Keith Pronske President & CEO CES 3035 Prospect Park Dr. Suite 150 Rancho Cordova, CA 95670

Non-Confidential – Proprietary to CES

Clean Energy Systems, Inc.

Oxy-Fuel Technology for Energy Production Operations

02 April 2015

• CES Background/Technology Overview

• Combined Steam-CO2 Gas Applications

• Separate Steam and CO2 Gas Applications

• Water Treatment Applications

• Discussion

AGENDA

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• Founded in 1993 in Sacramento, California by former Aerojet (a

GenCorp company) aerospace engineers; incorporated in 1996

• CES technology portfolio

➯ 20 MWt 4ʺ GG: Completed over 2,000 hours of running and is now insurable.

➯ 200 MWt 12ʺ GG: Successfully tested on more than 500 starts.

➯ 30 – 45 MWe Oxy-Turbine: Successfully produced power in less than 10 seconds on more than 50 starts.

➯ 150 MWe Oxy-Turbine: Currently commissioning/testing at partial load.

• 30 patents issued on zero-emissions oxy-combustion technology power cycles with another 36 patents pending.

• Owner of two power plants

➯ 5 MWe Kimberlina power plant (R&D site)

➯ 120 MWe Placerita power plant (commercial facility)

History and Recent Developments

COMPANY BACKGROUND

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Equity and Strategic Partners

COMPANY BACKGROUND

4 More than $125 million committed to technology development

Equity Partners

Paxton Corporation is an energy-focused company based in Calgary, Alberta; Licensee for use of CES technology related to emulsified bitumen (MSAR) in North America; significant equity position currently held by the largest shareholder of Paramount Resources Ltd.

Southern California Gas Company (a subsidiary of Sempra Energy; $26.0 B+ market capitalization) sells, distributes, and transports natural gas in the United States.

The AES Corporation ($10.5 B+ market capitalization) is a global power company with generation and distribution businesses.

Strategic Partners

Maersk Oil (subsidiary of A.P, Møller – Maersk A/S. with a $29 B+ market capitalization) is an international oil and gas company with operated production of about 625,000 barrels of oil (equivalent) per day. Licensee of CES technology in select markets. Paramount Resources Ltd. ($6 B+ market capitalization) is an independent energy company that engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids in North America.

Siemens Aktiengesellschaft ($85 B+ market capitalization) is a diversified international electrical and engineering company that provides solutions to the energy and other sectors. Subcontractor to CES on development of oxy-turbine.

US Department of Energy works together with the country’s private sector to develop and foster new technologies to ensure America’s long-term energy security.

• CES’ Kimberlina Power Plant (“KPP”) is the world’s largest oxy-fuel combustion facility (160 MWt)

• Enables efficient development of technology solutions to commercial maturity

• Today is primarily for R&D and sub-commercial operations

CES Kimberlina Power Plant

COMPANY BACKGROUND

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• Forty-acre site provides ample space for both future R&D programs and continuous, full-scale commercial operations

• Ideally situated: wedged in between heavy and light oil fields thirsty for steam and CO2

➯ Also amongst the water-deprived nut and fruit orchards of California’s Central Valley

➯ Sitting on top of a WESTCARB identified CO2 storage site

CES Technology Platelets

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• CES Technology: Platelet-Based Fuel Injectors ➯ Hundreds of individual platelets photo-

etched to form 3-D channels

➯ Precisely stacked platelets pressure-bonded into monolithic structures

➯ Intricate pathways channel bulk fuel, oxygen, and water into hundreds of combustors

➯ Intimate, stoichiometric mixing for complete combustion

CES Technology Oxy-Fuel Combustion Gas Generator

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• CES Technology: Oxy-Fuel Combustors

➯ Gaseous hydrocarbon fuels

➯ Natural gas, associated gas, recycle CO2

➯ High-CO2 content natural gas

➯ Intimate mixing of fuel and oxygen provide clean and complete combustion

➯ Producing only steam and high-purity CO2

CES Technology Oxy-Fuel Combustion Gas Generator

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• CES 12” GG

• 200MWth Capacity

• 15-25MMscfd CO2 from Natural Gas

• Up to 500,000lbs/hr. of Drive Gas

• Fuel Flexibility

• Full Power in Seconds

• Combustor: 12” Dia. x 6’ Long

• Packaged in 40 x 11 x 11 ft. Container

Direct Steam/CO2 Generation

DSG APPLICATIONS (PART A)

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Direct Steam Generation (DSG)

MARKET & APPLICATION I

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Courtesy ARC

GG Air

Natural Gas

Steam/CO2

ASU Power

Full H2O Treatment

3-Phase Oil Separator

Fuel Blending

Produced Water

Associated Gas

Bitumen from Producer

Bitumen

Concentrated Brine

Requires relatively clean, evaporator quality water

Bitumen: 3,000BPD Surplus Water: 656BPD O2: 138tpd Gas: 1,800Mscfd

• Tested on evaporator water for Canadian market

• Steam and CO2 are blended in one gas stream

• High water treatment costs favor “G2S2” concept or “PHRSG” concept (details on upcoming slides)

• Status:

➯ Fully tested for hundreds of hours; deployable today

➯ No component development required

DSG with “Clean Water”

TECHNOLOGY STATUS

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“G2S2” Utilizing Untreated Water for Steam/CO2 Gas Production

