George Liszicasz - CEO Atul Nautyal - VP, Geosciences Greg Leavens - CFO, VP, Finance Andy Steedman - VP, Operations

Raveel Afzaal - Mackie Research Michael Mork - Mork Capital Ted Coburn - Coburn and Greenberg Stan Trilling - Credit Suisse Ted Coburn - Coburn Greenberg

Good day ladies and gentlemen. Welcome to the NXT Energy Solutions Incorporated 2012 year end results conference call. I would like to introduce George Liszicasz. Please go ahead.

Thank you and hello to all. Thank you for calling in today to this conference. Call been hosted by NXT Energy Solutions Inc. My name is George Liszicasz, President and CEO. With me today is Greg Leavens, our CFO and Andy Steedman, our VP Operations and Atul Nautiyal, NXT’s newly hired VP Geosciences. Our plan today is to provide a brief summary of our 2012 results and recent developments which will be followed by a question period. Please note that this conference call of course contains forward looking information. For which we know the standard disclaimer that such information is by its nature, very uncertain and therefore future results may vary from our estimates and assumption used. For anyone who maybe new to NXT story, we are Calgary based service company providing an airborne geophysical service to the oil and gas sector. Our proprietary Stress Field Director or SFD survey system can be used for identification of threat fields in the subsurface. The reservoirs may contain hydrocarbons or maybe just water. We don’t have the capability to differentiate the two. As of these applicable in areas in the early stage exploration tool to allow oil and gas companies to focus their exploration activities on the best leads or it can be used as a conformation tool in areas were (inaudible) has identified a number of traps. In both applications the goal is to mitigate the overall risk, time, cost and environmental foot print. As many of you know, 2012 was a record year for NXT and I’m very proud of our numerous accomplishments. I would however first like to give thanks and recognition to our clients, its employees, advisors, the Board of Directors for their effort in getting us to where we are today. And we want to thank you our patient and supportive shareholder to stand by us and finally see the realization of the two potential of this company holds for you. The road to success can often be longer and arduous as we feel we are definitely on the right path to achieving broader commercial success. NXT gained significant momentum in 2012 on several fronts with a highlight including expansions of operations and growing global interest in SFD. Sooner activity finally became much more global in 2012 with projects completed all underway in a total of six countries in three separate continents. Other than Columbia five of these projects represented a new market for NXT Argentina, Guatemala, Mexico, Belize, and Pakistan. We have record revenue of $11 million including our largest survey project delivered till today in Mexico. also want to mentioned profitability. The net income for the year was 2 million for our $0.05 per share basic. If Q4 is any indication then we’re looking at about $0.07 per share. Of course the larger the contract value is the higher the gross margin and profit will be. Due to our higher activity G&A expense increased to 4.5 million as well. Income percent our G&A expense was 3.2 million in 2011, so going from $150,000 in revenues to 11 million increased our G&A by 1.3 million; however, we should be able to continue to expand without needing new significant increases in additional G&A or capital equipment. We generated significant cash flow from operations of $0.8 million. Note that the total was 2.3 million before adjustment for the net changes in in the year end working capital balances. We also entered 2013 with a $2.6 million contract underway in Pakistan while this project was long time from onward the regulatory permits then actual kick off the flying comments the day after we arrived and was completely in country in about one month with the final result delivered our client in March 2013. We have now conducted SFD service for four national oil companies or NOCs. This is significant because NOCs are key to our growth as they own most of the unexplored land globally. The next topic I would like to talk about is growing the financial strength. We completed an equity financing in early 2012 and raised 2.9 million which significantly strengthened our balance sheet. NXT exited 2012 with a 5.5 million total cash as compared to only 1.5 million at the end of 2011. We have no outstanding debt and recognize the strong finances are key to being able to attract\deliver larger survey projects. Although we are not presently in the position to give definite financial guidance for 2013 to-date we have completed a $2.6 million contract in Q1. we anticipate delivering continued growth for 2013 and our objective is to significantly exceed our 2012 revenue record. There are no current plans to raise capital as we plan to grow organically. The number three topic I want to talk about is the addition of PEMEX to our client base. In 2012 we finally gained a foothold with Petroleos Mexicanos Organics, the national company of Mexico. And the key target prospect in prior years. the results of the 2012 SFD survey are very encouraging. For the past five months PEMEX has been conducting an extensive internal study, an evaluation of SFD survey results. This work consists of driving correlation between SFD recommendations and PEMEX’s existing geological geophysical and producing field data. A portion of their survey also included slides over the Gulf of Mexico Holdings and large seismic programs to enhance offshore applications for SFD especially in south tectonic settings a strong potential growth area for NXT. This work is imperative from PEMEX perspective in order to assess the potential for expanded use of SFD in 2013 and beyond. Furthermore, based on the internal study results, PEMEX and NXT are in the process of finalizing a joint technical paper which is expected to be presented at a large conference. They will be hosting in Mexico in early June. This paper real highlight; PEMEX's experiences in using SFD technology and include an analysis of how PEMEX designs sections of their 2012 survey as blind test to evaluate the capabilities of our SFD tool. This paper will be a significant milestone in gaining new exposure to EMP industry on the growing potential uses of SFD. We aim to leverage their SFD experience with other large NOCs in Europe, Asia, Latin America and also in Africa. And these players are also active in multiple regions outside their home countries. It is important to emphasize that the exploration landscape and the focus has changed significantly in recent years. The four major areas left for finding large hydro carbon accumulations and all of them require huge capital expenditure and time. For example, deep water exploration or reservoirs; associated with salt tectonics resource plays and frontier areas such as Arctic, Alaska. NXT is focusing on providing an alternative aspiration tool; to evaluate this highly capable intensive and time consuming high risk exploration areas with significant environmental concerns. And finally, as number four I would like to provide a short progress report on our intellectual property or IP and some of our R&D initiatives. In May 2012, as you recall we commenced an IP strategy retaining (inaudible) LLP a leading US patent firm. This process started with filing a provision of patent application in the USA. We are currently in process of final evaluation which components of the SFD survey system should be formally patent and what stage. Actually it's going to be worldwide expect for Argentina and Taiwan. In the fall of 2012 we retained Professor Arief Budiman, an applied engineering specialist at the University of Calgary to aide in developing a mathematical model for SFD. This model will allow us to explain SFD more effectively to our clients. This project is an integral part of our IP strategy as well as our ongoing marketing efforts. So what are the major goals of 2013 and beyond? Looking forward, our primary goals include, to expand our client base so that demand for our services become less cyclical. We currently are following up on potential interest including European NOCS for international survey in the South Asia region. We are also build on our strong result to tax and deliver for even larger survey in 2013. Track, the new market such as Brazil. We can build on our growing capabilities in deep water and soil tectonics which will be integral to, and not only to this market but also in the African continents. As many of you are aware we are continuously heading to our library of proprietary SFD data. With every new survey we fly, we also separately enhance our SFD data library which we hold for potential mutual resale. New initiatives are currently underway to monetize portions of this library starting with the extensive 40,000 long kilometers of SFD data we have in Columbia alone. On the investor relations front, we aim to continue building shareholder interest in the NXT story. In 2012 we achieved significant increases in trading volumes for NXT shares. Following our extended results for fiscal 2012 we are in the process of finalizing a potential move to the TSX with the aim of gaining access to an even wider investor base. We are also proceeding with the expansion of operating capacity. This one is a much broader issue and has several components. We recognize that the industry demand for SFD services grows. We must ensure that we have the capacity and the capability to continue to deliver timely and high quality services to our clients. Three key focus areas will be training and the expansion of interpretation and geophysical themes. Two, developing the capability to conduct simultaneous surveys in different continents for example, and increasing our sales and marketing capacity. Progress is being made on each of these fronts. In April we hired Atul Nautyal an experienced well respected geoscientist as Vice President of Geosciences. Atul will be a key in growing the capabilities of our geosciences team, in improving our process of marketing and delivering quality results to our new clients. Our new network of international sales agents now includes representing key market such as Mexico, Columbia, Brazil, Bolivia, Pakistan, India and the Mediterranean and Palma. We are also pursuing the opportunities in China and effectively recruiting regional managers, sales managers, especially. We currently have two separate SFD data revision systems and are continuing to expand our inventory of SFP sensors. Aircraft availability is not a constraint at this point, as we can gain access to multiple survey aircraft through our strategic aircraft partner. And this capacity can be quickly increased if required. We have a lot of pride in what NXT has achieved in recent years and at tremendous pace that we finally are approaching the tipping point, in realizing the exploration potential of the SFD technology. And on that note, I would like to ask Atul which we welcome aboard, perhaps you could offer a few words on your initial exposure to this company and the technology.

