### A TTACHMENT E

FORECASTING OIL AND GAS ACTIVITIES

## F ORECASTING 

## O IL AND 

## G AS



## A CTIVITIES

FINAL REPORT



### Prepared for:

Texas Commission on Environmental Quality

Air Quality Division

Prepared by:

Eastern Research Group, Inc.

August 31 , 2012

### ERG N 0

. 0292.01.012.001

Forecasting Oil and Gas Activities

FINAL REPORT

Prepared for:

Miles Whitten

Texas Commission on Environmental Quality

P. O. Box 13087

Austin, TX 78711

- 3087

Prepared by:

M ike Pring

Eastern Resear ch Group, Inc.

1600 Perimeter Park Dr., Suite 200

Morrisville, NC 27560

August 31 , 2012

### i Table of Contents

Executive Summary

................................ ................................ ................................ ........... x

1.0 Introduction

................................ ................................ ................................ ........ 1

- 1

2.0 Characteristics of the Texas Shale Plays

................................ ............................ 2

- 1

2.1 Barnett Shale Gas Play

................................ ................................ ............ 2

- 1

2.2 Eagle Ford Shale Oil and Gas Play

................................ .......................... 2

- 3

2.3 Haynesville Shale Gas Play

................................ ................................ ..... 2

- 5

3.0 Historical Production and Well Completion Statistics

................................ ...... 3

- 1

3.1 Barnett Shale Play

................................ ................................ ................... 3

- 1

3.2 Eagle Ford Shale Oil and Gas Play

................................ .......................... 3

- 9

3.3 Haynesville Shale Gas Play

................................ ................................ .... 3

- 15

3.4 Shale Play Production

................................ ................................ ........... 3

- 20

3.5 2011 Shale Play Well Completions

................................ ........................ 3

- 24

4.0 Future Production Scenarios

................................ ................................ ............. 4

- 1

5.0 Calculation Methodologies

................................ ................................ ................. 5

- 1

5.1 Methodology 1

................................ ................................ .......................... 5

- 1

5.2 Methodology 2

................................ ................................ .......................... 5

- 1

5.3 Methodology 3

................................ ................................ ........................ 5

- 1

5.4 Methodology 4

................................ ................................ ....................... 5

- 5

5.5 Method ology 5

................................ ................................ ....................... 5

- 7

6.0 Results of Methodologies 2 and 3

................................ ................................ ...... 6

- 1

6.1 Barnett Shale Play Region

................................ ................................ ....... 6

- 1

6.1.1 Methodology 2

................................ ................................ .............. 6

- 1

6.1.2 Methodology 3

................................ ................................ .............. 6

- 5

6.2 Eagl e Ford Shale Play Region

................................ ............................... 6

- 12

6.2.1 Methodology 2

................................ ................................ ............ 6

- 12

6.2.2 Methodology 3

................................ ................................ ............ 6

- 16

6.3 Haynesville Shale Play Region

................................ .............................. 6

- 23

6.3.1 Methodology 2

................................ ................................ ............ 6

- 23

6.3.2 Methodology 3

................................ ................................ ............ 6

- 27

7.0 Area Source Growth Factors and Associated Data for TexAER Upload

............ 7

- 1

8.0 Summary and Conclusions

................................ ................................ ................ 8

- 1

### ii Table of Contents (Continued)

Attachment A " Production Modeling and Growth Factor Calculation

. zip "

Attachment B “ Area Source Growth Factors

. zip "

Attachment C " TexAER Area Source Growth Factors .zip "

List of Tables

Table 2

- 1. Texas Counties Comprising the Barnett Shale Gas Play Region

.................... 2

- 2

Table 2

- 2. Barnett Shale Gas Play Statistics and Resource Estimates

............................ 2

- 3

Table 2

- 3. Texas Counties Comprising the Eagle Ford Shale Oil and Gas Play

Region

................................ ................................ ................................ .................... 2

- 3

Table 2

- 4. Eagle Ford Shale Gas Play Statistics and Resource Estimates

...................... 2

- 5

Table 2

- 5 . Texas Counties Comprising the Haynesville Shale Gas Play Region

....... 2

- 5

Table 2

- 6 . Haynesvil le Shale Gas Play Statistics and Resource Estimates

.............. 2

- 6

Table 3

- 1 . Barnett Shale Play Well Completions, 2011

................................ ............. 3

- 24

Table 3

- 2 . Eagle Ford Shale Play Well Completions, 2011

................................ ........ 3

- 25

Table 3

- 3 . Haynesville Shale Play Well Completions, 2011

................................ ..... 3

- 26

Table 5

- 1 . EIA TRR Data for the Texas Shale Plays

................................ ..................... 5

- 4

Table 5

- 2 . Barnett Shale Play Region Calculated Annual Growth Factors for

Y

ears 2004 through 2027

................................ ................................ ................... 5

- 5

Table 5

- 3 . EIA Crude Oil and Natural Gas Wellhead Price Projections (2012

- 2035)

and Calculated Annual Growth Factors

................................ ............................. 5

- 7

Table 6

- 1. Methodology 2 Production Models for Barnett Shale Play Region

................ 6

- 1

Table 6

- 2. Methodology 3 Production Models for Barnett Shale Play Region

............... 6

- 5

Table 6

- 3. Summary of Methodology 3 Production Model Parameters

......................... 6

- 5

Table 6

- 4. Summary of Production Growth Factors for Barnett Shale Play Region for

Methodologies 1

– 5

................................ ................................ ............................. 6

- 9

Table 6

- 5. Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Barnett Shale Play Region

................ 6

- 11

Table 6

- 6. Methodology 2 Production Models for Eagle Ford Shale Play Region

........ 6

- 12

Table 6

- 7. Methodology 3 Production Models for Eagle Ford Shale Play Region

........ 6

- 16

Table 6

- 8. Summary of Methodology 3 Production Model Parameters

....................... 6

- 16

Table 6

- 9. Summary of Production Growth Factors for Eagle Ford Shale Play Region

for Methodologies 1

– 5

................................ ................................ ...................... 6

- 20

Table 6

- 10. Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Eagle Ford Shale Play Region

......... 6

- 22

Ta ble 6

- 11. Methodology 2 Production Models for Haynesville Shale Play Region

.... 6

- 23

Table 6

- 12. Methodology 3 Production Models for Haynesville Shale Play Region

..... 6

- 27

Table 6

- 13. Summary of Methodology 3 Production Model Parameters

...................... 6

- 27

### iii List of Tables (Continued)

Table 6

- 14. Summary of Production Growth Factors for Haynesville Shale Play

Region for Methodologies 1

– 5

................................ ................................ .......... 6

- 31

Table 6

- 15. Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Haynesville Shale Play Region

........ 6

- 33

Table 7

- 1. Summary of Production Growth Factors for Barnett Shale Play Region for

Methodologies 1

– 5

................................ ................................ .............................. 7

- 2

Table 7

- 2. Summary of Production Growth Factors for Eagle Ford Shale Play Region

for Methodologies 1

– 5

................................ ................................ ......................... 7

- 3

Table 7

- 3. Summary of Production Growth Factors for Haynesville Shale Play Region

for Methodologies 1

– 5

................................ ................................ ......................... 7

- 4

Table 7

- 4. Growth Factor Scaling Variables by SCC

................................ ........................ 7

- 5

Table 7

- 5. Growth Factor Weighting Percentages

................................ ........................... 7

- 9

List of Figures

Figure 2

- 1. Texas Shale Play Counties

................................ ................................ ............. 2

- 1

Figure 2

- 2

. B arnett Shale Gas Play, Fort Worth Basin, Texas

................................ .... 2

- 2

Figure 2

- 3 . Eagle Ford Shale Oil and Gas Play, South Texas

................................ ..... 2

- 4

Figure 2

- 4 . Haynesville Shale Gas Play, Eastern Texas

................................ ............. 2

- 6

Figure 3

- 1 . Monthly Casinghead Gas Production (MCF/month) in the Barnett

Shale Play (Montague, Cooke, Wise, Palo Pinto, Stephens, and

Jack Counties)

................................ ................................ ................................ ...... 3

- 2

Figure 3

- 2 . Monthly Casinghead Gas Production (MCF/month) in the Barnett

Shale Play (Denton, Shackelford, Eastland, Parker, Clay, A rcher, Erath,

Comanche, and Hood Counties)

................................ ................................ ........ 3

- 2

Figure 3

- 3 . Monthly Casinghead Gas Production (MCF/month) in the Barnett

Shale Play (Ellis, Hamilton, Hill, Bosque, Coryell, Dallas, Johnson, Somervell,

and Tarrant Counties)

