount Phase II

9. Paramount Phase II

10. Secure Energy

11. Secure Energy

12. Secure Energy

13. Secure Energy

14. Spectra Energy, Drawings and Models • Paramount Phase II, Drawings and Models • Secure Energy – Model • Husky Energy - Model • Paramount Arc Boiler – Model • Conoco Surmount – Model • Bellatrix – Model • Inlet Sweetening - Model Recent Projects Review

15. Approximately 80% of heaters sold were not packaged • Packaging was done by plant integrators or tendered separately • Gas, SAGD, Oil end users Canadian Market - Historical

16. Approximately 85% of heaters sold are with complete packaging by HTH • RFQ’s are coming direct from end user/engineering firms • LNG plants are starting to come out through EPC’s • Rail car loading stations have been coming out through EPC’s Canadian Market - Current

17. SAGD activity has fallen off over last 12 months • Natural gas plant activity has increased over last 12 months Canadian Market - Current

18. CDN dollar has weakend by 10% in last 4 months • Analysts predict another 5-10% slide by end of 2014 • Effect of US exchange rate changes has a limited impact on Canadian manufacturers Canadian Market Factors

19. Wellons • Petrotech • Sigma Thermal • GTS • Cleaver • Saskatoon Canadian Market Competition

20. Fabrication facility in BC lower mainland • Lower cost base than Alberta • Some of their coils are getting wound locally in the lower mainland • We have seen one site where they were done by Tulsa Tube Canadian Manufacturers - Wellons

21. Fabrication facility in Calgary • Subcontract out winding of pipe sections • Weld sections together in their facility • Older units were fabricated in Europe Canadian Manufacturers - Petrotech

22. Fabrication facility in Saskatoon Sask • Firetube boiler manufacturer • Very high (majority) of engineers insist on specifying 50F delta T max. This appears to be the limit Saskatoon will go to on high temp glycol • We are successful in driving the delta T up on some projects Canadian Manufacturers - Saskatoon

23. Cost of Firetube design approx 60 to 70% of Heatec coil (vessel only). Based on Superior Boiler • Efficiency of Firetube design is above helical coil, especially on the lower temp glycol designs • Firetube designs don’t vary duty and firing rate based on fluid/temp. Canadian Manufacturers - Saskatoon

24. Wellons – Dawson • Petrotech – Pelican lake • Sigma Thermal – Foster Creek Review Competition Pics

25. Wellons

26. Petrotech

27. Sigma

28. Standardized information for all proposals • Peripheral information not required in quotation (TOP, Company Description, Etc)(Sample #1 of modified Quote) (Tabular better for HTH) • HTH using standard RFQ template. Quotes come with incorrect information (Sample #2 of RFQ template and Quote Received) Heatec Sales Support

29. Re-use existing CRN’s, 10 year limitation without resubmittal for review • How can HTH Sales reduce load on Heatec Sales department? Heatec Sales Support

30. Exhaust exit out side of heater option? Lower packaging costs on some projects • Reduced stack outlet size? Lower packaging cost on some projects • Coil exit out side of shell at burner end of heater? Cleaner layout in building, reduced packaging costs (smaller building, heater/building interface simplified) Heatec – Design Changes

31. One or two points of contact at facility • Standard information required for all project submittals(ITP, Schedule) • Standard commercial documentation required on all projects (MTR’s and packing list for coil material, Hydrotest cert for coil) for Heatech milestones Heatec Project Support

32. Use HTH project reference number in all correspondence as well as Heatec SO number. Reduced confusion • How can HTH reduce load on Heatec projects department? Open Discussion • HTH uses a modified Heatec template to issue PO. We get questions on what ASME Section is required. Should we us a different form? (sample #3 in folder) Heatec Project Support

33. Investment in facilities to respond to market requirements • Expansion of staffing to meet higher sales and project loading Heatech Future Direction

34. Shop Expansion • 9000 sqft assembly bay • 120 000 lb four point lift • 28’ clear hook height

35. Shop Expansion • Full load out capability • Structural/Stack assembly pad • Completion spring of 2015

36. Review mins of May 31, 2013 meeting