Thank you George and good afternoon everyone. I will start off with bit about myself. I’ve worked in the oil pads for over 25 years and have been involved in geophysics for nearly 30 years. Most of my experience is with seismology which is considered by some to be the gold standard to be measured against for exploration methods. I have also used aeromagnetic and gravity for a variety of projects. During my professional career I have been fortunate to be directly involved in the discovery of nearly 300 million barrels of oil and 10 TCF of gas. That’s worldwide and in conventional and unconventional plays. I have also been involved with the technical aspect of geophysics through data acquisition, processing, interpretation and research. I first heard about NXT some years ago and like many of my exploration colleagues, I quickly dismissed it as a black box after a cursory review. However, when I was approached for this position, I decided I needed to take a closer look with an open mind. What I discovered was that there was a considerable amount of empirical evidence to support SFD but that the technical basis was not well communicated. Once I realized then I was thinking about the technology from a very conventional physics point of view while George was talking about something completely different. I became very interested in the potential of what we are doing here. I think NXT is developing a revolutionary technique which could have a significant impact on the ocean process. Where I see my contribution at NXT using my global experience and expertise and exploration in order to bridge the gap between what we are doing and what the exploration community proceeds, that is I understand the language of exploration and geophysics so that I can work towards aligning our efforts internally with what is required by our clients. That’s my brief speech for now. I'll turn it back to George if there are questions.

Well said. What that I thank our listeners for your attention and we would like to now open the discussion up for a brief Q&A. We ask that you please clearly state to our moderator your name, your city location and any firm that you are with.

(Operator Instructions). We have no question at the moment. We do have a question; our first question is from Raveel Afzaal from Mackie Research. Please go ahead. Raveel Afzaal - Mackie Research: That’s very strong Q4 results and great profitability margins. I have a few questions for you, first of all, if you offer me a little bit more color on conducting sales simultaneously what was that require, does that mean that you will have to build more data set because you already have two datasets sensors, so a set of sensor so what does that require conducting sales simultaneously.