................................ ................................ ......................... 3

- 3

Figure 3

- 4 . Monthly Oil Production (BBL/month) in the Barnett Shale Play

(Cooke, Montague, and Stephens Counties)

................................ ..................... 3

- 3

Figure 3

- 5 . Monthly Oil Production (BBL/month) in the Barnett Shale Play

(Archer, Jack, Shackelford, Clay, Palo Pin to, Wise, and Eastland

Counties)

................................ ................................ ................................ ............... 3

- 4

Figure 3

- 6 . Monthly Oil Production (BBL/month) in the Barnett Shale Play

(Denton, Comanche, and Parker Counties)

................................ ...................... 3

- 4

Figure 3

- 7 . Monthly Oil Production (BBL/month) in the Barnett Shale Play

(Erath, Hill, and Hood Countie s)

................................ ................................ ....... 3

- 5

### iv List of Figures (Continued)

Figure 3

- 8 . Monthly Oil Production (BBL/month) in the Barnett Shale Play

(Hamilton, Ellis, Coryell, Bosque, Dallas, Johnson, Somervell, and Tarrant

Counties)

................................ ................................ ................................ ............... 3

- 5

Figure 3

- 9 . Monthly Gas Well Production (MCF/month) in the Barnett Shale Play

(Tarrant, Johnson, Denton, Wise, Parker, and Hood Counties)

.................... 3

- 6

Figure 3

- 10 . Monthly Gas Well Production (MCF/month) in the Barnett Shale Play

(Hill, Jack, Palo Pinto, Stephens, Erath, Ellis, Somervell, Dallas, Eastland,

and Shackelford Counties)

................................ ................................ .................. 3

- 6

Figure 3

- 11 . Monthly Gas Well Production (MCF/month) in the Barnett Shale Play

(Montague, Comanche, Cooke, Clay, Bosque, Hamilton, Archer, and

Coryell Counties)

................................ ................................ ................................ . 3

- 7

Figure 3

- 12 . Monthly Condensate Production (BBL/month) in the Barnett Shale

Play (Wise, Denton, Hood, Parker, Jack, Palo Pinto, and Montague

Counties)

................................ ................................ ................................ ............... 3

- 7

Figure 3

- 13 . Monthly Condensate Production (BBL/month) in the Barnett Shale

Play (Stephens, Johnson, Tarrant, Erath, Shackelfo rd, Somervell, Clay,

Comanche, Hamilton, Archer, Hill, Bosque, Dallas, Ellis, and Coryell

Counties)

................................ ................................ ................................ .............. 3

- 8

Figure 3

- 14 . Monthly Condensate Production (BBL/month) in the Barnett Shale

Play (Eastland and Cooke Counties)

................................ ................................ . 3

- 8

Figure 3

- 15 . Monthly Oil Production (BBL/month) in the Eagle Ford Shale Play

(Karnes, Gonzales, Dimmit, Burleson, La Salle, and McMullen Counties)

... 3

- 9

Figure 3

- 16 . Monthly Oil Production (BBL/month) in the Eagle Ford Shale Play

(Brazos, Maverick, Live Oak, Robertson, Lee, Fayette, Atascosa, and Frio

Counties)

................................ ................................ ................................ ............. 3

- 10

Figure 3

- 17 . Monthly Oil Production (BBL/month) in the Eagle Ford Shale Play

(Leon, Zavala, Wilson, De Witt, Milam, Bee, Grimes, Lavaca, and Webb

Counties)

................................ ................................ ................................ ............. 3

- 10

Figure 3

- 18 . Monthly Condensate Production (BBL/month) in the Eagle Ford Shale

Play (Webb, De Witt, Dimmit, Karnes, Live Oak, McMullen, and La Salle

Counties)

................................ ................................ ................................ ............. 3

- 11

Figure 3

- 19 . Monthly Condensate Production (BBL/month) in the Eagle Ford Shale

Play (Lavaca, Fayette, Bee, Leon, Grimes, Brazos, Atascosa, Gonzales,

Burleson, Lee, Maverick, Robertson, Frio, Wilson, Zavala, and Milam

Counties)

................................ ................................ ................................ ............. 3

- 11

Figure 3

- 20 . Monthly Gas Well Production (MCF/month) in the Eagle Ford Shale

Play (Robertson, Webb, Leon, De Witt, and Lavaca Counties)

..................... 3

- 12

### v List of Figures (Continued)

Figure 3

- 21

. Monthly Gas Well Production (MCF/month) in the Eagle Ford Shale

Play (La Salle, Bee, Live Oak, McMullen, Grimes, Karnes, Dimmit, and

Fayette Counties)

................................ ................................ ............................... 3

- 12

Figure 3

- 22 . Monthly Gas Well Production (MCF/month) in the Eagle Ford Shale

Play (Atascosa, Brazos, Maverick, Burleson, Lee, Frio, Gonzales, Zavala,

Milam, and Wilson Counties)

................................ ................................ ........... 3

- 13

Figure 3

- 23 . Monthly Casinghead Gas Production (MCF/month) in the Eagle Ford

Shale Play (Burleson, Lee, Fayette, Brazos, and McMullen Counties)

......... 3

- 13

Figure 3

- 24 . Monthly Casinghead Gas Production (MCF/month) in the Eagle Ford

Shale Play (Karnes, Dimmit, La Salle, Live Oak, and Gonzales Counties)

.. 3

- 14

Figure 3

- 25 . Monthly Casinghead Gas Production (MCF/month) in the Eagle Ford

Shale Play (Leon, Frio, Grimes, Robertson, De Witt, Atascosa, Bee, Maverick,

Lavaca, Zavala, Milam, Webb, and Wilson Counties)

................................ .... 3

- 14

Figure 3

- 26 . Monthly Oil Well Production (BBL/mont h) in the Haynesville Shale

Play (Gregg, Rusk, Harrison, and Panola Counties)

................................ ...... 3

- 15

Figure 3

- 27 . Monthly Oil Well Production (BBL/month) in the Haynesville Shale

Play (Shelby, Marion, and San Augustine Counties)

................................ ..... 3

- 16

Figure 3

- 28 . Monthly Oil Well Production (BBL/month) in the Haynesville Shale

Play (Nacogdoches, Sabine, and Angelina Counties)

................................ ..... 3

- 16

Figure 3

- 29 . Monthly Condensate Production (BBL/month) in the Haynesville

Shale Play (Panola, Harrison, Rusk, Nacogdoches, and Gregg Counties)

... 3

- 17

Figure 3

- 30 . Monthly Condensate Production (BBL/month) in the Haynesville

Shale Play (Shelby, Marion, San Augustine, Angelina, and Sabine

Counties)

................................ ................................ ................................ ............. 3

- 17

Figure 3

- 31 . Monthly Casinghead Gas Production (MCF/month) in the

Haynesville Shale Play (Shelby, Panola, Gregg, Rusk, and Harrison

Counties)

................................ ................................ ................................ ............. 3

- 18

Figure 3

- 32 . Monthly Casinghead Gas Production (MCF/month) in the Haynesville

Shale Play (San Augustine, Marion, Nacogdoches, Sabine, and Angelina

Counties)

................................ ................................ ................................ ............. 3

- 19

Figure 3

- 33 . Monthly Gas Well Production (MCF/month) in the Haynesville Shale

Play (Panola, Harrison, Rusk, Nacogdoches, an d Shelby Counties)

............ 3

- 19

Figure 3

- 34 . Monthly Gas Well Production (MCF/month) in the Haynesville Shale

Play (San Augustine, Gregg, Angelina, Marion, and Sabine Counties)

....... 3

- 20

Figure 3

- 35 . Combined Monthly Gas Well and Casinghead Gas Production

(MCF/month) by Texas Shale Play Region, Compared with the Price of

Natural Gas

................................ ................................ ................................ ......... 3

- 21

### vi List of Figures (Continued)

Figure 3

- 36 . Combined Cumulative Gas Well and Casinghead Gas Production (MCF)

by Texas Shale Play Region

................................ ................................ .............. 3

- 22

Figure 3

- 37 . Combined Monthly Oil Well and Condensate Production (BBL/month)

by Texas Shale Play Region, Compared to WTI Crude Oil Spot Price

($/BBL)

................................ ................................ ................................ .............. 3

- 22

Figure 3

- 38 . Combined Cumulative Oil Well and Condensate Production (BBL) by

Texas Shale Play Region

................................ ................................ ................... 3

