Genoil Inc.www.genoil.net

INTRODUCTION & OVERVIEW

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• Decreasing supply of light, sweet (low sulphur content) crude and increasing supply of heavy, sour (high sulphur content) oil.

• Refinery system worldwide built around light, sweet oil.

• Increasing global oil demand growth (particularly in Asia) driving substantial investment in heavy sour reserve development and production volumes:

– Large scale heavy sour oil reserves in Middle East, Russia, Latin America

– Less significant reserves in China and Asia

• Tighter environmental regulations for desirable oil grades and sulfur content.

• Industry need for low cost highly efficient solutions to growing volumes of heavy sour production runs.

MARKET OVERVIEW

• Two most popular technologies for converting heavy crude into light oil

• Coking – removing carbon molecules from heavy oil

• 20% of product is converted to low-value carbon coke• Requires high temperature and pressure to convert the oil• Low desulphurization

• Hydrotreating / Hydroconversion / Hydrocracking – adding hydrogen molecules to heavy oil

• Produces a higher conversion rate because molecules are being added, not removed as in coking.

• Requires relatively low temperatures and pressures• High desulphurization

HEAVY-TO-LIGHT CONVERSION TECHNOLOGY

• Genoil’s technologies represent breakthrough and innovative approaches to existing oil and gas production or refinery problems. Genoil’s solutions can be readily integrated into conventional systems to increase productivity, at moderate capital and operating costs, thereby providing a rapid payback. Genoil currently owns numerous technologies and intellectual property that are protected under patents or patents pending. Genoil’s primary technology is the Hydroconversion Upgrader (GHUTM).

• The GHUTM is a proprietary upgrading process that converts low margin heavy crude oils, that are typically sold as ashphalt or heating oil, into ligther low sulfur crude oil that can be sold as gasoline and jet fuel. In addition to dramatically increasing the profitability, thru producing more barrels of useable oil, the Genoil process dramatically reduces the sulfur, metals, nitrogen, asphaltenes and heavy residuum of the crude oil.

• Genoil’s patented hydrogenation process converts heavy oil fractions into lighter fractions, resulting in a 15-20% greater output of light oil from refineries and significant cost savings, while helping a refiner meet worldwide government mandates for low sulfur and ultra-low sulfur diesel fuels that are needed to protect the environment. With global refineries running at capacity, together with finite world oil supplies the GHUTM technology could be one of the most valuable innovations of the century.

INTRODUCTION TO GENOIL AND GHU

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COMPETING TECHNOLOGIES AND THE GHU’S ADVANTAGES

GHU(Hydrogen Addition)

Competing Hydroconversion Technologies

Delayed Coking(Carbon Rejection)

Residue Conversion Up to 90% 65%-75% 70-85%

Temperatures Low/Medium Medium High

Volume Output 100-104% 100-104% 75-80%

Coke production 0% 0% 20-25%

Desulfurization (1) >90% >90% 37%

Hydrotreating Process includes hydrotreating Process includes hydrotreating Needs further hydrotreating

Capital Cost $ 7,000 – 12,000 per barrel $ 9,000 – 17,000 per barrel $ 8,000 – 14,000 per barrel

Equipment Fewer Processes Fewer Processes More Processes

Water usage 15-20% less than Coking or Air Cooled

15-20% less than Coking or Air Cooled

Natural gas usage Optional or None Optional or None Yes

IRR (2) 28% Unknown 18%

(1) Source: The American Oil & Gas Reporter, January 2006 / Genoil test results

(2) Source: The American Oil & Gas Reporter, January 2006

• Applications– Downstream – GHU unit installed in refineries, converts low-value

atmospheric and vacuum bottoms (residual product from refining process) into high value, light oil which can be further refined into high value consumer oil products, increasing production by as much as 15-20%.

– Upstream – GHU unit operated at oil producing fields, increasing value of the product, as well as, converting heavy oil so that it meets specifications of oil pipelines, without using the current expensive and wasteful process of adding diesel fuel to heavy oil to meet viscosity requirements for piping oil.

• Advantages– GHU operates at lower temperatures and pressures than competing

Hydroconversion technologies, which translates to lower capital and operating costs.

– The GHU produces higher conversion rates of the residual bottoms than competing technologies, and therefore a better return on investment.