I assume you meaning survey simultaneously, not sales simultaneously. Raveel Afzaal - Mackie Research: Yes, surveys.

It’s important to understand sort of the constraint or capacity constraints of the company in terms of the survey even by conducting with a single aircraft and doing one survey at a time the company can grow very, very significantly that the amount of survey system isn’t a large constraint right now. It could grow with revenue five times without having to do simultaneous surveys. But with that said, in order to do them, there is some additional personnel that we would require to when we put the system so that we actually have multiple people in the field but that is something that can grow very quickly and easily within that constraints of when the requirements arrives. Raveel Afzaal - Mackie Research: Okay. So, it’s only adding more personnel, that’s all that’s required.

Yes. The actually systems exist and so it's just in terms of operators the people actually in the field and we just will add those personnel as required. Raveel Afzaal - Mackie Research: Okay. And based on your experience that infrastructure that you have in place right now first in terms of the interpreters that you have and then in terms of defenses that you have, how much do you think you can grow the revenue? You said 5 times from current levels. Are you talking about the 2012 revenue numbers of about 50 million is that what you’re talking about.

Okay. There are two components, the acquisition components and interpretation components. I want to be clear that there are two separate constraints and those are things that we’re working on to ensure that we can scale and meet the demand. Without the growth of the team any larger we think that we can easily manage revenues in the $30 million range. We are also as part of the process we have an ongoing training program and we are adding people as required to expand that capacity. So, what we think as we grow we’re going to be able to have those resources added in the appropriate time frames. Raveel Afzaal - Mackie Research: Could you add a little bit more color to George's comment regarding monetizing the data library that you have, how do you intent to monetize the data library that you already have?

So the data monetization can happen in a number of ways that we’re working on. One is very simple method of selling the data to a client and there has been a number of things that we’ve been working on from that perspective. The other thing is you could take that same data library and you could use it as an asset that's vented into another entity for example that wants to use that data to explore with and as a result of that you would get potentially any range from royalties to an equity stake in a third party entity.

It is in line with our vertical concept, vertical expansion cost. Raveel Afzaal - Mackie Research: And my final question for you, could you give us a little bit more color on your follow-up discussion in South Asia especially in Pakistan, now that your survey has been over there?

Okay so the survey results there were received very positive reception that we had from our client there which is one of the two national companies in Pakistan and the one is called Pakistan Petroleum Limited, we delivered results and they right now in the process of doing in integration with other information they have and the results are very encouraging. They have been vocal and the markets are being very supportive of the results and from that we are now working with a number clients there that are in the process of defining areas that they’re actually interested in doing surveys we have issued a number of quotations already since that the results have been delivered as well as we’re also working with the government there in terms of the permission of using tool like SFD as part of acceptance into the work commitment model for the ENP companies and this will help them make it easier for them to do surveys doing forward. So, results there are very-very encouraging and we’re hoping that in the coming months we’ll have announcements regarding work with our clients there.

We have no questions in the queue at the moment. We do have a question from Michael Mork from Mork Capital. Please go ahead. Michael Mork - Mork Capital: My question revolves around the more expansion on monetizing the plays. It will make sense but and you are still small you can have 5 million on the bank but at what point would you feel comfortable? you just seem like you have this plane that can do frontier exploration that is in a hanger. it just seems like at some point when you have $10 million or $12 million in the bank you could take like a 1 million or 2 million of that and do you own frontier exploration maybe helping down you last pipeline Alaska the Northwest territory et cetera and try to find another big elephant on your own and you would be really in the driver seat then. I just wondered is that on your radar some place?

Hi Michael this is Atul. Michael Mork - Mork Capital: Yes.

That certainly crossed our minds that we would once we have got the cash in hand to go ahead and essentially try to high grade an area with high potential. the idea there would be we would probably be seeking partners who have the expertise that in the drilling and development phase of it but we would certainly be able to provide the information on getting the early stage exploration in and then build something around that and perhaps we are going to have to work towards our equity portion or something of that sort carried interest. personally I would have a concern about if we had a working interest where we would be doing that. we do not really want to do that. Michael Mork - Mork Capital: Right I understand that completely. you want as little risk as possible. Your only one upside royalties are…

Correct. Michael Mork - Mork Capital: Or whatever but you do not want to spend your money there. but it just seems like the SFD is so unique you have basically something nobody else has and you should be able to exploit that with very minimal risk.

: There is also another aspect to your question Mike and thank you for asking questions, and that is that at a certain time in our lives when the technologies’ acceptance is particularly after the paper that is going to come out early June, we are going to make significant effort to see if there is a possibility for us besides monetizing the existing data to do some spec surveys as other companies do with accepted technologies. so that's another aspect, another opportunity that we would like to explore. the only caveat there is that unlike in seismic where you can do a quick inspection of the quality of the seismic and the data and so on. In this case you have these boxes there that tells you exactly where you should conduct your exploration so we need to find a way around that and maybe; that's basically what I would like to add to.

Our next question is from (inaudible) from Credit Suisse. Please go ahead.

The thing that is most unique to me; I really like an answer though; your technology is been around for few years and what happened. What happened that all of a sudden during '12 you go from a $150,000 in revenues to $11 million in revenues? What was the tipping point? what made the non-users become users? Was there anyone event or was that a combination of a lot of things?