- 23

Figure 5

- 1 . Methodology 3 Annual Growth Factors (Base Year 2003) for Oil, Natural

Gas, and Condensate Production for the Barnett Shale Play Region (2004

-

2027 )

................................ ................................ ................................ ..................... 5

- 6

Figure 5

- 2. EIA Projected Crude Oil Wellhead Price and Annual Growth Factor

(2012

- 2035)

................................ ................................ ................................ .......... 5

- 8

Figure 5

- 3. EIA Projected Natural Gas Wellhead Price and Annual Growth Factor

(2012

- 2035)

................................ ................................ ................................ .......... 5

- 8

Figure 6

- 1. Methodology 2 Model Fit to Historic Oil Production from the Barnett Shale

Play Region (2000

- 2011)

................................ ................................ ..................... 6

- 2

Figure 6

- 2. Methodology 2 Projected Cumulative and Annual Oil Production from the

Barnett Shale Play Region (2012

- 2035)

................................ .............................. 6

- 2

Figure 6

- 3. Methodology 2 Model Fit to Historic Natural Gas Production from the

Barnett Shale Play Region (2000

- 2011)

................................ ............................... 6

- 3

Figure 6

- 4. Methodology 2 Projected Cumulative and Annual Natural Gas Production

from the Barnett Shale Play Region (2012

- 2035)

................................ ................ 6

- 3

Figure 6

- 5. Methodology 2 Model Fit to Historic Condensate Production from the

Barnett Shale Play Region (2000

- 2011)

................................ .............................. 6

- 4

Figure 6

- 6. Methodology 2 Projected Cumulative and Annual Condensate Production

from the Barnett Shale Play Region (2012

- 2035)

................................ ............... 6

- 4

Figure 6

- 7. Methodology 3 Model Fit to Historic Oil Production from the Barnett Shale

Play Region (2000

- 2011)

................................ ................................ ..................... 6

- 6

Figure 6

- 8. Methodology 3 Projected Cumulative and Annual Oil Production from the

Barnett Shale Play Region (2012

- 2035)

................................ .............................. 6

- 6

Figure 6

- 9. Methodology 3 Model Fit to Historic Natural Gas Production from the

Barnett Shale Play Region (2000

- 2011)

................................ ............................... 6

- 7

Figure 6

- 10. Methodology 3 Projected Cumulative and Annual Natural Gas Production

from the Barnett Shale Play Region (2012

- 2035)

................................ ................ 6

- 7

Figure 6

- 11. Methodology 3 Model Fit to Historic Condensate Production from the

Barnett Shale Play Region (2000

- 2011)

................................ .............................. 6

- 8

Figure 6

- 12. Methodology 3 Projected Cumulative and Annual Condensate Production

from the Barnett Shale Play Region (2012

- 2035)

................................ ............... 6

- 8

### vii List of Figures (Continued)

Figure 6

- 13. Oil Production Annual Growth Factors for Barnett Shale Play Region

(2012

- 2035)

................................ ................................ ................................ ......... 6

- 10

Figure 6

- 14. Gas Production Annual Growth Factors for Barnett Shale Play Region

(2012

- 2035)

................................ ................................ ................................ ......... 6

- 10

Figure 6

- 15. Condensate Annual Growth Factors for Barnett Shale Play Region

(2012

- 2035)

................................ ................................ ................................ ......... 6

- 11

Figure 6

- 16. Methodology 2 Model Fit to Historic Oil Production from the Eagle Ford

Shale Play Region (2000

- 2011)

................................ ................................ .......... 6

- 13

Figure 6

- 17. Methodology 2 Projected Cumulative and Annual Oil Production from the

Eagle Ford Shale Play Region (2012

- 2035)

................................ ........................ 6

- 13

Figure 6

- 18. Methodology 2 Model Fit to Historic Natural Gas Production from the

Eagle Ford Shale Play Region (2000

- 2011)

................................ ........................ 6

- 14

Figure 6

- 19. Methodology 2 Projected Cumulative and Annual Natural Gas Production

from the Eagle Ford Shale Play Region (2012

- 2035)

................................ ......... 6

- 14

Figure 6

- 20. Methodology 2 Model Fit to Historic Condensate Production from the

Eagle Ford Shale Play Region (2000

- 2011)

................................ ........................ 6

- 15

Figure 6

- 21. Methodology 2 Projected Cumulative and Annual Condensate Production

from the Eagle Ford Shale Play Region (2012

- 2035)

................................ ......... 6

- 15

Figure 6

- 22. Methodology 3 Model Fit to Historic Oil Production from the Eagle Ford

Shale Play Region (2000

- 2011)

................................ ................................ .......... 6

- 17

Figure 6

- 23. Methodology 3 Projected Cumulative and Annual Oil Production from the

Eagle Ford Shale Play Region (2012

- 2035)

................................ ........................ 6

- 17

Figure 6

- 24. Methodology 3 Model Fit to Historic Natural Gas Production from the

Eagle Ford Shale Play Region (2000

- 2011)

................................ ........................ 6

- 18

Figure 6

- 25. Methodology 3 Projected Cumulative and Annual Natural Gas Production

from the Eagle Ford Shale Play Region (2012

- 2035)

................................ ......... 6

- 18

Figure 6

- 26. Methodology 3 Model Fit to Historic Condensate Production from the

Eagle Ford Shale Play Region (2000

- 2011)

................................ ........................ 6

- 19

Figure 6

- 27. Methodology 3 Projected Cumulative and Annual Condensate Production

from the Eagle Ford Shale Play Region (2012

- 2035)

................................ ......... 6

- 19

Figure 6

- 28. Oil Production Annual Growth Factors for Eagle Ford Shale Play Region

( 2012

- 2035)

................................ ................................ ................................ ......... 6

- 21

Figure 6

- 29. Gas Production Annual Growth Factors for Eagle Ford Shale Play Region

(2012

- 2035)

................................ ................................ ................................ ......... 6

- 21

Figure 6

- 30. Condensate Production Annual Growth Factors for Eagle Ford Shale Play

Region (2012

- 2035)

................................ ................................ ........................... 6

- 22

Figure 6

- 31. Methodology 2 Model Fit to Historic Oil Production from the Haynesville

Shale Play Region (2000

- 2011)

................................ ................................ ......... 6

- 24

### viii List of Figures (Continued)

Figure 6

- 32. Methodology 2 Projected Cumulative and Annual Oil Production from the

Haynesville Shale Play Region (2012

- 2035)

................................ ..................... 6

- 24

Figure 6

- 33. Methodology 2 Model Fit to Historic Natural Gas Production from the

Haynesville Shale Play Region (2000

- 2011)

................................ ...................... 6

- 25

Figure 6

- 34. Methodology 2 Projected Cumulative and Annual Natural Gas Production

from the Haynesville Shale Play Region (2 012

- 2035)

................................ ........ 6

- 25

Figure 6

- 35. Methodology 2 Model Fit to Historic Condensate Production from the

Haynesville Shale Play Region (2000

- 2011)

................................ ..................... 6

- 26

Figure 6

- 36. Methodology 2 Projected Cumulative and Annual Condensate Production

from the Haynesville Shale Pla y Region (2012

- 2035)

................................ ....... 6

- 26

Figure 6

- 37. Methodology 3 Model Fit to Historic Oil Production from the Haynesville

Shale Play Region (2000

- 2011)

................................ ................................ ......... 6

- 28

Figure 6

- 38. Methodology 3 Projected Cumulative and Annual Oil Production from the

Haynesville Shale Play Region (2012

- 2035)

................................ ..................... 6

- 28

Figure 6

- 39. Methodology 3 Model Fit to Historic Natural Gas Production from the

Haynesville Shale Play Region (2000

- 2011)

................................ ..................... 6

- 29

Figure 6

- 40. Methodology 3 Projected Cumulative and Annual Natural Gas Production

from the Haynesville Shale Play Region (2012

- 2035)

................................ ....... 6

- 29

Figure 6

- 41. Methodology 3 Model Fit to Historic Condensate Production from the

Haynesville Shale P lay Region (2000

- 2011)

................................ ..................... 6

- 30

Figure 6

- 42. Methodology 3 Projected Cumulative and Annual Condensate Production

from the Haynesville Shale Play Region (2012

- 2035)

................................ ....... 6

- 30

Figure 6

- 43. Oil Production Annual Growth Factors for Haynesville Shale Play Region

(2012

- 203 5)

................................ ................................ ................................ ........ 6

- 32

Figure 6

- 44. Gas Production Annual Growth Factors for Haynesville Shale Play Region

(2012

- 2035)