– Lower Licensing and/or Royalty fees than competing technologies

GENOIL HYDROCONVERSION UPGRADER (GHU) - TECHNOLOGY PROFILE

DOWNSTREAM MARKET

GROWING DEMAND FOR RESIDUAL REFINING MARKET

Demands for high quality transportation fuels continue to rise, requiring additional crude processing or investments in residual upgrading

Global Consumption, Transportation Sector

• Refiners continue to search for ways to increase output capabilities and profitability:

INCREASING DEMAND FOR LOW-SULFUR CRUDE

Environmental regulations

of sulfur content in Gas Oil

2,000 ppm500 ppm

50 ppm 10 ppm

1992 1997 2005 2007

Source: EIA – Energy Information Administration

• Refining capacity worldwide not able to process heavy sour oil. • High sulphur crude can severely damage refineries built to handle sweet, light crude:

- Sweet refineries would require substantial and expensive equipment upgrades to handle high sulphur crude

• Need to meet WTI standards for crude imports to refineries.• Sour crude sells at a relative discount to sweet crude:

- WTI (API 39º, Sulfur 0.3%) = $ 60.85- Lloyd Blend (API 22º, Sulfur 2.2%) = $ 40.39 (Dec 29, 06)

• Heat is used to separate (vaporize) the different crude components (fractions) according to weight and boiling points in a distillation tower.

• Heaviest fractions with the highest boiling points and highest concentration of contaminants settle at the bottom of the tower:

– Sulfur, Nitrogen– Asphaltenes– Metals

• The heaviest fractions are called residuals – the bottom of the barrel.

Source: Energy Information Administration (EIA)Simplified Drawing of Separation

SEPARATION – HEAVY ON THE BOTTOM, LIGHT ON TOP

• Refiners face tremendous pressures to maintain profits, while:

Residual, low-value fuel supplies continue to increase as demand for residual fuels continues to decline

Refinery Crude Runs For Selected Market Source: Purvin & Gertz Inc. Regional Upgrading Report

GROWING NECESSITY FOR RESIDUAL REFINING MARKET

• Genoil’s hydroconversion upgrader can be utilized in refineries to:– Increase light oil production by 15-20 % (volume output)– Meet growing demand for low sulphur, light fuels– Increase the value of the oil – Increase refining profit margins– Desulfurize oil over 90% to help refiners to comply with 2006 environmental regulations– Increase buying power and profitability by allowing refineries to buy a cheaper, heavy crude

oil, while maintaining a light product slate

• Genoil’s global refinery market opportunities:– 13 million barrels per day of residual heavy oil can be converted into light oil for making

gasoline, diesel and jet fuel– Increasing flowage of heavy API feedstocks

• Bottom of the barrel management is increasingly important to maintaining refinery viability and desire to enhance feedstock yields will drive adoption of Genoil’s Hydroconversion technology

DOWNSTREAM REFINERY MARKET

UPSTREAM MARKET

• Production of heavy crude continue to increase:

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Diminishing supply of light sweet crudes is forcing development of heavier sour crudes throughout the world

Refinery Crude Runs For Selected Markets Source: Purvin & Gertz Inc. Regional Upgrading Report

GROWING NECESSITY FOR REFINING CAPABILITIES OF HEAVY, SOUR OIL

• Genoil’s hydroconversion upgrader can be utilized in heavy oil fields to:– Upgrade the oil to meet pipeline specifications (viscosity, sulfur)– Desulfurize the oil to above 90% – Decrease oil production and transportation costs: no need for expensive diluents

often added to heavy oil in order to move them to the pipeline– Increase the value of the oil

• Genoil’s hydroprocessing technology market for upstream heavy crudes estimated in 9 million bpd

– Increasing as more of oil discovered becomes heavy. – Markets include heavy oil producers in countries such as Venezuela, Russia,

Middle East, China, as well as the Canadian tar sands

UPSTREAM UPGRADER MARKET

FINANCIAL ASSUMPTIONS & BUSINESS MODELS

RISK ASSESMENT

• Technology Risk: Minor– Performance guarantee by Genoil, with optional conversion to the Genoil conventional upgrading technology

- by and on the expense of Genoil.– Proven technology with a functioning and scalable Pilot Plant and negotiations on the way for several full

scale projects world wide.– Favorable tests and studies by independent 3rd. Parties, Potential Investors, and Potential Clients.

• Commodity Risk: Minor / None– Collapse of crude oil & energy prices is unlikely and may be hedged.– Spread between heavy sour crude and light sweet crude is narrowing slower when crude oil prices fall, and

widening faster when crude oil prices rise.– When crude oil prices fall, the spread actually rises between heavy sour crude and distillates (diesel, jet fuel,

etc.) – as the spread between distillates and light sweet crude widens more, where the spread between light sweet crude and heavy sour crude narrows less.

