1PPTN O V A SNOVAS

NOVAS PLASMA-PULSE TECHNOLOGY (PPT)

INCREASING OIL WELL PRODUCTION & PRODUCTION RATES

THROUGH STIMULATION BY:

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ABOUT THE COMPANY

Privately owned company founded in 2007 Oil related services using innovative technologies Holds 6 patents for Novas PPT* & proprietary equipment Treatment & stimulation of over 150 vertical wells in Russia, China & Kazakhstan Positive results achieved in 87% of wells using Novas PPT Our customers include:

* Novas PPT Well Treatment & Stimulation Inexpensive, mobile, environmentally friendly technology deployed for well productivity stimulation; increases rock and sediment permeability and cleans or removes impurities and other contamination from well bottomhole (manifold system)

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How it works

The producing formation or zone is exposed to hundreds of powerful discharges generating dense plasma. The elastic waves clean the bottomhole zone and propagate deep into the formation.

What happens

Selective cleaning of the bottomhole zone increases formations permeability and reduces the hydrocarbon viscosity

NOVASPLASMA-PULSETECHNOLOGY

Novas PPT was developed by a group of scientists from the St. Petersburg State Mining Institute and the St.Petersburg Scientific Research Institute for Electrophysical Apparatus

The technology has been successfully applied since 2007 $ 7,000,000 of investments in R&D over 4 years

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Following the treatment, the flowing level increased considerably, indicating a more substantial potential of the well

PERFORMANCE & RESULTS

Treatment

59,25 64,5 64,0

120127,5 133,5 127,5 127,5 127,5

JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER

Formation: Yu1/1Reservoir: Tight SandWork purpose: Oil production stimulationTreatment date: 13.03.2011

Production increase of almost 100%Increased production persisted more than 11 months

BOPD VFPD, m3 WC, %

Fluid lvl, m0

2500

500

1000

1500

2000

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ECONOMIC ANALYSIS

Three (3) Wells Received

Novas PPT Treatment in

Siberia in the Spring 2011

Total Production Rate of Three (3) Wells Before Treatment:149 Barrels/Day

Results of Novas PPT Treatment

On the Three (3) Wells

Total Production Rateof Three (3) Wells After Treatment:262 Barrels/Day

Average increase over 11 months:

113 Barrels/Day

Well AVFPD 11 m3

BOPD 64WC % 19,4

Well BVFPD 13,5 m3

BOPD 67WC % 26,6

WellVFPD 8 m3

BOPD 18WC % 57,5

Before After

Well AVFPD 16 m3

BOPD 95WC % 7

Well BVFPD 26 m3

BOPD 124WC % 18

WellVFPD 8 m3

BOPD 43WC % 20

Total Customers expenses $110,000Payback period 70 days (including all taxes and costs)Almost 2x increase in production

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A pilot equipment unit for horisontal wells is being developed to be ready late 2012

OUR RESEARCH AND DEVELOPMENT

While possessing proven plasma-pulse technology for vertical wells, Novas Energy began to adapt the technology for application for increasing the gas/oil recoverability rate in horizontally completed oil and shale-gas wells

Directional and horisontal wells Environmental safety excellence Technological safety Higher productivity Energy efficiency

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The Novas PPT will make it possible to uniformly decolmatate the entire producing interval of the horizontal well without large expense and time

ADDITIONAL OPPORTUNITIES

Issues Solutions

Application of the traditional methods to treat the horizontal well bottomhole zone is often ineffective due to the horizontal position and the length of the well productive interval

For wells located in close proximity to aquifers, the potential for the migration of chemicals or hydrocarbons into groundwater often creates substantial risks, which frequently limits the application of traditional well treatment and stimulation methods

Horizontal well boreholes often contain uneven fluid influx profiles with alternating high and low influx zones; it is not uncommon for a substantial part of a horizontal well borehole to not operate at all

The Novas PPT is absolutely safe for the environment, using no chemical agents, and will not disturb the integrity of the reservoir

