Video Links, page-2

To help everyone, particularly the newbies and those LT holders who read and watch HC but don't normally comment, I have constructed a virtual Q & A to highlight the main points presented in both Videos from the recent Conferences.

I have written the questions to frame the responses during the presentation. This first one is from Siegfried Konig's Video. The second post will be from David Henson's Presentation. Some responses are joined conversations (Marked with no's) but there is no editing of content.. All responses in this Q & A are direct quotations from the above Video presentations.

INTERVIEWER: Can you tell us briefly about the timeline of the Company and why there have been delays?

ZIGGY: "(1)Basically the Company, LWP Technologies has spent about 8 years and 16.5 million dollars to develop our technology. Now that we have got there and we have a fantastic product; (2)the trouble is that we find ourselves in a depressed Oil and Gas Market with the prices being very low and so, on the cusp of success, we are now thinking about what our alternatives are."

INTERVIEWER: LWP Technologies has researched and designed proppants, so then how would you define your company?

ZIGGY: "We're not a Proppant manufacturing company, we're a Proppant Technology Licensing company."

INTERVIEWER: What are the possible alternatives that LWP is considering and how diversified is the Company to deliver on its goals and make money for its shareholders?

ZIGGY: "LWP's Commercialization and Monetization opportunities: The first one is obviously to secure Offtake agreements for the Indian Joint Venture plant and we are out there talking to potential users of the production. On 20,000 tonnes a year our EBIDTA will be somewhere around 3 million on revenue of 5 and a quarter.

The next is to licence our technology to existing proppant manufacturers to modify their existing plants. And believe it or not a very, very small modification is required. They need a couple of extra silos. Potential prospects are both in the US and in China. We expect a one-off licence fee depending on the geographical area of 2.5 to 5 million dollars up front and royalties of around 10% of revenue. We want to clip the ticket, that's our business.

We are interested in talking to partnership opportunities, joint venture opportunities and we are talking to potential prospects in Australia, Canada, the Middle East, Canada and Mexico."

INTERVIEWER: The Company has come under some flack lately with certain mgt. decisions. What plans do you have in place to secure LWP's future and strengthen the shareholder base?

ZIGGY: "We have been around and like many in this room we bear the scars of mistakes we have made. Right now LWP's entire prospects rest on the Oil and Gas Industry which is speculative at best.

We're putting in a Plan B so that we can never ever fail. And no matter how long it takes for the oil and gas markets to improve we can utilize our technology for the good of LWP and its shareholders and I am focused on that because I am the biggest shareholder."

INTERVIEWER: The Price of Oil has affected everyone in the Industry, so is there a market for LWP's proppant?

ZIGGY: "Will the Oil and Gas Industry trend to go for the cheapest proppants to generate cash flow, will that continue? Yes..

And will the estimated 5000 wells in the US that have already been fracked so the EMP's can continue to hold onto their acreage; will that get fracced sometime into the future or will they all be dead wells? I think everyone agrees that they will be fracced when the oil pricing recovers.

So we believe that there's fantastic future for the proppant market and especially for our proppants because of our unique technology."

INTERVIEWER: With the closure of so many oil wells in the US can you explain why LWP's product will be an attractive alternative to ceramics and sand?

ZIGGY: "Everybody knows that the rig count in the US has fallen off the cliff however the output per rig, because of adaption of new technologies is up significantly.

You have a situation where a 1000 rigs drilling in the US is down now to 200 but they are producing 30% more as when there were 1000 rigs drilling. And the reason is the increase in proppant demand. The proppant demand just grew and grew and grew until last year. About 20% less sand proppants and about 50% less ceramic proppants.

Nobody is hardly using ceramic proppants unless they have to because of the cost. So working with ceramic proppants is expensive and difficult and in this current low oil price environment nearly everyone is moving to sand. Experts report that proppant demand will grow year on year 13.68% until 2022 but I can tell you that it's gonna be mainly sand. Mined frac sand from Minnesota or Wisconsin.

So our vision is that LWP's fly-ash proppants will become the dominant ceramic proppant and the standard for the industry because we've got the lowest cost proppant."

INTERVIEWER: LWP has recently announced a new lower cost proppant to match mined frac sand. Why did the company have to change tack when the first proppant was so well priced to compete?

ZIGGY: "For the purchasing manager of a particular frac job could be asked, Would you like to purchase 187 trucks of bauxite proppants or 112 truckloads of LWP proppants? That is the price advantage to consumers. However that market looks like a big savings but nobody is even using those ceramic proppants; they're too expensive. People cannot drill and frac and make money buying ceramic proppants. The market's gone away.

The operative word used to be conductivity. The maximum amount of flow of oil and gas getting up the well head, and therefore when we look at sand products, with different particle sizes because no-one would have dreamed of using 100 mesh size sand or 40/70 sand because the conductivity is so lousy. Now.... that is the main product being pumped down hole.

It is not about conductivity, it is about cash-flow and about getting gas and oil out of the ground, the cheapest way possible. Every conversation is now about price.

So here we are, having taken 8 years and 16.5 million dollars to develop our technology, and we find ourselves with a fantastic product and a market that doesn't want it! We developed our Brisbane pilot plant to prove scale up and we have proved that our technology can be scaled up.

INTERVIEWER: LWP has a plant in India in Pune. Can you talk about that?

ZIGGY: "We entered into a joint venture with a company in India that used to make ceramic proppants in Pune. That factory has been dormant now for 2 years because they cant sell what they used to make so it closed.

They put in their plant into a joint venture for 40% of the JV company and we agreed to put in 2.5 million dollars to scale that up from a batch plant to a fully automated 24/7 operation.

When we signed that deal initially the oil price was somewhere around $60 a barrel. LWP is not going to start manufacturing ceramic proppants in India and spend the money to upgrade that plant when it doesn't know if the product can be sold or for what price it can be sold. So what we did was, we negotiated two (2) additional conditions precedent into the agreement.

1) Is that oil has to be a minimum of $57US a barrel and has to stay there for 60 days.

We believe that whatever we make at those prices we can sell easily.

2) Additionally the other condition precedent is that all of the production, out of India, needs to be pre-sold one year in advance. If either of those CP's come up we go ahead and fix the plant, upgrade the plant."

INTERVIEWER: Finally, you mentioned that India couldn't sell its proppants so why will up-scaling the plant be profitable for LWP?

ZIGGY: The benefits to us of the joint venture are early cost-effective entry into the market. We know that our fly-ash proppants take 20 to 30 minutes to sinter. Bauxite proppants, on the other hand, require around 2 hours sintering times, that was Hallmark's experience, at significantly higher temperatures. A shorter sintering time and a lower sintering temperature means a huge reduction in energy costs to make those proppants. Commercial production in India allows us to showcase our technology to potential licensees."


Hope that has been helpful in updating everyone in a different format.