................................ ................................ ................................ ........ 6

- 32

Figure 6

- 45. Condensate Production Annual Growth Factors for Haynesville Shale Play

Region (2012

- 2035)

................................ ................................ ........................... 6

- 33

### ix List of Acronyms

EIA Energy Information Administration

EUR Estimated Ultimate Recovery

BCF Billion cubic feet

TCF Trillion cubic feet

TRC Texas Railroad Commission

MBO Thousand barrels of oil

BBO Billion barrels of oil

TRR Technically Recoverable Resources

MCF Thousand cubic feet

BBL Barrels

URR Ultimately Recoverable Resources

SCC Source Classification Code

List of Units

y

r year

mi 2 

### square miles

### x 

## Executive Summary

This report is a deliverable for Texas Commission on Environmental Quality (TCEQ)

Work Order No. 582

- 11

- 99776

- FY12

- 12 to develop area

- specific growth factors to

forecast oil and gas activities in the following areas: Barnett, Haynesville, and Eagle

Ford Sh ales. Production in these three shale play regions began to increase around

2001 with the advent of horizontal drilling and hydraulic fracturing, with significant

production increases seen in the region over the last five to seven years. Initially, the

B arnett Shale in North

- central Texas was the focal point of shale gas development, but

recently more activity has occurred in the Eagle Ford Shale area in South

- central Texas

as this play contains both oil and gas shale deposits.

Historical monthly producti on data were obtained from the Texas Railroad

Commission ( TRC) for the years 2000 through February 2012. These data were

obtained at the county level, and included gas well gas production (MCF/month), oil

production in barrels per month (BBL/month), casin ghead gas production

(MCF/month), and condensate production (BBL/month). ERG segregated the

monthly production data based on the counties that compose the Barnett, Eagle Ford,

and Haynesville shale play regions. This data was then used to project future

production activity based on the following 5 forecasting methodologies:

Methodology 1 : Project future production assuming that current production

remains constant into the future.

Methodology 2 : Project future production levels based on the historical

prod uction timeline for each specific shale play, on a county

- by

- county basis.

Methodology 3 (Hubbert’s model) : Project future production levels based on the

historical production timeline for each specific shale play, on a county

- by

county basis, with a cappe d limit based on the size of the reserves.

Methodology 4 : Project future production levels for counties in the Barnett

shale play and use as a surrogate for the counties in the Haynesville Shale and

Eagle Ford Shale plays.

Methodology 5 : Project future pro duction by using natural gas commodity price

projections as a surrogate for future production.

Growth factors were developed using the results of these analyses to represent the

change in annual production in years 2012 through 2035 relative to the annual

production in the base year of 2011. Once the growth factors were calculated, the factors

were applied to the 2011 annual production for each product in each shale play region to

estimate annual production in each year 2012 through 2035. The estimated an nual

### xi production values were then summed across the years 2012 through 2035 resulting in

an estimated cumulative production for the same time period. Three growth scenarios

(high growth, moderate growth, and low growth) were then identified from the

estima ted cumulative production values.

Based on the findings of this effort, Methodology 3 (Hubbert’s model) is the preferred

forecasting methodology. The Hubbert model wa s developed for each shale play region

based on historical data for the region, but also takes into account changes in

production rates due to the size of reserves and estimated ultimate recovery. While

there is a great amount of uncertainty in reserve estimation and even published

Technically Recoverable Resources ( TRR ) values (and those val ues continue to change

over time due to advances in technology and estimation methods), the Hubbert model

accounts for estimated maximum cumulative production. The gradual leveling of total

cumulative production as resources near depletion is reflected in the production rate

curve when the cumulative production curve is differentiated. The result is a clear peak

in the annual production curve indicating when maximum annual production is

estimated to occur. For emissions modeling and estimation purposes, this peak would

also correspond to the period of peak emissions resulting from production activities.

Except under M ethodology 4 (modeling based on existing and projected Barnett Shale

growth) , the other projection methodologies do not produce a distinct production peak

which results in production either increasing (at a constant or variable rate) or

remaining constant indefinitely, which are likely very unrealistic or improbable

scenarios.

### 1

- 1 

## 1.0 Introduction

Under a contract with the Texas Commission on Environmental Quality (TCEQ),

Eastern Research Group, Inc. (ERG) developed area

- specific growth factors to

forecast oil and gas activities in the Texas counties that comprise the Barnett, Eagle

Ford, and Haynes ville S hale plays

. This report describes the methodologies and

results of that effort.

### 2

- 1 

## 2.0 Characteristics of the Texas Shale Plays

Shale gas and oil development across the United States has increased dramatically

in the last 10 years due to technological advances in drilling and well completion

activities. In particular, horizontal drilling and hydraulic fracturing have allowed

for development of shale gas and oil deposits. Seve ral counties in Texas compose

the three different shale plays covered under this repo rt as illustrated by Figure 2

- 1.

Additional details on each of these areas is provided below.

Figure 2

- 1 . Texas Shale Play Counties

2.1 Barnett Shale Gas Play

The Barnett shale gas play is situated around the Dallas

- Fort Worth metropolitan

area and covers approximately 6,000 square miles (mi 2 

### ). Table 2

- 1 identifies the

twenty

- four counties in Texas that compose the Barnett shale play region:

### 2

- 2 Table 2

- 1 . Texas Counties Comprising the Barnett Shale

Gas Play Region

ARCHER BOSQUE CLAY

COMANCHE COOKE CORYELL

DALLAS DENTON EASTLAND

ELLIS ERATH HAMILTON

HILL HOOD JACK

JOHNSON MONTAGUE PALO PINTO

PARKER SHACKELFORD SOMERVELL

STEPHENS TARRANT WISE



### Figure 2

- 2 shows the location of oil and gas wells in the Barnett Shale.

Figure 2

- 2 . Barnett Shale Gas Play, Fort Worth Basin, Texas

Production in the Barnett shale play region began to increase around 2001 with the

advent of horizontal drilling and hydraulic fracturing, with significant production

increases seen in the region over the last five to seven years. The Barnett Shale pla y

was the first area in Texas to experience increased development.

### 2

- 3 A report by the U.S. Department of Energy, Energy Information Administration

(EIA) reviewed key statistics and resource estimates for the Barnett Shale g as play,

which are listed in Table 2

- 2 below.

Table 2

- 2 . Barnett Shale Gas Play Statistics and Resource

Estimates 1

Active Undeveloped

Area (mi 2 ) 4,075 2,383

EUR (BCF/well) 1.6 1.2

Well Spacing (wells/mi 2 ) 5.5 8

TRR (TCF) 23.81 19.56

BCF

– billion cubic feet

EUR

– Estimated Ultimate Recovery

TCF

– trillion cubic feet

TRR

– Technically Recoverable Resources



### 2.2 Eagle Ford Shale Oil and Gas Play

The Eagle Ford Shale is a hydrocarbon producing formation of significant

importance due to its capab ility of producing gas , condensate, and more oil than

other traditional shale plays. The Eagle Ford S hale is situated in south Texas and is

roughly 50 miles wide and 400 miles long

. The area of the dry gas zone is estimated

at 200 mi 2 

### ; the area of the co ndensate zone is estimated at 890 mi 2 

### ; and the area of

the oil zone is estimated at 2,233 mi 2



### . The Eagle Ford Shale is located in the

Western Gulf basin within the Texas Railroad Commission (TRC) Districts 1 thru 6

. Table 2

- 3 identifies the twenty

- three counties in the Eagle Ford shale region:

Table 2

- 3

. Texas Counties Comprising the Eagle Ford

Shale Oil and Gas Play Region

ATASCOSA BEE BRAZOS

BURLESON DE WITT DIMMIT

FAYETTE FRIO GONZALES

GRIMES KARNES LA SALLE

LAVACA LEE LEON

LIVE OAK MAVERICK MCMULLEN

MILAM ROBERTSON WEBB

WILSON ZAVALA



### Figure 2

- 3 shows the location of oil and gas wells in the Eagle Ford Shale.

1 “Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays,” U.S. Energy Information Administration,

July 2011.

### 2

- 4 Figure 2

- 3 . Eagle Ford Shale Oil and Gas Play, South Texas

Source: US Energy Information Administration, 2012, http://www.eia.gov/oil_gas/rpd/shaleusa9.pdf



### The first of the Eagle Ford Shale wells was dr illed in 2008, using horizontal drilling

and multi

- stage hydraulic fracturing. The number of wells drilled in this region has

increased steadily since then. The number of producing gas wells has increased

from 67 in 2009, to 158 in 2010, and 155 in 2011. The number of producing oil

leases has increased from 40 in 2009, to 72 in 2010, and 368 in 2011.