George asked me to handle that one Stan, it's Greg Leaven speaking. I think it's really the combination of a lot of things that have happened over the last three years. We certainly hope that we continue to build on that expansion but there is several individual things that have happened over the last few years. One we could point here is that the exploratory cycle itself is very long. As on the years from what you have an initial activity such as seismic or flying survey to the eventual drilling and therefore proof of concept of the exploration idea. Our early surveys in Columbia in 2008, 2009 period are now starting to obsess on pass the normal asset were identified at the time. So, those results are quite encouraging and we are building on that. There is also things such as scientific research by independent bodies like the joint Quantum Institute at the University of Maryland that is aiding in new industry acceptance of novel quantum type technologies. We also have been doing things in the recent years such as republishing technical papers that we used at International conferences. We had attended one in Indonesia, in early 2012 and that is helping to add to our sales process momentum. I think lastly you could say that commencing our IT process, which we started last May that has been instrumental in aiding customers such as PEMEX in deciding to utilize SFD as we have been able to get them or wholesome type disclosure of what it is we are doing.

: I would like to add that in 2011, we also won the best innovation award at the Latin America Oil & Gas Conference. So those events collectively contributed to a wider acceptance of the tool between 2009 and 2012.

I have another question. Going back to your monetization of your library of data, a lot of the data that you have was from things you have flown for NOCs, is that correct?

: Yes.

Well, well if it’s flown for NOCs, is that a marketable commodity for the buyer for data that you’ve flown for NOCs?

: Okay, let me explain it. So the first thing is when in flight surveys we have target areas, target lines that are for the clients and that client can be a small company, or large company, NOC or whoever the client is. So we have that data that we acquire for them, they are not proprietary and that’s theirs. We would also have in and how the data library is being developed is while you are doing the survey flying to and from this particular target area we acquire data. That data is owned by us. So from that perspective, that’s where the data library is being created.

They are separate libraries?

: Yes, they are separate libraries. And the other thing that’s important I think what you’re getting a question, if it’s NOC are they the only customer in that particular market. And answer to that depends. So if you go on to market like Mexico, (inaudible) in our country. So any additional data that's gathered, the only customer you could sell it to is PEMEX. I mean countries like Columbia or Pakistan the NOCs own blocks of land just like other independent companies do and that data could be marketed to anybody.

Okay great, and Greg, how long you think it’s going to take you to move to the TSX and any plans to get the company on the regular NASDAQ here in the U.S.?

: Two answers to that. I guess number one, we are just in process of getting our applications to the TSX, final release now. We need to have an audited yearend results to meet their certain size and site test criteria. So that’s ready to go now. Probably it will take anywhere from one to two months we guess. One of the things they say, they consider as part of their application process is market capitalization and trading volumes. so that's something that may take a little while for them to review. With respect to the U.S. a U.S. listing down the road, we certainly want to the TSX1 first, make sure we can do that. With the U.S. they have, there is different criteria there, the main one being a stock price test. previously on the NASDAQ it was $4, I understand that now just recently they've reduced it to $2. so we haven't been able to meet that threshold as yet, but as we continue to grow hopefully our share price grows with that expansion and we will consider doing the U.S. application once we get to that level.

Okay thank you, and I got one last question then I'll get back in the queue. Can you elaborate a little bit on what the correlation study that you're doing with PEMEX, could you explain specifically why this is going to be earth shattering, not earth shattering, but why is it going to be so important to the company?

: So there's a number of reasons why it's important to the company. Generally speaking when you do work for customers, clients, they keep everything to themselves and they don’t publish results, they don’t give results, so when people say how did you do compared with, can you show me results from another client, the data and the information is proprietary so it becomes very difficult to actually show them the actual results. What happened with the work that we've done with PEMEX is they did two things. They put us in an area or in areas where they had tremendous amounts of data but in advance of the survey they gave us none, so basically that was to test the data and see how it works, as well as they put it in areas of new exploration so they say assuming that area one works well, then we've got new areas that we can explore in. So then what they did, is that they took the data and they've gone through a huge process of evaluating the data compared to the vast library of information they have. And from that we've got results and correlations et cetera with many, many, many examples and those examples can then be once it's presented in a public environment, those examples can then be shown to other clients and those other clients can then say okay I understand this is all the work that a very-very large, NOC, that's the fourth largest in the world get with SFD and give them much-much more confidence in utilizing the tool in the future.

Will that data show a percentage correlation, it means how defined will this correlation be?

: To get to that stage, you are going to have to wait till June.

Our next question is Ted Coburn from Coburn and Greenberg. Please go ahead. Ted Coburn - Coburn and Greenberg: Couple of questions here, one is trying to get my hands around your story, first up congratulation on the banner here but what is a typical I mean if there is no such thing but what is the sale cycles in other words from the first time that you meet or expose to an account if it’s going to run a successful course to being engaged, how long is that?