MARKET & APPLICATION II

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GG Air

Natural Gas

Steam/CO2 ASU

Power

Stea

m/B

rin

e

Sep

arat

or

Basic H2O Treatment

3-Phase Oil Separator

Fuel Blending

Produced Water

Associated Gas

Bitumen from Producer

Bitumen

Concentrated Brine

Bitumen: 3,000BPD Surplus Water: 656BPD O2: 138tpd Gas: 1,800Mscfd

Gas Generator / Steam Separator (G2S2) 13

• CES Technology: G2S2

➯ 4” Gas Generator (G2)

➯ Physical separation of water and steam in 20’ Steam Separator (S2)

➯ Consumption of filtered but untreated produced water

➯ 85% quality steam generation

➯ Result: 100% pure, quality steam/CO2 mixture at 1,000 PSIG

CES Technology

• Tested using actual Canadian POW

• Steam and CO2 are blended in one gas stream

• Primary benefit is substantial reduction in water treatment plant requirements/costs

• Can mitigate corrosion and CO2 in reservoir issues by using PHRSG downstream (details on upcoming slides)

• Status:

➯ All components successfully tested for hundreds of hours at commercial scale

➯ CES is working on field deployment decision in 2015, based on testing to date

G2S2 for use with Produced Oily Water (POW)

TECHNOLOGY STATUS

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Indirect Steam & (Separate) CO2 Generation

DSG APPLICATIONS (PART B)

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• High-Pressure Heat Recovery Steam Generator (PHRSG)

➯ Driven by CES Oxy-Fuel Burner, Gas Generator (GG), or Reheater

➯ Produces saturated steam from soft water

➯ CO2 recovered separately

Indirect Steam Generation with PHRSG

MARKET & APPLICATION III

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GG Fuel (Natural Gas) Soft Water

Condensate

HP Steam (1,000 PSIG) Pressurized

HRSG

Oxygen (from ASU)

Pressurized CO2 Water from Condenser Condenser

Steam/ CO2

Indirect Steam Generation with PHRSG

PHRSG DESIGN PARAMETERS

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GG

Source p: bara / psia

T: °C / °F ṁ: tph / lbm/s

Pressurized HRSG

Steam Out 85% Quality 59 / 850 272 / 522 24.8 / 15.2 To Oil Field

Water 60 / 865 48.9 / 120 24.8 / 15.2 Pipeline

Oxygen 124 / 1800 -1 / 30 5.9 / 3.6 Over the Fence

Nat. Gas 124 / 1800 10 / 50 1.5 / 0.92 Pipeline

D.I. Water 124 / 1800 49 / 120 18.4 / 11.3 Pipeline

• Green Boxes are used as hard requirements. • Blue boxes will be TBD dependent upon the final system design.

Steam/CO2 Out 12% Vapor Frac 102 / 1486 249 / 480 25.6 / 15.7 To Process

HEX Size Perspective (20 MWt & 7 MWt) 18

Three HEXs Built & Two Tested to Date

PHRSG SUB-SCALE COMPONENTS

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Saturation HEX Liquid-Gas HEX (1.0 MWt)

➯ 34.7” x 11.8” x 6.05”

Preheater (PH) Liquid-Gas HEX (2.0 MWt)

➯ 30.0” x 11.7” x 4.75”

Super Heater (SH) Gas-Gas HEX (0.5 MWt)

➯ 10.75” x 5.8” x 4.5”

CES Technology Development – Preheater Testing at Kimberlina

PHRSG CYCLE

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• Interest expressed by several customers as a backup technology to Direct Steam Generation

• Provides high-pressure/high-temperature steam and separate CO2

➯ May be re-blended to desired steam/CO2 ratio

• Credible technology option for clean steam generation (saturated or superheated)

• Status:

➯ Sub-scale components successfully tested

➯ Sub-scale integration testing (all three heat exchangers) expected completion in 2015 with deployment achievable in 2016

➯ Cycles operating at lower pressures (~20 bar) and with CO2-rich gas utilized as a diluent designed; hardware fabrication scheduled for 2015

o Use as direct substitute for OTSG with carbon capture

Indirect Steam Generation with PHRSG

TECHNOLOGY STATUS

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Advanced G2S2 CO2, “Pure” Steam, & Water Purification

MARKET & APPLICATION IV

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GG

Air

Natural Gas

ASU Power

Stea

m/B

rin

e Se

par

ato

r

Basic H2O Treatment

3-Phase Oil Separator

Fuel Blending

Produced Water

Associated Gas

Produced Hydrocarbons

Oil and/or Bitumen

Concentrated Brine

PHRSG Steam to Process or Producer

Co

nd

ense

r

CO2 to Producer

CW

Purified Water

RH Natural Gas

• Integrates all CES core components – Gas Generator, Steam Separator, High-Pressure Reheater, and PHRSG

• Offers the possibility of utilizing Produced Oily Water direct from field with minimal treatment in order to provide steam and CO2

• Action:

➯ All required components built and individually tested

o Additional testing obligatory at conditions required if fully integrated

➯ The Reheater design modifications required for operation at higher pressures (~100 bar)

o Existing Reheaters designed for ~20 bar applications

Advanced G2S2 CO2, “Pure” Steam, & Water Purification

TECHNOLOGY STATUS

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• Net-producer of fresh water.

• Working fluid stream components easily separated.

➯ Allows for easy GHG (CO2) capture.

• Significant footprint reduction over conventional OTSGs.

➯ Packaged within standard-sized international shipping container.

• CO2 production may be utilized for tailings treatment.

COSIA 2015 Focus Areas

CULMINATION

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DISCUSSION

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