Super-accurate selective exposure to impact well allow the influx profile to be adjusted and the horizontal well potential to be realized

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Relative dynamics of drilling wells of various types in USA Sources: Baker Hughes and U.S. DOE

GLOBALHORIZONTALOILWELLMARKET

The worldwide trend toward horizontal

drilling suggests that, by 2016, the

number of horizontally completed wells

that may benefit from Novas PPT will

exceed 160,000

Distribution of the horizontal well stock among the countries

By 2016, the volume

of the market for oil rate

increase from the horizontal

wells using PPT might reach

$960,000,000 per annum with

a YOY increase of 5 to 10%

USA China Russia Other countries

Horizontal Directional Vertical

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

20%

0%

40%

60%

80%

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THE TEAM

Nikita Ageyev

Ph.D. in Economics. CEO since 2007.Attracted over $ 7,000,000 investment to the project

Valentin Streltchenko

DoctorofTechnicalSciences,Professor.ViceRectorofGubkinUniversityOil&GasUniv.Chairmanand Deputy Chairman at 6 international conferences (Horizontal Wells in 1993, 1997, and 2000, WellGeophysicalSurveys,1998,Petrophysics,2010,WellLogginginthe21stcentury,2011)

Anatoliy Moltchanov

DoctorofTechnicalSciences,ProfessoroftheGeophysics,ChairattheSt.PetersburgStateMining University. One of the plasma-pulse technology creators

Aleksandr Maksyutin

Ph.D. in Petroleum Engineering. TheLaureateofover20diplomasandcertificatesofachievementinOilandGasIndustry

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S WClearly demonstrated competency of the team Tight-money policy, no possibility of fund reallocation.

Goodunderstandingoftheconsumersandthemarketsituation

No funds for a case of immediate strategy change

High art of the Research and Advanced Development Product unknown by the market

Basing the development on the reliable, well-tried technology

Weak market participant, no international standing

Experience of introducing a new product to the market No detailed analysis of the consumer information

High art of the competition Expressed conservatism of the consumers

Price advantage Lack of experience in international legal know-how protection

O TGrowthofthehorizontalwellproductivityincreasemarket Market growth deceleration

Tightening of the ecological policy Appearance of competitive technology with similar characteristicsNeglect by the competitors Failure to achieve the project equipment characteristicsForeign market barrier lowering Hydrocarbon price reductionHydrocarbon price increase Increase of the price for services and componentsReduction of the price for services and components Opposition by competitorsAttraction of a strategic partner of the international level Failure to correctly determine the development term

PROJECT DEVELOPMENT OPPORTUNITIES

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1. Creation of a laboratory sample of equipment, which will prove possibility of manufacturing of plasma-pulse generator with the specified characteristics;

2. Creation of physical-mathematical model and software for modeling and automating processes

3. Involvement of third-party investment for pilot works and commercialization

4. Pilot work, promotional work, marketing, presentation of a new product on the market, market positioning

5. Engaging of a strategic partner with an experience and strong position in the oil market

6. Enter to US and Western Europe markets by establishing of regional centers

MAJOR AREAS FOR DEVELOPMENT

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WEARELOOKINGFORASTRATEGICPARTNERINTHEUS

Novas Strategic Partner

Joint North American (U.S. and Canada) Market Launch

Novas PPT Market Knowledge

Scientific Resources Funding

Technological Centre Scientific And Technical Support

Qualified Operating Personnel Test Facilties

Confidentiality & Shared Analysis of Well/Reservoir Profile Data and Performance Data

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CONTACTS

Moscowffice

James Hurley

20929 Ventura Blvd. Suite # 47-337 Woodland Hills, CA 91364

Tel: 1 (747) 888-6605

E-Mail: jdhurley@novas-energy.ru Web: www.novas-energy.com

US Representative Offices

142784, Moscow region, Leninsky district, village Rumyantcevo,

bld 2, PO Box No 11

Tel: 7 (495) 225-6240

E-Mail: info@novas-energy.ru

Web: www.novas-energy.com