Naturally I have to see that it varies, I will give you an example. From PEMEX, we were first introduced to them in December of 2011. They told us that they were interested in doing something in the spring and we started serving in late August. so that was about eight month cycle from first exposure to signing. I would say that that is sort of it, from an NOC that I would describe that cycle as probably short. When we first went to Pakistan it was probably about a year and a half sales cycle through first introduction to signing. Argentina is much shorter than that. So the cycle varies but the other things sort of it that the six to nine months cycles would be average. Ted Coburn - Coburn and Greenberg: So, if it’s six to nine months so for example right now how many different accounts do you have and recognizing you don’t get to win them all unfortunately but how many today, if you just freeze dried it and took the photograph of it, whatever. How many accounts today are in process?

: In process today would be somewhere between 10 and 20, the exact number for that, somewhere between 10 and 20. Ted Coburn - Coburn and Greenberg: And, in terms of your harvest rate of those?

: Our harvest rate depends because it’s getting much better now than it was a few years ago. Ted Coburn - Coburn and Greenberg: Yes. Maybe you don’t have enough data to suggest that.

: I think he does, he just cannot say. Ted Coburn - Coburn and Greenberg: So, then I’m asking good questions.

: We cannot disclose such information at the moment, we are in active negotiations. Ted Coburn - Coburn and Greenberg: No, no. I understand but I’m just trying to get a sense for A sales cycles, because I haven't attached it to revenues but A sales cycles and I guess one other question I have along those lines is the reason you have 10 to 20 versus 20 to 30 is that based on a depth of resources that you have or is there a strategic or tactical reason to have that specific number that are in play at this time.

: You described it as there is a mix and one of the key things is that in order to for company of our size, in order to succeed you have to have focus. You can't just say, willy nilly, I am going to talk to everybody as well. And if you said, that you’ve talked to 50 guys, I can answer that question, yes we have but I don’t want to say that we’re talking to 50 guys and have an expectation from that because everything is in various stages of the process itself going through the sales cycle. We are, as George mentioned earlier, we are actively recruiting agents as well as we’re actively recruiting regional sales managers and when I say regional sales managers that we mean people with geophysical degrees and sales in market sales experience to help grow and expand on that particular sales funnel et cetera. Ted Coburn - Coburn and Greenberg: Okay, thank you. And it seems like you’ve got some wind in your sales at this point that should be make this quite exciting. If I may ask one more question at this time of a tool, and I think I heard that you were there, if you could just lay out briefly having looked at your background experiences and domains of expertise, I understand that the technology that’s involved here with SFD is in the quantum physics and it looks like your background isn't quite in that, what is it that drove you to the company? in order words what was it compelling about NXT that with your background competencies and expertise led you there?

: Right and that’s a good question because like I said initially being an exploration type, that makes me relatively conservative and stogy in a lot of ways. so you know as explorations, we don’t like risky ventures but that’s the nature of most of our business. What I found was as I said I initially curiously I looked at it and I said, Black Box and walk away. The opportunity that, what really got me to start looking at it much more closely and drove my mind was conversation with George and what I got out of that was the amount of effort and passion and some surety that he has brought to this endeavor. I was really impressed by that. I also then started looking in further and meeting the rest of the team, the interpreters, Greg and Andy, and everybody shown a lot of commitment to this, so I thought okay you know I’ve been thinking about this problem as most of my colleagues do. we are embedded in Newtonian Physics that’s what we understand about straits, we love using seismic curve, it’s what we understand and we kind of do a little bit of gravity and aeromagnetics here and there. Then talking with George, it was okay we’re talking about general relativity and quantum mechanics, so right off the bat my mind is blown and I’m wondering wow what is going on here and maybe oil exploration, conservative but I’m a scientist, so I like finding out what’s going on. so I just had to look at it a little more closely. what was interesting to me was that there is always some typical evidence and that’s what you’re asking and Stan was asking about, well what’s the correlation that we’re seeing here for example PEMEX. Well I looked at a lot of their dataset and there to me as an explorationist I’ve got say, well there is something going on here I don’t have a good explanation for it and I’ve got to find that explanation because that’s then getting everything, the whole cycle explained. we have got observations. we need to develop our theory much more thoroughly so that we can say this is what you can expect to see. as soon as we do that we have got a proper working theory that adds a lot of credibility to what we are doing. For me that's really exciting. if we can really show that we have got the right technology for this where we are bringing an extra bit of information that you cannot get from any of the other methods that we are using, we are going to minimize that risk. So to me we are on the cutting edge of bringing in something new here. We do recognize the areas that we need to improve on and what I got out of all that stuff was that maybe I was thinking about it the wrong way. I was thinking very conventionally from Newtonian physics and what I have got to do is have a shift in my own way of thinking about it to really ask questions. A good scientist can’t ignore the observations just because it's not convenient or I can’t understand the physics just yet. Nor is it great to just accept a Black Box. so in that sense this is a really interesting project where we are trying to bring all this together and hopefully we do it right and I think that's going to be a great value add to the exploration process for our clients, for everybody here on our team as well as our investors. I thought I might just add something about your question about the cycle for the closing of the sales and it goes back to one of Stan’s question on why is PEMEX so important. yes there is the paper but what we are seeing out of that is while it is not an endorsement of our method, it is perhaps the first acceptance that is being published of what we are doing and that acceptance may open the door to heat up that cycle of first contact to signing the next contract. So that maybe part of it there as well.

: And also it portrays the various applications of the tool that can be transferred to Africa and (salt basin) and so on.

: Just that we do have data over the Gulf of Mexico and it does extend into the salt basin province so a natural application is of course the Gulf of Mexico we see it there then you can take it to offshore Brazil and the analog to offshore Brazil is of course West Africa where we have been doing a lot of exploration for many-many years. So it opens up a lot of new areas.

