Roy Lipski, CEO October 22, 2013

Smaller scale GTL The Oil Council N. America Assembly

Velocys Leaders in smaller scale GTL

Leader in smaller scale gas-to-liquids technology 15 years and >$300 million invested in technology development Exhaustive global patent protection (>7,500 granted GTL patent claims) First class partners offering a complete GTL solution Onshore: Haldor Topse, Ventech, Petrofac, Hatch, Toyo Engineering Offshore: MODEC, Toyo Engineering Commercial roll-out underway
BAs GreenSky London

Ashtabula GTL

Well capitalized with strong commercial and technical teams Operating from 3 main facilities in Texas, Ohio and the UK
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Market environment Ripe for GTL

Shale revolution ushering age of gas surplus Long-term stability of gas-oil arbitrage expected Other favorable drivers Growing demand for middle distillate (diesel and jet) Energy security Environmental benefits e.g. flare elimination and carbon footprint reduction (biomass-to-liquids) Strong location-specific economic and strategic factors Shell and Sasol plants in Qatar showcase viability of GTL
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Large-scale economics at smaller scales Velocys enables smaller plants

Conventional slurry reactor Velocys microchannel reactor
$k/bpd capacity
Cost advantage

Velocys FT reactor

Conventional FT Reactor
Velocys microchannels cost range
2000 4000 6000 8000 10000 12000 14000

2,000

6,000

10,000

15,000

Plant capacity (bpd)

e.g. Sasol

Microchannel technology offers strong benefits at smaller scales

4

GTL for the mainstream of the industry Velocys modular GTL

Broader range of sites

1,000-15,000 barrels per day Suitable for remote locations Lower risk Smaller investments On site construction reduced Additional trains can be added later Reduced costs Modules and reactors designed once Quicker plant construction (18-24 months) Less strain on supply chains Possible integration with existing facilities

1,400 bpd FT process unit designed by Ventech Engineers 90 ft L x 46 ft H x ~40 ft W

Smaller scale GTL Upstream

Solution to flaring 5% of natural gas produced is flared Regulation, royalties and taxation increasing Unlock constrained oil production Increase revenues and reserves High value product created from zero value input No separate transportation infrastructure needed Co-blend and transport with existing crude production
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Smaller scale GTL Midstream

Get more gas to market Where no gas pipeline exists Where potential production exceeds available infrastructure Increase gas demand without impacting price Gets gas into transportation Local production for local demand More choices for producers Diversify from gas into oil pricing Access global markets Capture the gas / oil spread
Interstate and intrastate pipelines
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Not all gas is discovered at Henry Hub

Smaller scale GTL Downstream

Create high value products High quality diesel and jet fuel Specialty chemicals, waxes and lubricants De-bottleneck operations Upgrade off spec products: FT diesel has higher cetane and no sulfur Reduce capex & opex by colocation Leverage existing infrastructure Use excess steam from GTL plant

Calumet Specialty Products

Proposed Proposed GTL site GTL site

Velocys enables winning economics Base case

$150 Costs & proceeds ($/barrel of liquid products) Premium from sale of diesel Oil (WTI) OPEX Depreciation Natural gas

Key financial assumptions Facility producing 80% diesel & 20% naphtha Gas price = $4/mmbtu 9,500 scf gas per barrel

$125

$100

$75

$50

Capital cost = $100k per bpd for 2,500 bpd stand-alone Gulf coast plant Operating cost = $15/bbl

$25

20 year plant life

Costs of Velocys enabled Proceeds from production of GTL plant liquid fuels

$0

Velocys enables winning economics Site-specific opportunities

$150 Costs & proceeds ($/barrel of liquid products) Premium from sale of diesel Oil (WTI) OPEX Depreciation Natural gas
Co-location reduces capex & opex e.g. downstream Lower gas costs if stranded or associated Increased product value if specialties e.g. lubricants / waxes or if producing refined products in remote locations

$125

$100

$75

$50

$25

Added value from unlocking restrained oil production

$0 Costs of Velocys enabled Proceeds from production of GTL plant liquid fuels

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Why smaller scale GTL? Right product, right place, right now
GTL for the mainstream More opportunities; open to more players Practical Easier to finance, permit, supply, build and operate Manageable risks Smaller investments, can be phased; reduce in-field construction; reduce overall construction time Profitable Unlock resources; increase gas demand; capture gas / oil spread; access global markets; leverage existing infrastructure Available now Velocys and partners
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Thank you
Roy Lipski CEO, Velocys

+1 713 275 5840 info@velocys.com

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Changing the way fuels are made