A report by the EIA reviewed key statistics and resource e stimates for the Eagle

Ford shale play, which are listed in Table 2

- 4 below.

### 2

- 5 Table 2

- 4

. Eagle Ford Shale Gas Play Statistics and Resource Estimates 2

Dry Gas Zone Condensate Zone Oil Zone

Area (mi 2 ) 200 890 2,233

EUR (BCF/well) 5.5 4.5

EUR (MBO/well) 300

Well Spacing (wells/mi 2 ) 4 8 5

TRR (BBO) 3.35

TRR (TCF) 4.38 16.43

BBO

– billion barrels of oil

MBO

– thousand barrels of oil



### 2.3 Haynesville Shale Gas Play

The Haynesville shale gas play, also known as the Haynesville

- Bossier shale play, is

located in East Texas and Western Louisiana. The Haynesville shale has a total area

of approximately 9,000 square miles. Table 2

- 5 identifies the ten counties in Texas

that comp o se the Texas portion of the Haynesville shale play region:

Table 2

- 5 . Texas Counties Comprising the

Haynesville Shale Gas Play Region

ANGELINA GREGG

HARRISON MARION

NACOGDOCHES PANOLA

RUSK SABINE

SAN AUGUSTINE SHELBY



### Figure 2

- 4 shows the location of oil and gas wells in the Haynesville Shale.

2 “ Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays,” U.S. Energy Information Administration,

July 2011.

### 2

- 6 Figure 2

- 4 . Haynesville Shale Gas Play, Eastern Texas

Production in the Haynesville shale play region has doubled in the past ten years

with the introduction of directional drilling and hydraulic fracturing techniques and

the higher natural gas prices which occurred from 2005 to 2008 (over $5 per

thousand cubic feet ( MCF ) ). The combination of these factors made extraction of

the gas econo mic ally feasible

. With the recent decline in natural gas prices, drilling

activity and production have been curtailed.

K ey statistics and resource estimates from the EIA for the Haynesv ille gas shale play

are listed in Table 2

- 6 below.

Table 2

- 6

. Haynesville Shale Gas Play

Statistics and Resource Estimates 3

Active Undeveloped

Area (mi 2 ) 3,574 5,426

EUR (BCF/well) 6.5 1.5

Well Spacing (wells/mi 2 ) 8 8

TRR (TCF) 53.30 19.41

3 “Review of Em erging Resources: U.S. Shale Gas and Shale Oil Plays,” U.S. Energy Information Administration,

July 2011.

### 3

- 1 

## 3.0 Historical Production and Well Completion Statistics

Historical monthly production data were obtained from the TRC for the years 2000

through February 2012. These data were obtained at the county level, and included

gas well gas production (MCF/month), oi l production in barrels per month

(BBL/month), casinghead gas production (MCF/month), and condensate

production (BBL/month). ERG segregated the monthly production data based on

the listing of counties that compose the Barnett, Eagle Ford, and Haynesville shale

play regions (see Tables 2

- 1, 2

- 3, and 2

- 5 above).

3.1 Barnett Shale Play

Figures 3

- 1 through 3

- 8 below show county

- by

- county monthly casinghead gas

production and oil production for the counties comprising the Barnett shale play.

Montague and Palo Pinto counties began to experience significant increases in

monthly casinghead gas production in 2008. Production increases were also seen

in Cooke and Jack counties beginning around 2010. These increases roughly

correspond to increases in oil production in t hose counties during the same time

period, although oil production in Palo Pinto County has declined steadily since late

2008. The six counties shown in Figure 3

- 1 produce the majority of the casinghead

gas in the Barnett Shale, while the three counties shown in Figure 3

- 4 produce the

majority of oil in the Barnett Shale.

### 3

- 2 Figure 3

- 1 . Monthly Casinghead Gas Production (MCF/month) in the

Barnett Shale Pla y (Montague, Cooke, Wise, Palo Pinto, Stephens, and

Jack Counties)

Figure 3

- 2 . Monthly Casinghead Gas Production (MCF/month) in the

Barnett Shale Play (Denton, Shackelford, Eastland, Parker, Clay,

Archer, Erath, Comanche, and Hood Counties) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 MONTAGUE

COOKE

WISE

PALO PINTO

STEPHENS

JACK

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 DENTON

SHACKELFORD

EASTLAND

PARKER

CLAY

ARCHER

ERATH

COMANCHE

HOOD

### 3

- 3 Figure 3

- 3 . Monthly Casinghead Gas Production (MCF/month) in the

Barnett Shale Play (Ellis, Hamilton, Hill, Bosque, Coryell, Dallas,

Johnson, Somervell, and Tarrant Counties)

Figure 3

- 4 . Monthly Oil Production (BBL/month) in the Barnett Shale

Play (Cooke, Montague, and Stephens Counties) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 ELLIS

HAMILTON

HILL

BOSQUE

CORYELL

DALLAS

JOHNSON

SOMERVELL

TARRANT

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 COOKE

MONTAGUE

STEPHENS

### 3

- 4 Figure 3

- 5 . Monthly Oil Produ ction (BBL/month) in the Barnett Shale

Play (Archer, Jack, Shackelford, Clay, Palo Pinto, Wise, and Eastland

Counties)

Figure 3

- 6 . Monthly Oil Production (BBL/month) in the Barnett Shale

Play (Denton, Comanche, and Parker Counties) 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 ARCHER

JACK

SHACKELFORD

CLAY

PALO PINTO

WISE

EASTLAND

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 DENTON

COMANCHE

PARKER

### 3

- 5 Figure 3

- 7 . Monthly Oil Production (BBL/month) in the Barnett Shale

Play (Erath, Hill, and Hood Counties)

Figure 3

- 8 . Mont hly Oil Production (BBL/month) in the Barnett Shale

Play (Hamilton, Ellis, Coryell, Bosque, Dallas, Johnson, Somervell, and

Tarrant Counties)

Total gas well gas production rates from all counties in the Barnet shale play have

generally been increasing s teadily since around 2006. The highest gas well gas

producing counties are Tarrant and Johnson counties (Figure 3

- 9 ), but increases in 0 200 400 600 800 1,000 1,200 1,400Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 ERATH

HILL

HOOD

0 50 100 150 200 250 300 350 400 450Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 HAMILTON

ELLIS

CORYELL

BOSQUE

DALLAS

JOHNSON

SOMERVELL

TARRANT

### 3

- 6 monthly gas production have also been experienced in other counties (Figures 3

- 10

and 3

- 11) . Condensate production by c ounty is shown in Figures 3

- 12 through 3

- 14

. The gas produced in the Barnett Shale is dry, so very little condensate is produced

relative to the volume of gas.

Figure 3

- 9 . Monthly Gas Well Production (MCF/month) in the Barnett

Shale Play (Tarrant, Johnson, Denton, Wise, Parker, and Hood

Counties)

Figure 3

- 10 . Monthly Gas Well Production (MCF/month) in the Barnett

Shale Play (Hill, Jack, Palo Pinto, Ste phens, Erath, Ellis, Somervell,

Dallas, Eastland, and Shackelford Counties) 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 TARRANT

JOHNSON

DENTON

WISE

PARKER

HOOD

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 HILL

JACK

PALO PINTO

STEPHENS

ERATH

ELLIS

SOMERVELL

DALLAS

EASTLAND

SHACKELFORD

### 3

- 7 Figure 3

- 11 . Monthly Gas Well Production (MCF/month) in the Barnett

Shale Play (Montague, Comanche, Cooke, Clay, Bosque, Hamilton,

Archer, and Coryell Counties)

Figure 3

- 12 . Monthly Condensate Production (BBL/month) in the

Barnett Shale Play (Wise, Denton, Hood, Parker, Jack, Palo Pinto, and

Montague Counties) 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 MONTAGUE

COMANCHE

COOKE

CLAY

BOSQUE

HAMILTON

ARCHER

CORYELL

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 WISE

DENTON

HOOD

PARKER

JACK

PALO PINTO

MONTAGUE

### 3

- 8 Figure 3

- 13 . Monthly Condensate Production (BBL/month) in the

Barnett Shale Play (Stephens, Johnson, Tarrant, Erath, Shackelford,

Somervell, Clay, Comanche, Hamilton, Archer, Hill, Bosque, Dallas,

Ellis, and Coryell C ounties)

Figure 3

- 14 . Monthly Condensate Production (BBL/month) in the

Barnett Shale Play (Eastland and Cooke Counties) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 STEPHENS

JOHNSON

TARRANT

ERATH

SHACKELFORD

SOMERVELL

CLAY

COMANCHE

HAMILTON

ARCHER

HILL

BOSQUE

DALLAS

ELLIS

CORYELL

0 5,000 10,000 15,000 20,000 25,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 EASTLAND

COOKE

### 3

- 9 3.2 Eagle Ford Shale Oil and Gas Play

Figures 3

- 15 through 3

- 25 show the oil, condensate, and gas production from wells

in the Eagle Ford Shale counties. The Eagle Ford is unique among Texas shale plays

in that it contains regions that are rich in oil and condensate. With the introduction

of horizontal drilling and fracturing in early 2010, production of both oil and

condensate (Figures 3

- 15 through 3

- 19 ) has increased to five times the 2009 levels.

