admin by Proton Technologies Canada | 3 May 2021
Topics:
Climate & Energy

Invest in a new green technology to produce hydrogen from oil fields

Important information

This is an equity project that is offered under the start-up crowdfunding registration exemption.

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Proton poised to produce hydrogen fuel in a potentially carbon-negative way from repurposed oil projects.

Proton poised to produce hydrogen fuel in a potentially carbon-negative way from repurposed oil projects.

Description of the business

Proton Canada is a private company located in Calgary, Alberta, Canada. It is looking to scale-up its patented technology licenses in Canada and the North Sea regions that could revolutionize the clean energy movement. By applying proven oil and gas methods, Proton's process allows for the production of hydrogen from existing oil reservoirs, without emissions. In broad terms, about 70% of oil remains in the ground after production. Proton uses this stranded resource to produce Hydrogen through its patented process license. Since the stranded resource provides the fuel supply for the creation of hydrogen, its technology could have widespread application across the Canadian and North Sea resource landscapes especially, but not limited to, heavy oil formations.

All carbon can remain down in the earth; never coming to the surface. This can be a very big solution for decarbonizing energy and reducing air pollution. Proton's plan takes advantage of existing infrastructure and expertise. Proton plans to be a long-term provider of low cost, carbonless energy.

What is Hydrogen and How is it Produced?

Hydrogen is a clean fuel and an energy carrier that can store, move, and distribute energy. It has the highest energy density by mass, and when used in a fuel cell, produces only pure water and electricity. Hydrogen is produced from water in two main ways which both need a lot of energy; electrocuting water (electrolysis) or high temperature reactions. Most hydrogen today is created using a high temperature reaction process called Steam Methane Reforming (SMR), where natural gas (methane) is burned as part of the reaction. Since hydrogen can be burned in various normal ways such as furnaces, hot water tanks, electric power generators, or used as a transportation fuel that makes no CO2, its increasing use is popular in places like Canada where carbon emissions are taxed.

Proton's Process - How Does it Work?

Proton's process has two steps:

  1. Heat the reservoir to release hydrogen, and
  2. Extract only pure hydrogen gas.

These are most easily done by injecting oxygen into an oilfield to release hydrogen and using downhole hydrogen filters that only allow hydrogen to come up to the surface. In this way, CO2 and everything else stays in the ground.

The Market - What can Hydrogen be used for?

Most hydrogen today is used at oil refineries and fertilizer production plants but now that the production cost of hydrogen is lower than hydrocarbon fuels like diesel and gasoline, it is getting popular as a fuel that creates no CO2. Proton believes the energy cost of hydrogen can be even lower than natural gas energy. Every year, trillions of dollars of energy are sold, and the world's appetite for low cost clean energy seems to be increasing. Proton believes big markets for hydrogen include:

  • Making electricity - by using hydrogen fuel in turbines, engines, or fuel cells
  • Fuel blending - for example into natural gas to reduce overall CO2 emissions
  • transportation fuel - in hydrogen powered vehicles
  • feedstock for the chemicals industry - fuel upgrading, ammonia, methanol, fertilizer production

The Business Model

Proton hopes to stimulate the economy through vast-scale production of hydrogen from re-purposed oil projects. All these new jobs and investment into the hydrogen patch are expected to be similar to jobs and investment into the oil patch but with significant upside since the process can leverage existing infrastructure such as wells, roads, powerlines, pipelines, skilled workforce and an underutilized well servicing industry. Proton feels poised to produce hydrogen fuel in a potentially carbon-negative way, which could be very popular among investors or governments that have expressed CO2 emissions reduction goals.

Proton plans to iterate through various milestones of increasing scope to gain experience for increasingly larger projects. The next on our list is demonstrating hydrogen production and sales to existing markets from Proton's field site near Kerrobert, Saskatchewan where hydrogen is already being created in modest volumes but requires intermediate infrastructure to get to market.

Proton is currently producing and separating hydrogen at surface in small quantities through its novel patented process of In-Situ Hydrogen Generation (ISHG). ISHG takes the thermal petroleum recovery technology of in-situ oxidation, but with a focus on producing hydrogen instead of hydrocarbons. This project is to demonstrate hydrogen sales through scaled up separation, storage and transportation, constructing larger sized hydrogen separation equipment, and purchase of a tube trailer for storage and transportation.

Project Outcomes / Deliverables

This project plan is to separate hydrogen from a gas stream from an oil well, and put it in a tube trailer. This can demonstrate storage, transportation, and hydrogen sales; a small but important step for showing a scale up path to customers and investors.