Appendix

About us Leaders in smaller scale GTL

Unique innovative technology solution for smaller scale GTL* World-class pedigree 20 yrs of research and development University of Oxford: top global research centre; largest chemistry department in Western World Battelle: worlds largest independent science and technology organisation Global leader Worlds largest and strongest microchannel IP portfolio (>800 patents) >$300 million invested, much by commercial partners Critical mass ~100 employees focused on GTL with a strong balance sheet First class partners offering a complete GTL solution Commercial roll-out underway * Target range 1,000-15,000 bpd
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Board of directors Industry expertise, technical and commercial experience

Pierre Jungels, PhD, CBE Chairman 30+ yrs in oil industry: was CEO Enterprise Oil; ED PetroFina; MD British Gas Roy Lipski Chief Executive Officer 17 yrs managing growing technology businesses. Led the company since 2006 Susan Robertson, FCA Chief Financial Officer 17 yrs with BOC: was CFO and VP of Japan Air Gases (now known as Air Liquide Japan) Paul Schubert, PhD Chief Operating Officer 30+ yrs in technical & management roles: SGS, Syntroleum, Phillips Petroleum & Englehard Andrew Jamieson, PhD, OBE Non-executive Director 30+ yrs with Shell including Pearl GTL plant. Leading GTL figure

Sandy Shaw Non-executive Director 30+ yrs in oil & gas industry including as legal counsel. Founder of Valiant Petroleum Jan Verloop, PhD Non-executive Director 30+ yrs with Shell. Responsible for Shells strategic innovation and technology vision Julian West Non-executive Director 40+ yrs experience of energy policy, in the private and public sectors. Director at CERA

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Intellectual property Largest IP position of its kind

Worlds largest microchannel patent portfolio >25,000 claims in >800 patents 95 patents granted in 2012 Over half of patents cover GTL High quality IP cited over 3,000 times in others patents 100% success rate to date defending challenges / re-exams of own patents IP portfolio has years to run continually being renewed and extended Pursuing infringers e.g. CompactGTL
0 United States Europe, Russia Canada China Japan Australia South Korea South Africa Other 5000 10000

Granted Claims Pending Claims

150 100 50 0

Number of patents expiring

Foreign filling and divisional applications yet to come

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

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Velocys microchannel technology Compact, robust, efficient and economic

Principles of design and operation
Particulate catalyst in small channels High catalyst volume fraction Syngas downflow, products exit bottom Cross-flow coolant water / steam generation Heat removal by steam generation High per pass conversion (75%+) Isothermal behavior thermally stable Extremely robust to upsets Strong economy of mass manufacturing Accommodates high activity catalysts Installed spares relatively cheap High on-stream factor Tail gas recycle only to achieve high conversion Extremely high volumetric productivity Ease of modularization
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Strengths

Pilot plant and training facility Supporting sales and delivery

Integrated GTL pilot plant at the Velocys Ohio, USA site Provides Performance data to support differing client designs Product for client studies Permanent training facility for plant operators Platform for Developing our own field support staff Demonstrating future product generations
Add pilot plant photo

Pilot plant

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Petrobras demonstration Integrated microchannel FT and SMR

Offshore GTL partners: Toyo Engineering, MODEC and Petrobras 6 bpd plant mimics complete FPSO-mounted GTL facility One of 3 field demonstrations

20

Complete GTL solution Together with world-class partners

Technology

Resource Holders

Engineering

Modular GTL
Field Services Fabrication

Catalyst

21

Integrated modular GTL facility Site-specific client designs underway

Catalyst loading

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Engineering partners Example: Ventech Engineers

Placed reactor order for 1,400 bpd capacity in April 2013 8 commercial scale reactors Kick-started supply chain Production underway
Delivery 18-20 months

Several GTL plants in engineering Considering investing in some of these Progressing own GTL project in Texas, USA

23

Manufacturing Ramping up for mass production

Implementing multi-million dollar state-ofthe-art production cell at chosen supplier Cost-effective mass production Consistent high quality In place by year 2013 Initial capacity supports 10,000 bpd/yr of orders Production cell is replicable and scalable Cost effectively Lead-time within plant order duration Plans in place to support a 4x capacity increase
Designed for production

Reactor manufacture

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Growing US demand for distillate fuels Transportation energy consumption by fuel (quadrillion btu)
30 25 20 15 10 5 0 1990 History 2011 Projections

22% 11% 4% 2%

Diesel Jet fuel Other Pipeline fuel

CNG/LNG E85

29% 4% 13% 1% 4% 3% 47%

60%

Motor gasoline

Increased demand for diesel and jet fuel favours GTL

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Source: EIA, Annual Energy Outlook 2013 Early Release

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