While the production of casinghead gas associated with oil production (Figures 3

- 23

through 3

- 25 ) has more than doubled in the last two years, the production of gas

well gas (Figures 3

- 20 through 3

- 22 ) has increased only by 30%. This is most likely

due to the differential between high prices for oil and low prices for natural gas.

Figure 3

- 15 . Monthly Oil Production (BBL/month) in the Eagle Ford

Shale Play (Karnes, Gonzales, Dimmit, Burleson, La Salle, and

McMullen Counties)

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 KARNES

GONZALES

DIMMIT

BURLESON

LA SALLE

MCMULLEN

### 3

- 10 Figure 3

- 16 . Monthly Oil Production (BBL/month) in the Eagle Ford

Shale Play (Brazos, Maverick, Live Oak, Robertson, Lee, Fayette,

Atascosa, and Frio Counties)

Figure 3

- 17 . Monthly Oil Production (BBL/month) in the Eagle Ford

Shale Play (Leon, Zavala, Wilson, De Witt, Milam, Bee, Grimes, Lavaca,

and Webb Counties) 0 100,000 200,000 300,000 400,000 500,000 600,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 BRAZOS

MAVERICK

LIVE OAK

ROBERTSON

LEE

FAYETTE

ATASCOSA

FRIO

0 50,000 100,000 150,000 200,000 250,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 LEON

ZAVALA

WILSON

DE WITT

MILAM

BEE

GRIMES

LAVACA

WEBB

### 3

- 11 Figure 3

- 18 . Monthly Condensate Production (BBL/month) in the Eagle

Ford Shale Play (Webb, De Witt, Dimmit, Karnes, Live Oak, McMullen,

and La Salle Counties)

Figure 3

- 19 . Monthly Condensate Production (BBL/month) in the Eagle

Ford Shale Play (Lavaca, Fayette, Bee, Leon, Grimes, Brazos, Atascosa,

Gonzales, Burleson, Lee, Maverick, Robertson, Frio, Wilson, Zavala,

and Milam Counties) 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 WEBB

DE WITT

DIMMIT

KARNES

LIVE OAK

MCMULLEN

LA SALLE

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 LAVACA

FAYETTE

BEE

LEON

GRIMES

BRAZOS

ATASCOSA

GONZALES

BURLESON

LEE

MAVERICK

ROBERTSON

FRIO

WILSON

ZAVALA

MILAM

### 3

- 12 Figure 3

- 20 . Monthly Gas Well Production (MCF/month) in the Eagle

Ford Shale Play (Robertson, Webb, Leon, De Witt, and Lavaca Counties)

Figure 3

- 21 . Monthly Gas Well Production (MCF/month) in the Eagle

Ford Shale Play (La Salle, Bee, Live Oak, McMullen, Grimes, Karnes,

Dimmit, and Fayette Counties) 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 ROBERTSON

WEBB

LEON

DE WITT

LAVACA

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 LA SALLE

BEE

LIVE OAK

MCMULLEN

GRIMES

KARNES

DIMMIT

FAYETTE

### 3

- 13 Figure 3

- 22

. Monthly Gas Well Production (MCF/month) in the Eagle

Ford Shale Play (Atascosa, Brazos, Maverick, Burleson, Lee, Frio,

Gonzales, Zavala, Milam, and Wilson Counties)

Figure 3

- 23 . Monthly Casinghead Gas Prod uction (MCF/month) in the

Eagle Ford Shale Play (Burleson, Lee, Fayette, Brazos, and McMullen

Counties) 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 ATASCOSA

BRAZOS

MAVERICK

BURLESON

LEE

FRIO

GONZALES

ZAVALA

MILAM

WILSON

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 BURLESON

LEE

FAYETTE

BRAZOS

MCMULLEN

### 3

- 14 Figure 3

- 24 . Monthly Casinghead Gas Production (MCF/month) in the

Eagle Ford Shale Play (Karnes, Dimmit, La Salle, Live Oak, and

Gonzales Counties)

Figure 3

- 25 . Monthly Casinghead Gas Production (MCF/month) in the

Eagle Ford Shale Play (Leon, Frio, Grimes, Robertson, De Witt,

Atascosa, Bee, Maverick, Lavaca, Zavala, Milam, Webb, and Wilson

Counties) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 KARNES

DIMMIT

LA SALLE

LIVE OAK

GONZALES

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 LEON

FRIO

GRIMES

ROBERTSON

DE WITT

ATASCOSA

BEE

MAVERICK

LAVACA

ZAVALA

MILAM

WEBB

WILSON

### 3

- 15 3.3 Haynesville Shale Gas Play

Figures 3

- 26 through 3

- 34 show the oil, condensate, and gas production from wells

in the Haynesville Shale counties. There is no oil produced from the Haynesville

Shale forma tion; the oil production shown in Figures 3

- 26 through 3

- 28 is likely

from wells tapping other geologic formations.

Figure 3

- 26 . Monthly Oil Well Production (BBL/month) in the

Haynesville Shale Play (Gregg, Rusk, Harrison, and Panola Counties)

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 GREGG

RUSK

HARRISON

PANOLA

### 3

- 16 Figure 3

- 27 . Monthly Oil Well Production (BBL/month) in the

Haynesville Shale Play (Shelby, Marion, and San Augustine Counties)

Figure 3

- 28 . Monthly Oil Well Production (BBL/month) in the

Haynesville Shale Play (Nacogdoches, Sabine, and Angelina Counties)

Similar to the Barnett Shale, the gas produced in the Haynesville Shale is a dry gas,

so there is very lit tle condensate associated with gas production. Condensate

production peaked in early 2009. 0 10,000 20,000 30,000 40,000 50,000 60,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 SHELBY

MARION

SAN AUGUSTINE

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 NACOGDOCHES

SABINE

ANGELINA

### 3

- 17 Figure 3

- 29 . Monthly Condensate Production (BBL/month) in the

Haynesville Shale Play (Panola, Harrison, Rusk, Nacogdoches, and

Gregg Counties)

Figure 3

- 30 . Monthly Condensate Production (BBL/month) in the

Haynesville Shale Play (Shelby, Marion, San Augustine, Angelina, and

Sabine Counties)

The total amount of casinghead gas produced in the Haynesville Shale (Figures 3

- 31

and 3

- 32 ) is insignificant relative to the amount of gas well gas produced in that

region (Figures 3

- 33 and 3

- 34 ). TRC figures indicate that casinghead gas 0 50,000 100,000 150,000 200,000 250,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 PANOLA

HARRISON

RUSK

NACOGDOCHES

GREGG

0 5,000 10,000 15,000 20,000 25,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 SHELBY

MARION

SAN AUGUSTINE

ANGELINA

SABINE

### 3

- 18 production was approximately 1 milli on cubic feet (MMCF) per month in 2011,

while gas well gas production was approximately 80 MMCF/month in the same

period. Production of gas appears to have peaked in 2010, and has decreased since

that time. The decline is most likely due to the drop in p rice of natural gas.

Figure 3

- 31 . Monthly Casinghead Gas Production (MCF/month) in the

Haynesville Shale Play (Shelby, Panola, Gregg, Rusk, and Harrison

Counties)

0 100,000 200,000 300,000 400,000 500,000 600,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 SHELBY

PANOLA

GREGG

RUSK

HARRISON

### 3

- 19 Figure 3

- 32 . Monthly Casinghead Gas Production (MCF/month) in the

Haynesville Shale Play (San Augustine, Marion, Nacogdoches, Sabine,

and Angelina Counties)

Figure 3

- 33 . Monthly Gas Wel l Production (MCF/month) in the

Haynesville Shale Play (Panola, Harrison, Rusk, Nacogdoches, and

Shelby Counties) 0 20,000 40,000 60,000 80,000 100,000 120,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 SAN AUGUSTINE

MARION

NACOGDOCHES

SABINE

ANGELINA

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 PANOLA

HARRISON

RUSK

NACOGDOCHES

SHELBY

### 3

- 20 Figure 3

- 34 . Monthly Gas Well Production (MCF/month) in the

Haynesville Shale Play (San Augustine, Gregg, Angelina, Marion, and

Sabine Counties)

3.4 Shale Play Production

Figure 3

- 35 below shows the effects of the price of natural gas on production of gas.