– Regulation and emission rules around the world getting very restrictive, which will lead towards extinction of the market for residual fuels and collapse the price and spread between residual fuels and light sweet crude oil.

• Country Risk: Minor (Emerging Markets) / None (developed Countries)– Stable and lower risk in emerging countries than ever historically.– Risk further mitigated by the stable energy sector and high demand for the energy and oil markets.

• Sector Risk: None• Currency Risk: Minor / None

– Input, especially output and capital costs all or mostly in US$ or hard currencies.• Corporate Risk (Refinery or Producer): Minor

– Assuming a stable entity with proven refining or producing capacity, as a base for a GHU and economics of the business model.

RESIDUE & HVGO UPGRADING IN A REFINERY WITH GHU

RESIDUEGenoilGHU

9% Naphtha

22% Kerosene

48% Diesel

21% VGO

1,250 BPD Reside Feed Upgraded and increased to 1,443 BPD Product Refined:

327.0 BPD Naphtha $ 157.00 = $ 59,339264.0 BPD Kerosene $ 105.00 = $ 27,720618.0 BPD Diesel $ 105.00 = $ 64,890 234.0 BPD VGO + $ 30.00 = $ 7,020Recoverable Product Dollars = $ 150,696

Refinery income after upgrade and recycle of HVGO / Residue by $ 150,969 Dollars Per Day vs. $ 37,500 Dollars Per Barrel sold as FCC Feed or an increase of $ 113,469 Dollars Per day in income

Genoil GHUUpgrading

Facility

Per day Net Sales

SALES CRUDE UPGRADED IN GHU UPGRADING FACILITY100,000 BPD CAPACITY WITH SEPARATE CONDENSATE SALES

50,000 BPD Condensate

50,000 x $ 57.00 per barrelCan be used a Chemical Feed Stock vs. used for Mixed Export Blend

$ 2,850,000

100,000 BPD Heavy Crude

$ 5,200,000

100,000 BPD Upgraded Crude100,000 x $ 52.00 per barrel

Total Net Sales $ 8,050,000Less Operating $ 850,000Sales Less Expenses $ 7,200,000

Total Net Gain Per Day $ 1,800,000Difference between Mixed Crude Sales and Upgraded Crude sales based on 100,000 BPD

Operating ExpensesLess Operating Cost 4.00 per barrel $ 400,000Less Cost of Capital 2.50 per barrel $ 250,000Less Hydrogen Cost 2.00 per barrel $ 200,000Total daily cost $ 850,000

GHU RESIDUE UPGRADING MODEL - DOWNSTREAM(BASED ON A TYPICAL MID-SIZE REFINERY AND AVERAGE DATA ASSUMPTIONS)

% ANNUAL RETURN ON CAPITAL 49%Refining Capacity Barrels per day Barrels per yearRefinery Capacity 30,000 10,500,000Residue Feed Input 4,500 1,575,000Residue Upgrade Output 4,050 1,417,500

GHU CAPITAL COST $ Per Barrel a Day $ Per Project % of Capital CostCapital Expenditures (Equipment Only) -$8,000 -$36,000,000 -73%Initial, Eng, Construct & Install Expenditures -$2,000 -$9,000,000 -18%GHU Licensing Fees -$1,000 -$4,500,000 -9%Total GHU Capital Cost -$11,000 -$49,500,000 -100%

EXPENSES $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualResidue Feed / M380 $30.0 -$135,000 -$47,250,000Estimate Operating Expenses $8.5 -$38,250 -$13,387,500Total Expenses $38.5 -$173,250 -$60,637,500

REVENUE $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualResidue Upgrade / WTI $60.0 $270,000 $94,500,000% Input Output Volume Ratio Adjustment $60.0 -$27,000 -$9,450,000Total Revenue $60.0 $243,000 $85,050,000

EARNINGS $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualRevenue - Expenses $21.5 $69,750 $24,412,500

Operating Days per year = 350% Residue Feed of the Refining Process = 15%% Input Output Volume Ratio = 90%Crack Spread / WTI - M380 = $30.0GHU Refinery Lifetime = 18 years

GHU RESIDUE UPGRADING MODEL – DOWNSTREAM(BASED ON A TYPICAL MID-SIZE REFINERY AND AVERAGE DATA ASSUMPTIONS)

