PROPOSAL

Merging ofTarblaster AS and ELLYCRACK ASwith Tarblaster as the overtaking

company

THE COMPANIES

Tarblaster and Ellycrack are two independent companies, but they share:• office• accountant and auditor• and use the same R&D institutions • • Board members, management and shareholders are to a large extent the same.

Tarblaster ASTarblaster is developing a technology for extraction and upgrading of oil from oil sand, oil shale and the like.

The first patent application in extraction and upgrading of oil from oil sand is granted in Canada and is pending in a number of countries. In addition two new applications within the same category have been filed.

As a result of the R&D, two additional patent applications are under preparation. The first is called SoundCrack and the second is called PlasmaCrack.

At present Tarblaster has invested about NOK 25 million in its project.

Ellycrack ASEllycrack is developing technologies for upgrading of heavy oil.

Ellycrack holds two patents on its VISCOSITOR process in addition to a patent on an electrical upgrading technology called EEC (Electrical Cracking and Conversion). In addition, a new patent named SandBlaster is under preparation.

At present Ellycrack has invested about NOK 35 million in its project.

Technologies

Industrialisation of the Tarblaster process

27/04/2010 Tarblaster AS – René Sass 6

EST

Tarblaster TB2Tarblaster TB2

• 100 kg/hr

• Located in Trondheim

• Including of coke regeneration

• For continuous operation

• Demo tool

• 100 kg/hr

• Located in Trondheim

• Including of coke regeneration

• For continuous operation

• Demo tool

Medium scale plant TB-X

Medium scale plant TB-X

• 100-500 t/hr

• 1st commercial step

• Located on site

• 100-500 t/hr

• 1st commercial step

• Located on site

Commer-cial plant TB-25

Commer-cial plant TB-25

• 2,500 t/hr

• Reactor

• 10m x 6m

• H = 25m

• 2,500 t/hr

• Reactor

• 10m x 6m

• H = 25m

Demon-stration unit TB3

Demon-stration unit TB3

• 1-10 t/hr

• Use of existing demo-tool?

• Proof of scalability

• 1-10 t/hr

• Use of existing demo-tool?

• Proof of scalability

R&D-Phase:Commercialisation Phase

Tarblaster AS

Client / Customer

ESTEST

• 6-10 kg/hr

• Located in Oslo

• For continuous operation

• R&D-Tool

• 6-10 kg/hr

• Located in Oslo

• For continuous operation

• R&D-Tool

Industrialisation of the Ellycrack process

26/04/2010 7

Demon-stration unit VXDemon-stration unit VX

• 200 bbl/d

• Located in Canada

• Including coke regeneration

• For continuous operation

• Demo tool

• 200 bbl/d

• Located in Canada

• Including coke regeneration

• For continuous operation

• Demo tool

Commercial plant V20Commercial plant V20

• 20,000 bbl/d

• Regenerator

• D=5m

• H=10m

• 20,000 bbl/d

• Regenerator

• D=5m

• H=10m

Medium scale plant V2KMedium scale plant V2K

• 2,000 bbl/d

• Proof of scalability

• Proof and demonstration tool

• 2,000 bbl/d

• Proof of scalability

• Proof and demonstration tool

R&D-Phase:Commercialisation Phase

Ellycrack AS

Client / Customer

Viscositor2Viscositor2

• 50 bbl/d

• Located in Edmonton

• R&D-Tool

• Mass and energy balance test

• Coke regeneration

Viscositor 1Viscositor 1

• 50 bbl/d

• Located in Trondheim

• Oil cracking reactor

• Experimental tool

• 50 bbl/d

• Located in Trondheim

• Oil cracking reactor

• Experimental tool

Consequences merged companies

• One company, one management• Free float of technologies• No internal competition• Reduced costs• Added value to the merged company compared to two stand alone companies• Faster exit through an IPO

The rationale for the merger • One company, one managementEasier to manage

• Free float of technologies between the companiesPatent situation clear and simple and patents can be shared and

internal competition is avoided.

• Substantial savings Reduced management costs, sharing of equipment and resources

• Added value to the merged companyHigher exit value of a merged company than two companies on a

stand alone basis. • Faster exit through an IPOIt is believed that a merged company can be listed on a stock exchange

within a three year period.

The rationale for the merger • Easier to finance and thus greater possibility to have the technologies developed and brought to the market

A merged company will make it easier to finance the company in the present financial market.

• Can later de-merge into smaller companies and increase the value.

It might be strategic to de-merge one or more technologies in order to increase the value of each or the company. Full freedom to plan the exit as it may beneficial for the company.

The rationale for the merger • Release Olav from potential conflict of interestWill eliminate any questions about which company new

technologies should be granted to.

• Reduced risk/hedgingAll technologies in one company. If one technology fails or takes

long time to realize, other technologies can be given priority, thus reducing risk

• Almost 100% of Tarblaster shareholders are Ellycrack shareholders

• Merging with Tarblaster means that Ellycrack will also be supported by the professional investor (Epi-V)

The vision of the merged company

New Tarblaster AS will be a “clean tech” company which is developing more environmental friendly and cost saving solutions for the heavy oil and oil sand industry.

Profile• Solidly funded company until exit• International experienced Board of Directors• Experienced management and engineering team• Profound knowledge and experience in oil

processing • Empowering environment for new ideas and

inventions within the company´s vision• Successful ideas are transferred into independent

projects and businesses.• Development of different projects in parallel

Time schedule• Formal Board meetings in both companies

June 2010•Extraordinary general assemblies and announcement to company register (Brønnøysund) with 3 months lead time

Second week in August 2010•Closing of the merger in extraordinary general assemblies

Mid November•Design of merged business plan

October 2010

Exchange

One share in Ellycrack will give one share in Tarblaster whereby Ellycrack´s shareholders will hold 30,83% and Tarblaster´s shareholders will hold 69,17% in the merged company.