I just would like to add; it took about six months or two to get comfortable.

Our next question is from Jonathan (inaudible). Please go ahead.

Very Interesting about your SFD technology and (inaudible) prospects 10% of cost. I don’t understand this technology compared to the (inaudible) can you explain little bit, why you can do such a wonderful good job.

Right, Jonathan this is Atul again. Seismic is usually predicated on that we have got some understanding of the geology for we design our programs to be optimized with what we think the target is going to be. There is a lot of upfront work that actually goes into that and since seismology is a typically on land or marine but in the land case what we find is there are lots of environmental concerns. There are lots of communities that have concerns about the oil industry and it turns out that we actually have a lot of lead time to get our projects going and it also costs quite a bit to make sure all the environmental work is done, (inaudible) also that we have got good community buying. When we do seismic, it's very important for us to maintain very good relationships with the folks whose neighborhood we're working in because if we do a bad job we are going to not be allowed back in. Seismic has all sorts of costs associated with it. But on a line kilometer basis, you can shoot seismic data in Alberta here for about $4,000, $5,000 per line kilometer in cases where it's very expensive but when you get overseas what you end up with is you may be looking at $26,000, $30,000 per line kilometer depending on what the concerns are. Now that’s what causes a lot of delays as well. Once we have got all the initial work done, shooting a seismic program can take two or three months, it's just the logistics of moving geophones and have that works whether its 2D or 3D. Now in contrast what we have with SFD running that jet aircraft flying at 10,000 feet at approximately 500 kilometers an hour and we've got all our sensors mounted on board. While we don't have to worry about environmental concerns, we’re going to leave a vapor trail, but we basically are not going to be running down the rain forest, we're not going to be crossing into people's backyards, we don't have to offend any communities when we fly, also at that altitude we don't have to worry about surface to air missiles usually either in areas that are of concern. we do have places where seismic, these are all very dangerous things. So we're able to then mobilize fairly rapidly fly our mission and in fact some of the interpreters are right there as we're flying and they are interpreting and taking note of interesting anomalies as we go. So when the data comes back here to Calgary, we are then getting several interpreters to look at it independently, so that we reduce the bias that we may bring, and then bring all of that together so that we've got greater confidence in what we're doing. So when you're just flying an aircraft and we've got mobilization, permits, et cetera, those are all relatively inexpensive, you have to do that with seismic as well, but it allows us much greater mobility and the reduced cost and in the end a quicker turnaround on the interpretation.

Right, Jonathan this is Atul again. Seismic is usually predicated on that we have got some understanding of the geology for we design our programs to be optimized with what we think the target is going to be. There is a lot of upfront work that actually goes into that and since seismology is a typically on land or marine but in the land case what we find is there are lots of environmental concerns. There are lots of communities that have concerns about the oil industry and it turns out that we actually have a lot of lead time to get our projects going and it also costs quite a bit to make sure all the environmental work is done, (inaudible) also that we have got good community buying. When we do seismic, it's very important for us to maintain very good relationships with the folks whose neighborhood we're working in because if we do a bad job we are going to not be allowed back in. Seismic has all sorts of costs associated with it. But on a line kilometer basis, you can shoot seismic data in Alberta here for about $4,000, $5,000 per line kilometer in cases where it's very expensive but when you get overseas what you end up with is you may be looking at $26,000, $30,000 per line kilometer depending on what the concerns are. Now that’s what causes a lot of delays as well. Once we have got all the initial work done, shooting a seismic program can take two or three months, it's just the logistics of moving geophones and have that works whether its 2D or 3D. Now in contrast what we have with SFD running that jet aircraft flying at 10,000 feet at approximately 500 kilometers an hour and we've got all our sensors mounted on board. While we don't have to worry about environmental concerns, we’re going to leave a vapor trail, but we basically are not going to be running down the rain forest, we're not going to be crossing into people's backyards, we don't have to offend any communities when we fly, also at that altitude we don't have to worry about surface to air missiles usually either in areas that are of concern. we do have places where seismic, these are all very dangerous things. So we're able to then mobilize fairly rapidly fly our mission and in fact some of the interpreters are right there as we're flying and they are interpreting and taking note of interesting anomalies as we go. So when the data comes back here to Calgary, we are then getting several interpreters to look at it independently, so that we reduce the bias that we may bring, and then bring all of that together so that we've got greater confidence in what we're doing. So when you're just flying an aircraft and we've got mobilization, permits, et cetera, those are all relatively inexpensive, you have to do that with seismic as well, but it allows us much greater mobility and the reduced cost and in the end a quicker turnaround on the interpretation.

: The only thing Jonathan I would like to add, this is George, is that the seismic program that Atul was talking about is a small one. So when you can do from beginning to end a seismic program that is three months, then it's a very small 150 kilometer seismic program, you can have thousands of kilometers, I'm talking about a jungle here where you're required to shoot seismic and then that takes basically years to get it to the stage that you can shoot it.