• Capital Investment = $49,500,000 Return on Capital (from development phase) = 4 Years / 16 QuartersReturn on Capital (from operational phase) = 2 years / 8 Quarters$ Annual Return = $24,412,500% Annual Return on Capital Investments = 49%$ Lifetime Return (18 years) = $390,600,000% Lifetime Return (18 years) on Capital Investments = 789%

4 YEAR PROJECTED CASH FLOW(Break Even Analysis)

$60,000,000

$40,000,000

$20,000,000

$0

$20,000,000

$40,000,000

$60,000,000

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GHU Cap Cost Capital Cost Cum Earnings Return

GHU HEAVY OIL UPGRADING MODEL – UPSTREAM/DOWNSTREAM(BASED ON A TYPICAL MID-SIZE OIL PRODUCER OR REFINERY AND AVERAGE DATA ASSUMPTIONS)

% ANNUAL RETURN ON CAPITAL 42%Producing Capacity Barrels per day Barrels per yearHeavy Sour Oil Producing Capacity 30,000 10,500,000Light Sweet Oil Output 30,900 10,815,000

GHU CAPITAL COST $ Per Barrel a Day $ Per Project % of Capital CostCapital Expenditures (Equipment Only) -$8,000 -$240,000,000 -73%Initial, Eng, Construct & Install Expenditures -$2,000 -$60,000,000 -18%GHU Licensing Fees -$1,000 -$30,000,000 -9%Total GHU Capital Cost -$11,000 -$330,000,000 -100%

EXPENSES $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualHeavy Sour Oil / Lloyd Blend (API 22º, Sulfur 2.2%) $40.0 -$1,200,000 -$420,000,000Estimate Operating Expenses $8.5 -$255,000 -$89,250,000Total Expenses $48.5 -$1,455,000 -$509,250,000

REVENUE $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualHeavy Sour Oil Upgrade / WTI (API 39º, Sulfur 0.3%) $60.0 $1,800,000 $630,000,000% Input Output Volume Ratio Adjustment $60.0 $54,000 $18,900,000Total Revenue $60.0 $1,854,000 $648,900,000

EARNINGS $ Per Barrel $ Per Capacity Daily $ Per Capacity AnnualRevenue - Expenses $11.5 $399,000 $139,650,000

Operating Days per year = 350% Input Output Volume Ratio = 103%Crack Spread / WTI - Lloyd Blend = $20.0GHU Refinery Lifetime = 18 years

• Capital Investment = $330,000,000 Return on Capital (from development phase) = 5 Years 1 Quarter / 21 QuartersReturn on Capital (from operational phase) = 2 years 1 Quarter / 9 Quarters$ Annual Return = $139,650,000% Annual Return on Capital Investments = 42%$ Lifetime Return (18 years) = $2,094,750,000% Lifetime Return (18 years) on Capital Investments = 635%

GHU HEAVY OIL UPGRADING MODEL – UPSTREAM/DOWNSTREAM(BASED ON A TYPICAL MID-SIZE OIL PRODUCER OR REFINERY AND AVERAGE DATA ASSUMPTIONS)

5 1/4 YEAR PROJECTED CASH FLOW(Break Even Analysis)

$400,000,000$300,000,000$200,000,000$100,000,000

$0$100,000,000$200,000,000$300,000,000$400,000,000

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GHU Cap Cost Capital Cost Cum Earnings Return

APPENDIX:

• Articles and additional information– Genoil in Energy Magazine– 2006 Tech Trends– Upgrading Heavy Oil Products

The statements made by representatives of Genoil Inc. ("Genoil") during the course of this presentation that are not historical facts are forward-looking statements. Although Genoil believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect Genoil’s business prospects and performance causing actual results to differ from those discussed during the presentation.

Such risks and uncertainties include by way of example and not of limitation, general business and economic conditions, decreases in demand for oil, natural gas and natural gas liquids, changes in our operating conditions and costs, changes in costs relating to differing quantities and qualities of petroleum products, the effectiveness of our technology, financing concerns and changes in the legislative or regulatory environment.

Genoil undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.

FORWARD LOOKING INFORMATION

THANK YOU FOR YOUR ATTENTION

Contact:David K. Lifschultz

Chairman & Chief Executive OfficerGenoil Inc.

2833 Broadmoor Blvd., Suite 120Sherwood Park, Alberta, T8H 2H3, Canada

Tel: (914) 393-5800Fax: (914) 373-3823

E-mail: dklifschultz@genoil.net