Prices peaked in 2008, and declined below $5 per MCF in 2009. Production began

to decli ne two years later. This lag is likely due to the time delay between signing

leases with landowners, drilling the well, and producing gas in order to ‘hold’ the

lease. 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 SAN AUGUSTINE

GREGG

ANGELINA

MARION

SABINE

### 3

- 21 Figure 3

- 35 . Combined Monthly Gas Well and Casinghead Gas

Production (MCF/month) by Texas Shale Play Region, Compared with

the Price of Natural Gas

Cumulative gas production from the Eagle Ford and Haynesville shale regions has

increased steadily over the last decade, while gas production fr om the Barnett Shale

has steadily accelerated. There has also been a steady increase in oil and

condensate production in the Eagle Ford shale play region since 2010 (Figures 3

- 36

through 3

- 38 ). $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 180,000,000 200,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 Barnett

Monthly Gas

Well and

Casinghead Gas

Production

(MCF/month)

Eagle Ford

Monthly Gas

Well and

Casinghead Gas

Production

(MCF/month)

Haynesville

Monthly Gas

Well and

Casinghead Gas

Production

(MCF/month)

Natural Gas

Well Head Price

($/MCF)

### 3

- 22 Figure 3

- 36

. Combined Cumulative Gas Well and Casinghead Gas

Production (MCF) by Texas Shale Play Region

Figure 3

- 37 . Combined Monthly Oil Well and Condensate Production

(BBL/month) by Texas Shale Play Region, Compared to WTI Crude Oil

Spot Price ($/BBL) 0 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 Barnett Cumulative

Gas Well and

Casinghead Gas

Production (MCF)

Eagle Ford Cumulative

Gas Well and

Casinghead Gas

Production (MCF)

Haynesville

Cumulative Gas Well

and Casinghead Gas

Production (MCF)

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 Barnett Monthly Oil

and Condensate

Production

(BBL/month)

Eagle Ford Monthly

Oil and Condensate

Production

(BBL/month)

Haynesville Monthly

Oil and Condensate

Production

(BBL/month)

WTI Crude Oil Spot

Price ($/BBL)

### 3

- 23 Figure 3

- 38 . Combined Cumulative Oil Well and Condensate Production

(BBL) by Texas Shale Play Region

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000Jan-00May-00Sep-00Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05May-05Sep-05Jan-06May-06Sep-06Jan-07May-07Sep-07Jan-08May-08Sep-08Jan-09May-09Sep-09Jan-10May-10Sep-10Jan-11May-11Sep-11Jan-12 Barnett Cumulative Oil

and Condensate

Production (BBL)

Eagle Ford Cumulative

Oil and Condensate

Production (BBL)

Haynesville

Cumulative Oil and

Condensate

Production (BBL)

### 3

- 24 3.5 2011 Shale Play Well Completions

Information on well completions in each of the shale play regions in 2011 was obtained through a commercial vendor

(RigData ® 

### ). Tables 3

- 1 through 3

- 3 summarize the number of completed wells in each county, by shale play region,

for the year 2011.

Table 3

- 1 . Barnett Shale Play Well Completions, 2011

County Gas Oil/Gas Oil GRAND

TOTAL Percent of Total

DIR HOR VER TOTAL DIR HOR VER TOTAL DIR HOR VER TOTAL Gas Oil/Gas Oil

ARCHER 2 54 56 2 56 58 114 0% 49% 51%

CLAY 4 6 10 2 2 12 0% 83% 17%

COMANCHE 3 3 2 2 5 0% 60% 40%

COOKE 8 88 7 103 1 18 19 122 0% 84% 16%

CORYELL 1 1 1 0% 100% 0%

DALLAS 2 2 4 4 6 33% 67% 0%

DENTON 67 1 68 26 26 94 72% 28% 0%

EASTLAN D 9 9 2 2 11 0% 82% 18%

ELLIS 4 4 4 0% 100% 0%

ERATH 4 4 6 6 10 40% 60% 0%

HOOD 2 5 25 13 13 38 66% 34% 0%

JACK 3 3 1 7 47 55 3 3 61 5% 90% 5%

JOHNSON 141 141 104 104 245 58% 42% 0%

MONTAGUE 1 1 3 195 7 205 1 8 9 215 0% 95% 4%

PALO PI NTO 2 2 1 4 12 17 3 3 22 9% 77% 14%

PARKER 78 78 16 16 94 83% 17% 0%

SHACKELFORD 1 31 32 16 16 48 0% 67% 33%

SOMERVE LL 5 5 5 100% 0% 0%

STEPHEN S 1 1 2 1 77 80 1 1 82 1% 98% 1%

TARRANT 149 149 1 359 360 509 29% 71% 0%

### 3

- 25 Table 3

- 1 . Barnett Shale Play Well Completions, 2011

County Gas Oil/Gas Oil GRAND

TOTAL Percent of Total

DIR HOR VER TOTAL DIR HOR VER TOTAL DIR HOR VER TOTAL Gas Oil/Gas Oil

WISE 70 3 73 84 2 86 1 1 160 46% 54% 1%

TOTAL 538 14 552 16 912 262 1,190 7 109 116 1,858 30% 64% 6%



### Table 3

- 2 . Eagle Ford Shale Play Well Completions, 2011

County Gas Oil/Gas Oil GRAND

TOTAL Percent of Total

DIR HOR VER TOTAL DIR HOR VER TOTAL DIR HOR VER TOTAL Gas Oil/Gas Oil

ATASCOSA 12 12 38 3 41 23 2 25 78 15% 53% 32%

BEE 1 2 3 1 2 34 37 40 8% 93% 0%

BRAZOS 5 5 15 2 17 22 0% 23% 77%

BRAZOS (S) 1 1 1 0% 100% 0%

BRAZOS LB 1 2 3 3 0% 100% 0%

BURLESO N 1 1 2 10 10 12 0% 17% 83%

DE WITT 158 1 159 24 2 26 5 1 6 191 83% 14% 3%

DIMMIT 5 5 311 1 312 62 1 63 380 1% 82% 17%

FRIO 1 1 2 80 8 88 7 3 10 100 2% 88% 10%

GONZALES 1 1 51 3 54 112 1 113 168 1% 32% 67%

HOUSTON 1 24 25 25 0% 100% 0%

KARNES 35 2 37 176 5 181 100 1 101 319 12% 57% 32%

LA SALL E 56 3 59 104 104 122 1 123 286 21% 36% 43%

LAMAR 1 1 1 0% 100% 0%

LAVACA 3 3 1 9 7 17 2 2 22 14% 77% 9%

LEE 6 1 7 9 9 16 0% 44% 56%

LEON 5 9 12 26 2 10 12 9 2 11 49 53% 24% 22%

LIVE OAK 1 30 1 32 55 24 79 10 2 12 123 26% 64% 10%

MAVERIC K 2 2 26 5 31 2 2 35 6% 89% 6%

### 3

- 26 Table 3

- 2 . Eagle Ford Shale Play Well Completions, 2011

County Gas Oil/Gas Oil GRAND

TOTAL Percent of Total

DIR HOR VER TOTAL DIR HOR VER TOTAL DIR HOR VER TOTAL Gas Oil/Gas Oil

MCMULLE N 29 4 33 74 16 90 42 42 165 20% 55% 25%

MILAM 3 57 60 2 27 29 89 0% 67% 33%

WEBB 1 144 8 153 10 184 31 225 1 1 2 380 40% 59% 1%

WILSON 21 1 22 17 8 25 47 0% 47% 53%

ZAVALA 24 5 29 1 17 2 20 49 0% 59% 41%

TOTAL 7 483 37 527 16 1,194 242 1,452 1 567 54 622 2,601 20% 56% 24%



### Table 3

- 3 . Haynesville Shale Play Well Completions, 2011

County Gas Oil/Gas Oil GRAND

TOTAL Percent of Total

DIR HOR VER TOTAL DIR HOR VER TOTAL DIR HOR VER TOTAL Gas Oil/Gas Oil

ANGELINA 1 1 2 2 3 33% 67% 0%

GRE GG 1 1 2 2 4 5 20% 80% 0%

HARRISON 1 36 9 46 1 4 3 8 54 85% 15% 0%

MAR ION 1 2 3 3 0% 100% 0%

NAC OGDOCHES 58 58 1 1 2 60 97% 3% 0%

PAN OLA 15 36 15 66 9 22 5 36 102 65% 35% 0%

RUSK 11 2 13 2 3 5 2 2 20 65% 25% 10%

SAB INE 3 3 3 100% 0% 0%

SAN

AUGUSTINE 55 55 1 1 56 98% 2% 0%

SHELBY 1 25 4 30 1 1 31 97% 3% 0%

TOT AL 17 225 31 273 10 34 18 62 2 2 337 81% 18% 1%

### 4

- 1 

## 4.0 Future Production Scenarios

ERG identified five approaches or methodologies that were used to forecast

production.

