next-generation fly-ash based proppants

PROPPANTS INVESTMENTPROPPANTS INVESTMENT FORUM

Next-Generation Fly-Ash Based ProppantsDavid Henson – CEO, LWP Technologies ‐ Americas

GRANGE CITY HOTEL, CITY OF LONDON ● THURSDAY, 21 APR 2016www.ObjectiveCapitalConferences.com

PROPPANT FORUMwith

Objecti e CapitalObjective Capital

London21 April 2016

David Henson

LWP Technologies Limited (ASX:LWP) - Next-Generation Fly-Ash Based Proppantswww.lwptech.com 2

David HensonCEO

This disclaimer forms part of and is incorporated in the accompanying material

The information in this presentation is an overview and does not include all information necessary for investment decisions. In making investment decisions,investors should rely on their own examination of LWP Technologies Limited, (LWP) or consult with their own legal, tax, business and/or financial advisors inconnection with any acquisition of securities. This information has been prepared in good faith by LWP. However, no representation or warranty, express orimplied is made, in relation to the accuracy or completeness of the information provided in this document or any other information by LWP otherwiseprovided to the recipients. Whilst every care has been taken with preparation of the information contained in this document, no responsibility is accepted byLWP or any of its representatives, directors, partners, employees or professional advisers for any information provided in this document or otherwiseprovided to the recipients or for any action taken by the recipients on the basis of such information. In particular, no representation or warranty is given asto the accuracy likelihood of achievement or reasonableness of any forecasts prospects or returns contained in the information Such forecasts prospectsto the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in the information. Such forecasts, prospectsor returns are by their nature subject to significant uncertainties and contingencies. Each recipient of the information should make its own independentassessment of the information and take its own independent professional advice in relation to the information and any action taken on the basis of theinformation.

This presentation includes forward looking statements within the meaning of the Corporations Act. These forward looking statements may be identified bywords such as “may,” “will, “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,”y, , p , , p , , , p , p j , , , , , ,“target,” “guidance,” “outlook,” “forecast” and other similar words. These forward looking statements are based on LWP’s current objectives, beliefs andexpectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events todiffer materially from those described in the forward looking statements: failure of a proposed transaction to be implemented; the challengers of cost andclosing, integrating, restructuring and achieving anticipated synergies; the ability to retain key employees; and other economic, business, competitive,and/or regulatory factors affecting the business of LWP generally, including those set forth in LWP’s business plan, in particular, the “Risk Factors” section.Any forward looking statements speak only as of the date hereof or as of the dates indicated in the statements. LWP assumes no obligation to publicly

d t l t f d l ki t t t t fl t t l lt h i ti h i th f t ff ti th f d


update or supplement any forward looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forwardlooking statements except as required by law.

© LWP Technologies Limited

A Comprehensive Review on Proppant TechnologiesFeng Lianga, Mohammed Sayeda, Ghaithan A. Al‐Muntasheria, Frank F. Changb, Leiming Lia

a Aramco Services Company, Aramco Research Center – Houston, 16300 Park Row, Houston, TX 77084, USA

b Saudi Aramco, P.O. Box 5614, Dhahran, 31311, Saudi Arabia, , , ,

Received 1 October 2015, Accepted 5 November 2015, Available online 14 November 2015

65 Year of Fracturing Experience : The Key to Better Productivity Is Not What we Have Learned, But What We Have Forgotten..

F Syfan Terry Palisch J Dawson – 2013 SPE 166107


F Syfan, Terry Palisch, J Dawson 2013 SPE 166107

Generally, silica sand is used to prop open low stress fractures in shallow formations. Sand is less expensive per

Propping AgentsGenerally, silica sand is used to prop open low stress fractures in shallow formations. Sand is less expensive per pound than Resin Coated Sands or ceramic proppants.RCS is used where more compressive strength is required to minimize proppant crushing, it has an effective density that is less than sand.Ceramic proppants consist of:

Sintered bauxiteSintered bauxiteIntermediate‐strength proppant (ISP)Lightweight proppant (LWP)

The strength of a ceramic proppant is proportional to its density. Also, the higher‐strength proppants, like sintered bauxite, cost more than ISP and LWP. Ceramic proppants are used to stimulate deep ( > 8,000 ft) wells where large values of in situ stresses will apply large forces on the propping agent

When choosing a propping agent, a proppant that will maintain enough conductivity after all crushing and embedment occurs must be chosen The effects of non Darcy flow multiphase flow and gel residue damage should

values of in‐situ stresses will apply large forces on the propping agent.


http://petrowiki.org/Propping_agents_and_fracture_conductivity

embedment occurs must be chosen. The effects of non‐Darcy flow, multiphase flow, and gel residue damage should also be considered.

UNDER PRESSURE (ISO 13503‐2)

b / h h d


Low Krumbein 6K 20/40 Northern White Sand crushed at 7,000PSI – net result 10.8% fines

LWP Ceramics under pressure


High Krumbein 14k LWP 30/50 Ceramic proppants crushed at 15,000 Psi

Kaolin Based Ceramics

• Kaolin - White Bone China aka Porcelain

• ‘High Ridge’ in Chinese.

• Approx. 1450 Degrees Celsius firing temperature


Bauxite Based Ceramics

Refractory Grade Bauxite55-60 % Al2O3

< 5 % SiO3< 5 % Fe2O3


Dehydration/calcining 1 hr at 1080 deg CCalcining approx 1 hr at 1800 deg C

What is Coal and Flyash?


Source : EngineeringToolbox.com

Flyash basicsASTM Class F Class C>70% ------------>50%

Ash content coal up to 40% !!