Phase 1 - Current Crowd Funding Round - $250,000

Large Scale Demo - Purchase & construction of hydrogen separation equipment based on engineering design $250,000

Phase 2 - Follow up Crowd Funding Round - $250,000
Purchase or rental of hydrogen tube trailer for capturing and storing separated hydrogen and building path-finder truck loading terminal at Proton's site; Transportation of hydrogen on tube trailer to be sold to negotiated party which have entered into sales contract negotiations.

Purchase of tube trailers and construction of loading terminal = $250,000

Total estimated project contribution from crowdfunding rounds = $500,000

Project Success

The success of these projects will be the demonstrated first sales of hydrogen to a negotiated end user from a novel patented hydrogen production process which would be a new revenue stream for Proton. Once demonstrated, we expect increased interest from customers, investors, potential licensees, strategic partnerships, and carbon offset groups.

Management and Founders

Grant Strem, Chair and CEO
Grant has always been interested in the earth. Concepts of philosophy, deep time, science, science fiction, methods of inference, and technological progress eventually brought Grant toward a geology undergrad degree at the University of Calgary. Grant worked within upstream oil and gas sector at companies like ConocoPhillips and Husky Energy before moving into reserves evaluation and banking. His general interest in science and space propulsion systems led him toward a strong technical appreciation of extreme oxidation processes. During his engineering Master's degree Grant took courses from Ian Gates, who years later became a Proton co-founder after many years of friendship since grad school.
Seta Ashfordi, COO
Seta Afshordi believes that a new clean energy era is overdue, and that this change should come from inside the oil and gas industry. She worked on a variety of heavy oil projects for Husky, CNRL, Athabasca, and Murphy Oil. Seta has a Master's Degree from Chalmer's University of Technology in Sweden on Environmentally Sustainable Process Technologies, and a Bachelor of Science in Chemical Engineering from prestigious Sharif University in Tehran. She was also a national-team badminton champion for many years and has a poodle named Trusty.

Calvin Johnson, Head of Commercial
Calvin Johnson is President of KE Risk Group. Prior to founding KE Risk, Calvin was deeply involved in TransAlta's trading business, and CIBC's Energy Derivatives business. Calvin has been assisting Proton since late 2018 and believes that Proton will play a critical role in North American hydrogen supply.

Professor Dr. Ian Gates, Co-Founder of Proton and Co-Inventor
Ian joined the Department of Chemical and Petroleum Engineering at the University of Calgary in 2004 after working 7 years in industry. He is a registered professional engineer (P.Eng.) and has consulted for small and large energy companies in Canada and internationally. Ian's current research interests are in heavy oil and oil sands recovery process design and optimization, thermal (SAGD and CSS) and thermal-solvent (ES-SAGD, SA-CSS) oil recovery processes, cold production of heavy oil with sand (CHOPS) and follow-up process design, reservoir engineering and simulation, reservoir process optimization, reactive reservoir processes and simulation, heat and mass transfer, fluid mechanics, biofilm evolution in porous media, and bioreactor design (think of the reservoir as a bioreactor). Ian laughs a lot and enjoys engaging discussions over breakfast or beer.

Dr. Jingyi (Jacky) Wang Co-Founder of Proton and Co-Inventor
Jingyi (Jacky) Wang P. Eng., is a research engineer in the Department of Chemical and Petroleum Engineering at the University of Calgary, specializing in unconventional resource recovery process design and numerical simulation. He holds a BSc degree in chemical engineering from East China University of Science and Technology and M.Eng degree in reservoir engineering from the University of Calgary.

Jacky has 10+ years of chemical and reservoir engineering experience with industry and in research, expertise includes thermal recovery, cold production, VAPEX, CO2 sequestration, hydrate recovery, reactive numerical modeling, EOR, and production optimization. He is a professional member with APEGA and SPE. Jacky also likes beer.

Equity Terms

Securities: Class E common non-voting shares of Proton Technologies Canada Inc.

Fundraising goal: $250,000 CAD  (Minimum of $100,000)

Price per share: $187.50 per share, based on pre-money company valuation of $206 million

Minimum investment amount: $1,500 CAD per investor

Maximum investment amount: $1,500 CAD per investor

Qualification: Accredited and non-accredited investors who live in British Columbia.

Closing Date: June 15, 2021

Invest today to create Clear Hydrogen and a Clear Conscience!

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