: George has brought up a good example, the jungle. In many areas there's absolutely no accessibility to looking at some of these frontier areas. You're going to have to have either, basically you have to have an airborne method so that would make gravity, gradiometry, SSD, these would be the technologies that you would apply in those places. What you would get out of gravity information is of course there are density variations so you can get information about anomalous structures but with SFD you would get information on fluids as well and that would help reduce that risk again and that's what we're all about is reducing risk and exploration. so if I can say, I've got a structure, it's got to find that excess, maybe I'll use gravity and gradiometry for that, I should get that information from SFD as well on the finite size but I'll also get my anomalies responding to the trapped fluids there, which of course if it's not so good it's water, if it's good we're going to have oil and gas, so we got additional data. Areas where this would be really useful, Papua New Guinea, Borneo, people are exploring in these places, it's going to be amazing if they get any seismic shot, and if they are going to incur the expense of seismic, I think it's much better that they have something like SFD to help them with at the early stage of exploration. Anything else, Jonathan?

(Inaudible) technology so good why, you know this technology has been around for several years. And why major oil companies did not use this technology fast or if they're able copy your technology and use it on their own.

It’s Atul here and I'll give you an analogy, I've got my own thoughts on that. Of course I've mentioned that oil companies and exploration types were very conservative. we prefer things that are tried and tested, that's our first position. And seismic is the gold standard for the exploration method. Imagine this, I know that the notion is that seismic is wonderful and it’s great and it is I've been part of that industry for a long, long time and used it extensively. But think about this, if a hundred years ago I came to said, I can build a sensor that can detect vibrations in the earth that come from about a mile down and find you oil you'd say I'm crazy, that you can't do it. Let's go back even more recently 50-60 years exploring in Western Canada, we started using seismic in analog form, not even the digital from that everybody's used to today where we've got a huge amount of information. But when we did analog data, we had what's called single fold, we couldn’t do any of the fancy processing that we do today and yet in Western Canada I think there were 50 odd wells that were drilled that were dry looking for (inaudible) grease , using seismic before the right one actually was discovered, still using seismic and in that case what happened was people identified the wrong formation but it looked to anomalous it so we drilled it and we found a deeper formation which was the (inaudible) which really western Canada what it is today. Now, suppose I am an oil company at that time and I did not adopt that technology, thankfully many did, but that technology was if you failed to do you were not found trillions of barrels of oil, neither would you have made hundreds of trillions of dollars. but the thing is that progress in seismic isn’t just a matter of 10 years or even 20 years. We developed analog seismic in the 40s and 50s based on principals from world war one, a triangulation. So we developed our reflection methods and 40s and 50s using analog along came to 60s with the digital revolution, we started digitizing our data and all of sudden we could acquire a more data, process it, turn it around faster. Now even with the adaptation and acceptance by the industry and something that was clearly the right thing, it's taken us from perhaps the late 40s until I would say early 2000 before everybody was really on that seismic band wagon. I can remember I interrelated seismic on paper in the 80s, we finally got work stations in the late 80s, early 90s so when you think about what we were doing today in seismic it’s a very recent thing and the development of that has come with billions if not trillions of dollars of investments. Why do large companies not just jump on what we are doing, well if you have invested trillions you are probably going to stick with what you know? We think we are working on something that revolutionary. We again have got empirical evidence that supportive of what we are doing. We need to do a better job on developing our theory, we fully understand that and that’s where the part of the communication with the exploration communication really has to be improved on our part, to get them to listen to our story, we need to get our stuff in line a little bit better and I think we will see a better adaptation or acceptance at that stage. PEMEX is just the first step, so that’s the really good question Jonathan. I just think it has to be looked at in prospective of how long the goal standard has taken to develop and how much has really been invested in that and no one is going to easily go against the status quo...

Thank you very much. And last question is that if there is any major drawback of your SFD technology and if without drawback and why not you increase price 100%, your cost are so low and even if you increase price 100% it’s pure beneficial to the clients, right.

: Yes. I can answer some of the questions, one of the drawbacks we have is certainly we cannot tell the depths of the target, what’s depths of the anomaly and that’s something that if we do our research work a little bit more, we can try to start forward modeling and saying here is an earth model that has a reservoir at this, what does the signature look like there and start developing the understanding for that. Right now, our pricing is very competitive and part of it is why can't we just increase its 100% or 500%, it’s still going to be very cheaper than seismic. But there are other methods in gravity and gradiometry which fly at rates that are probably comparable to our own and those are on densities, they are detecting density normalizes. So when you talk about airborne methods, right now we're generally accepted on the other hand other methods that do also measure gravity that are accepted have a certain price point. So if you way too different there, you’re not going to necessarily get that contract. I think you’re right though that we may have some room to wiggle there if we can get our forward modeling stuff done.

: We are working actively Jonathan, with professor Budiman to find out how we can tell the depth which relates to the aircraft speed, the altitude and the exact depth of the base. So, that’s one thing. the other thing is that SFD, the full tester gravity meter is an excellent tool and as Atul said, it allows you to find density variations in the subsurface. However it does not give you any indication of regarding presence of trap fluids. That is a major concern for me if I am an explorationsit because you can find the traps, you can find the traps but if they have no fluids in them then you have a problem and identifying the best areas early in the exploration cycle it’s a tremendous value and I think that our price is very competitive and also you don’t know this because you have not been exposed to NXT long enough but as soon as we complete our revenue generation to $20 million we would like revisit the royalty opportunity which we enjoy in North America and then create another balance you know where you can have annuity in receiving revenue and you don’t have to basically think for it. you have no expense associated with it. so on that note I’m done. Thank you very much.

