Investor Presentaiton

120 Background Shale Gas Production Boosting in China in Recent Years Climate Challenge caused by Oil and Gas Production are Raising Attention Nine major emission source including Pneumatic Controllers, etc. were identified Gas is treated and stored prior to entering distribution system Shale Gas Production (X 108 m³) 100 80 ཕྱྀ ཎྱཾ ཏྲྱ ལྔ རྔུ རྫུ 60 45 >100 91 79 12 0.1 2 0 2012 2013 2014 2015 2016 Year 2017 2018 Shale Gas Production in China (Modified from Zheng et al., 2018) Flowback water returns to the surface and is impounded prior to treatment or reuse SHALE GAS DEVELOPMENT A vertical well more than a km deep is 300m gradually turned through 90° angle and continued up to 3km horizontally. Hydraulic fracture occurs with 7-18 million liters of water which has been mixed with sand and chemical amendments to protect down-well equipment and optimize flow conditions. 700m Fracture water is pumped at high pressure to fracture the formation 1100m solids and increase permeability. Sand or other "proppant" flows into the new fissures to retain the newly introduced permeability as down-hole pressure decreases with the flow of the fracture 1500m water and gas to the surface. Gas-bearing Shale Formation Sand "proppant" holds open new permeability as pressure is released at the well head High-pressure water fractures formation and increases permeability of the formation Formation Gas and fracture water return to surface 0 D Newly introduced fracture in shale Well Casing Perforation and Overview of Shale Gas Production Process (Dzombak et al., 2011) 2

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