TEST RESULTS FOR HALLMARK JV FURTHER VALIDATES LWP’S LOW-COST FLY-ASH BASED PROPPANTS

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TEST RESULTS FOR HALLMARK JV FURTHER VALIDATES LWP’S LOW-COST FLY-ASH BASED PROPPANTS

  •  Test results completed by German laboratory for proppants made from Indian fly-ash for Pune plant
  •  Test work conducted on behalf of LWP and Hallmark JV as part of proposed plant upgrade and commissioning in Pune, India
  •  Results point to significant reduction in manufacturing costs at Pune plant
  •  Plant upgrade equipment evaluation program is progressing and ongoing
  •  Global marketing initiatives of LWP technology licensees are ongoing

ASX ANNOUNCEMENT 13 March 2017

Energy technology company, LWP Technologies Limited (ASX: LWP) (“LWP” “the Company”) is pleased to provide an update on the completion of lab testing results of the Company’s patented fly-ash based proppants on behalf of the joint venture between LWP and Hallmark (Hallmark JV) ahead of the proposed manufacturing of proppants at the Pune plant in India.

The test work was conducted on newly developed proppants made primarily of Indian fly-ash and clay. A number of raw materials have been tested, in order to ascertain the optimal mix design and raw material inputs with the joint goals of minimizing manufacturing costs, while maximizing compressive strength.

The tests were conducted using systems from Retsch Technology, a world-leading provider of neutral-toanalysis sample preparation equipment. The testing results achieved are a significant and important step, which adds momentum to the Hallmark JV. A full report of the testing results accompanies this ASX release.

In summary, the test results demonstrate that:

  •  The multiple raw material feedstocks that are available in near proximity to the Pune plant are able to be utilized to manufacture excellent quality, light weight, low-cost, high-strength proppants at the Pune plant;
  •  Bauxite is no longer required in the optimal mix design, thereby significantly reducing raw material costs, as bauxite was formerly the most expensive raw material input;
  •  Fly-ash content of the optimal mix design is markedly higher than previous mix designs, and as fly-ash is the lowest cost raw material input, this further minimizes raw material input costs;
  •  The bulk density of 1.28 [g/cm3], and specific density of 2.56 [g/cmÑ] is the lightest weight proppant that LWP has ever produced, and compares favourably to white sand proppants bulk density of 1.48-1.60 [g/cm3], and specific density of 2.65 [g/cmÑ].
  •  The Ultra light weight of LWP proppants reflects the high percentage of flyash in the mix design and the elimination of bauxite. LWP is not aware of any clay based or bauxite based proppants that can compare to LWP in terms of light-weight;
  •  The 11,000 Psi (pounds per square inch) compressive strength achieved in these tests was unexpected (but most welcome), as traditional industry knowledge/experience is that compressive strength increases are usually attributable / proportionate to the increased addition of bauxite into the mix design. That this increase in compressive strength for LWP’s low cost proppants was achieved without any bauxite at all is remarkable;
  •  The lowering of the sintering temperature for this latest mix design, indicates savings in energy costs are likely for the Pune plant. These test results should lead to increased interest in LWP low-cost proppants from oil and gas companies and contractors in India and around the world.

LWP also confirms that equipment evaluation for the Pune plant upgrade has almost been completed, save for third party expert evaluation regarding the estimated maximum annual output capacity of the primary sintering kiln at Pune, which is anticipated to be received within the next 30 days.

These latest developments come on top of the United States Patent and Trademark Office (USPTO) recently issued patent protecting the intellectual property surrounding LWP’s lightweight flyash based proppants (Refer ASX announcement 8 March).

Management Commentary

LWP CEO Americas Dr. David Henson said:

“These are very positive results and further validate the potential commercial appeal and cost competitiveness of proppants that can be produced at the Hallmark JV facility.”

LWP Chairman Siegfried Konig added:

“The receipt of these latest test results is an important step for advancing the Hallmark JV and a necessary precursor to the upgrade and plant design. We are satisfied with the progress being made on the Hallmark JV, and continue to move forward with a number of key initiatives.

The recent decision by the USPTO to award LWP key patents covering our fly-ash proppant technology, coupled with demonstrations that we can deliver our products in a cost-effective manner, puts LWP in a stronger position to commercialize our revolutionary innovations.

LWP is also pleased to confirm that we are increasing our marketing efforts, as commercial negotiations with licensees and oil and gas contractors continue across a number of markets, primarily in the United States. The increased stability in oil and gas prices is driving greater inquiry and accordingly, we are stepping up our business development efforts in North America.

We look forward to updating shareholders on our progress in India and the United States as we progress key operational and corporate activities. We confirm that LWP is 100% committed to commercialising its proppants technologies.”