Our next question is from Stan Trilling from Credit Suisse. Please go ahead. Stan Trilling - Credit Suisse: A quick follow-up based on something that (inaudible) asked about the number of active programs we’re working on. you said between 10 and 20, and also in your presentation you also said that the larger the contracts, the more profitable. in that the 10 to 20 of those, how many of those are contracts could have the potential of being more $5 million contracts potential?

: I will answer it in a different way. I can also say that of those 10 to 20 all of them are of a size of 2 million or higher. Stan Trilling - Credit Suisse: Okay and are any of them over 5 million potential?

: Yes but I don’t have the exact numbers in front me of every discussion, so there are contracts that are bigger than, our typical contracts that we’ve done are targeting or sort of in that sort of $2 million to $5 million range and then there is some that as soon as you get into NOCs that potential gets too much bigger numbers.

: Okay some of these potentials were working are in sort of same country or the same region, so there may be some efficiencies gained by doing two or three surveys within a reasonable close amount of time to get…

: Craig that’s really important in terms of if you are saying the value and if the margins get better it does not have to be that Greg's correct it does not have to be the same customer and so then there is multiple ones in your 5 million plus range as soon as you say multiples in the same region and we are targeting to do that and part of our marketing positioning with clients is if you do surveys at the same time somebody else is doing surveys, then there is some cost bandages that don’t have to mobilize twice and those sorts of things and we can actually save some money. Stan Trilling - Credit Suisse: Okay and one other thing having to do with clarifications, an earlier question I asked about how much revenue could you guys handle based on what you have in place now and if I heard correctly I heard $30 million. now that $30 million is potential that is not an estimate for ’12 correct?

: That is correct. Stan Trilling - Credit Suisse: Okay.

: That is for ’13, ’12 is past. That is not guidance. Stan Trilling - Credit Suisse: I understand but I was just looking for clarification.

: Okay no problem.

And our last question is from Ted Coburn from Coburn Greenberg please go ahead. Ted Coburn - Coburn Greenberg: I guess I have an observation that I am going to put in the form of somehow end up with a question mark on the end of it and it is for George. George as I think you know through the years I have worked with dozens of small emerging companies which have great promise and you have gotten well beyond what most can imagine and have awesome potential here. the thing that concerns me and I would like your reaction to this is for my nascent knowledge of the company, I would like you all to wake up each day and think about primary revenues. And not focus on monetization of data. that seems to me if you wake up each day and just do what you all do best, the economic returns to that will be unfathomable. as you mature it seems to me A, the data will be worth more, B, the creditability to sell the data will be worth more and the market acceptance of it. So, I am just curious, I would like you to react and respond to that.

: Well, I think you pick me so I will attempt the answer that; I have a slightly different approach from my perspective. I don’t want to speak for everybody right now. But the monetization of data even though you focus; we focus on new contracts, so that's how our primary focus and in core areas as well. So, we don't; as Andy said, no willy-nilly because we have to keep our heads moving forward and focus on the objectives that we want to achieve. However you have a situation where you have a 90 plus percent opportunity in terms of profit margin that you order the acquired data. And there are companies that are very interested in providing; having this data invested as in assets in their company and allowing SFD to lead to negotiations for that company with existing concession holders or new areas. So, what you achieve with that is that the 40,000 inline kilometers of data would be about over $40 million worth. Just think about that if you could put that on the balance sheet so that's one thing. Also think about that within a year or two these guys are going to be start drilling at this companies and very success and then we are going to have 100's of 1000's kilometers of data as we grow and as we move forward. So, I think that if somebody comes to us which happened and say I believe that your data; and that presents a tremendous value and we would like to utilize the data, you don’t have to be involved in running the company, you don’t have to do anything and you won't have an equity position in the company. And also you will have; let's see; royalty on those findings so I think from that perspective it’s a very good idea. So while we are keeping our heads going, and straight forward and getting the contract, I think because of the issues that Andy raised and said, and Greg as well, is that the cycle takes time, from start to finish, from the concept to drilling, from the concept of – we would like to use your technology but we would like to test this first, we would like to do this, we would like to do that and then many-many months ago by; now you have another opportunity where it can happen very fast. And you don’t have to worry about it. And you start taking 10,000 square kilometer data and you put it in one company, put it in another company, put it in a third company and on and on and on; because we can find them Ted much faster, these prospects than anybody can trigger them as a single company. So that’s one point. The other point is that it costs exactly the same to find a bad commercially producing prospect or find the best prospect. So the cost line is exactly the same. So for us focusing on the best prospect is very-very important.

: Just add one more thing to that, George I think the one of the challenges that the company has had over the years is, is getting widespread industry acceptance. We are still constantly working towards that and whenever doing a sale of new survey that we’ve just flown or whether we are selling survey data that’s in our library, it’s true really that there is customer demand for it. So this opportunity would help to accelerate wider spread industry acceptance which is our ultimate goal.

Yes this was the last question in the queue.

: Well we are very much like to thank you everybody for taking the time and being there to the very end whoever can hear me and we will continue our updates through conference calls and hopefully very soon we are going to make some significant announcements as well. Thank you very much all.

Ladies and gentlemen, this concludes the NXT Energy Solutions Inc. 2012 year end results conference call. Thank you for your participation….