Ash content coal up to 40% !!

Flyash Classes (US – ASTM C618)Flyash Classes (US ASTM C618)


The difference is?

While both classes of fly ash greatly reduce concrete permeability as compared to the cement only mixes Class F tends to give proportionately greater permeability reductioncement only mixes, Class F tends to give proportionately greater permeability reduction. Due to the higher levels of pozzolanic compounds, Class F fly ash mitigates against sulfate attack, alkali silica reaction, corrosion of reinforcement, and chemical attack.While Class C fly ash generally improves concrete durability as related to these forms of tt k hi h l t t b t ff ti l iti t thattack, higher replacement percentages may be necessary to effectively mitigate them.

What about melting behavior?


http://www.boralna.com/flyash/faq.asp

g

Flyash Melt Phenomena ‐ Eutectics


ASH FUSIONTEMPERATURES AND THE TRANSFORMATIONSOFCOALASHPARTICLES TO SLAG S.Gupta.T.F.Wall.R.A.Creelman andR.Gupta Department of chemical Engineering University of Newcastle, Callaghan, NSW 2308, Australia

Si Al Ca / Si Al Fe (quat)Ternary Diagrams


Changes in Fly Ash With Thermal Treatment John M Fox 2005 World of Coal Ash (WOCA), April 11-15, 2005, Lexington, Kentucky, USA

Mechanics of SinteringSintering occurs by diffusion of atoms through the microstructure. This diffusion is caused by a gradient

of chemical potential – atoms move from an area of higher chemical potential to an area of lower chemical potential. The six common mechanisms are:

Handbook Advanced CeramicsSomiya et al 2003


FLYASH + SINTERING + mechanical densification = ????

So lets get at it …..g

Phase 1 R&D 2011‐13 Erlangen, GermanyPhase 2 2014 present


Phase 2 2014‐presentBrisbane, Australia

Area of research Timeline (yrs) Key findings

R&D – Technical Lab

Effects of grinding and classifying 2 Control green and fired strengths

Green strength and density via moisture and binders 2 Sufficient for using commercial equipment such as vibratory, belt elevator etc

Eutectic melting point effects of combustion impurities and i dditi ( ti ki )

3, ongoing Key effects of natural impurities and processing additives t d ti ki id tifi dprocessing additives (sticking) to reduce sticking identified

Porosity control via flux and doping agents 1, ongoing Ability to moderate porosity

Sintering, decalcining and quench curve optimisation 1, ongoing Up to 15% reduction in sintering temp via additive/blend. Energy consumption.

Krumbein factors (Sphericity /Roundness) 2, ongoing Controllable 0.6<x<0.9

Rapid screening method for flyash testing 1, ongoing Proprietary

Clean coal combustion impacts 2, ongoing Effects of FGD, ammonia, activated carbon and other cleanup residues

Ageing effects of flyash 1 Confidential


Rapid on line or in house test methods to enable process and quality control

2 years Proprietary

Flyash Testing Program

Type of flyash / number of tests

Lab scale - 2015x flyash @ y tests

PilotScale 20161

K range(k PSI)

Characteristics / observations

Australian 3@16 In progress

5< x < 7

Indian 3@91 1@3 5 < x < 15 Scale up results identical to lab !!

Chinese None in 14 /15

US 6@43

South African ? TBD

European ? TBD

1 Brisbane pilot plant first production run December 2016


1 Brisbane pilot plant first production run December 2016

R&D – Commercial / EngineeringKey area Target FindingsLogistics models P2P vs Hub vs be - spoke Point of use manufacture,

logistically differentiated

C S C fCommercial model US , Australia complete, ME under development

Confidential

Site location key factors Oil field, power plant, fuel availability

Confidentiala a ab ty

Energy consumption Reduced calcination/reaction energy

Lab analysis complete, validate with new facility

Standard plant design 50k and 100k TPA facilities Confidential


Standard plant design 50k and 100k TPA facilities Confidential

Conceptual Plant Design


Build this, Get that …

⍬ not to scale


Brisbane Pilot Plant• Production capacity: 3,000 tons/year

• Construction completed May 2015, commissioning completed August 2015

• First scale up results validated 3rd party December 2016 12k Proppant �


2016 Development Activities

Activity Duration Target resultAustralian Ash (lab) 2 months Sinter curve and mix design

Texas Ash (lab) 2 months Sinter curve and mix design

Indian Ash (pilot) Successful scale up Optimise plant design parameters

( ) S 2 S fAustralian Ash (pilot) Starting q2 Scale up, finalise plant design parameters

Texas Ash (pilot) 4 months …

Canadian ash Under development ?


CCP’s – A US success, an Emerging Global Business


The US leads the world in beneficial reuse of flyash at approx 50%

https://www.acaa-usa.org/Portals/9/Files/PDFs/2014ReportFinal.pdf

http://ashtrans.eu/onewebmedia/15%20ASHTRANS%202015%20TDUVE.pdf

India – A Growing Challenge to Achieve..

Note : also includes minefilling and ash dyke/dam raising for flyashP d b fi i l (23%)


Ponds as a beneficial use (23%)

http://cea.nic.in/reports/others/thermal/tcd/flyash_final_1415.pdf

Indian FA CCP exports to Saudi Arabia…


http://www.infodriveindia.com/india-export-data/fly-ash-export/fc-saudi_arabia-report.aspx

Conclusions

1. LWP Flyash proppants ‐ Sand to Ceramic flexibility2. Proven scale up and repeatability across various feedstocks3. Logistically differentiated – manufacture close to point of use


next-generation fly-ash based proppants

Economy & Finance