Methodology 1 : Project future production assuming that current production

remains constant into the future

.

Methodology 2 : Project future production levels based on the historical

production timelin e for each specific shale play, on a county

- by

- county basis.

Methodology 3 : Project future production level s based on the historical

production timelin e for each specific shale play, on a county

- by

- county basis,

with a capped limit based on the size of the reserves

.

Methodology 4 : Project future production levels for counties in the Barnett

shale play and use a s a surrogate for the counties in the Haynesville Shale and

Eagle Ford Shale plays

.

Methodology 5 : Project future production by using natural gas commodity

price projections as a surrogate for future production.

Each of the five methodologies were used to develop production forecasts for each

shale play region (Section 5.0 ). From those, three unique future production

scenarios were identified: aggressive production growth, conservative production

growth, and moderate production growth. The five projections of future production

were based either on the available historical data described previously (see

Section 3.0 ), or on 2011 production data, depending on the forecast methodology

used.

Details on the production forecast calculations according to each of t he five

methodologies are discussed in Section 5.0 below. The approaches for

methodologies 2 and 3 employed a “top

- down” method of production forecasting

based on the entire shale play region in consideration and not on individual well

production.

### 5

- 1 

## 5.0 Calculation Methodologies

5.1 Methodology 1

Under methodology 1, it was assumed that the 2011 annual production for each shale

play region would remain constant for each year 2012 through 2035. Under this

scenario, it was assumed that there will not be a change in annual average production

rate from the base year 2011 to each year 2012 through 2035 and so the production

growth factor for each year is 1.

5.2 Methodology 2

For each shale play, the first year of production was assumed to be the year 2000.

Cumulative production of oil, natural gas, and condensate were calculated for each

shale play region based on the historical monthly production data from 2000

through 2011 obtained from the TRC. For each shale play, models were fit to the

cumulativ e production of oil, natural gas, and condensate for each shale play. The

models varied from linear equations to third order polynomials and each model was

adjusted by varying the constant in each model equation so that the modeled 2011

cumulative product ion matched the actual 2011 cumulative production. After

developing the cumulative production models, each model equation was

differentiated resulting in a model for the annual production rate. Future annual

production of oil, natural gas, and condensate in each shale play from 2012 to 2035

was projected based on the annual production rate models. Using a base year of

2011, growth factors for each shale play were developed by dividing the projected

annual production of oil, natural gas, or condensate in a given year by the actual

production in 2011.

5.3 Methodology 3

As with Methodology 2, cumulative production of oil, natural gas, and condensate

were calculated for each shale play region based on the historical monthly

production data from 2000 through 2011 obtained from the TRC. Methodology 3 as

described in this section was then used to model historic cumulative production and

to project cumulative and annual production for oil, natural gas, and condensate

from the three Texas shale play regions.

Attempts at calculating depletion times for oil reserves have been made since the

early twentieth century. 4 

### Furthermore, these methods evolved from predicting well

or field

- level production using exponential or hyperbolic decline curves to

4 Brandt, A. “Review of mathematical models of future oil supply: Historical overview and synthesizing critique.”

Energy 35 (2010) 3958

- 3974.

### 5

- 2 predicting production at larger regional and global scales using statistical and

curve

- fitting methods.

One of the most well

- known and simplest curve fitting models is Hubbert’s logistic

model. Hubbert published his model in 1956 5 

### but did not provide a full derivation

until 1980

. 6 

### Brandt classifies Hubbert’s model as hypothetical and physically

- based

and argues that, as a curve

- fitting model, it is useful for first order production

projections. The model is based on certain simplifying assumptions, as noted by

Brandt:

1. Yearly pr oduction is modeled as the first derivative of the logistic function;

2. The production profile is symmetric;

3. There is a time lag where production follows discovery; and

4. Production follows a single cycle; increasing and decreasing with a single

peak.

Despite the assumptions and simple nature of the model, production profiles in

various areas have been successfully modeled using the Hubbert logistic model. 7



### However, the model does not account for various economic, political, or other

factors or conditions that may affect production but is based on historic cumulative

production and estimates of ultimately recoverable resources. Multi

- cycle Hubbert

models can be used to account for various changes in conditions that affect

production, as Clark has demonstrated for the Barnett shale play by matching

historical production in the Barnett shale to a multi

- cycle Hubbert model based on

three cycles: one for original production in the region during the first decade, a

second beginning in 2004 with the advent of horizon tal drilling and an increase in

natural gas prices, and a third cycle beginning in 2010 when natural gas prices again

achieved another short term peak.

5 Hubber t, M. “Nuclear energy and fossil fuels.” In: Meeting of the Southern District, Division of Production,

American Petroleum Institute. San Antonio, TX: Shell Development Company; 1956

. 6 Hubbert, M. “Techniques of prediction as applied to the production of o il and gas.” In: Symposium on oil and gas

supply modeling. Washington, DC: Department of Commerce, National Bureau of Standards; 1980.

7 Clark, AJ. “Decline Curve Analysis in Unconventional Resou r ce Plays Using Logistic Growth Models.” Master’s

Degree Thes is, The University of Texas at Austin, August 2011.

### 5

- 3 The Hubbert model for cumulative production is a logistic growth function:

Q ( t )

= Q

∞



### 1 + N

o 

### e − a ( t

− t o )



### (Eq. 5

- 1)

Where :

Q ( t ) = total cumulative production in year t

Q

∞ 

### = estimated ultimate recovery (EUR) or ultimately recoverable

resources (URR)

N

o 

### = ( Q ∞ − Q o )

Q o 

### , where Q

o 

### = cumulative production in base year 2011

a = model parameter

t

= year

t

o 

### = base year (2011)

Taking the derivative of the above equation results in an equation for the production

rate ( P(t) ):

P ( t )

= dQ

dt = aQ

∞ 

### N O 

### e − a ( t

− t o )



### ( 1 + N

o 

### e − a ( t

− t o ) 

### ) 2



### (Eq. 5

- 2)

The parameters a and Q

∞ 

### can be determined by plotting the r atio of production rate

and cumulative production against cumulative production. Assuming the plot of

those data can be fit to a linear function:

dQ

dt

Q = P ( t )

Q ( t ) =

− a

Q

∞ 

### Q + a

(Eq. 5

- 3)

The parameter a can be determined from the y

- intercept of the line. The slope of

the line is

− a

Q ∞ 

### , where Q

∞ 

### = slope /

− a . After plotting the above equation and

making initial estimates for a and Q

∞ 

### , the model cumulative production equation

was used to determine th e goodness

- of

- fit to the actual cumulative production data

using the initial estimates of a and Q

∞ 

### . Published EIA estimates of TRRs for Barnett

and Haynesville oil and condensate were not available and thus Q

∞ 

### was estimated as

a result of using the above linearization approach. Published estimates of TRR from

the EIA were available for: Eagle Ford oil, condensate, and natural gas; and Barnett

and Haynesville natural gas 8 

### and are presented in Table 5

- 1

.

8 “ Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays,” U.S. Energy Information Administration,

July 2011.

### 5

- 4 Table 5

- 1 . EIA TRR Data for the Texas Shale Plays

Haynesville Barnett Eagle Ford

Active Undeveloped Active Undeveloped Dry Gas

Zone Condensate Zone Oil Zone



### TRR

(TCF) 53.3 19.41 23.81 19.56 4.38 16.43 ND

TRR

(BBO) ND ND ND ND ND ND 3.35

ND

– no data

TRR

– Technically Recoverable Resources

TCF

– trillion cubic feet



### The Eagle Ford and Barnett shale plays are contained entirely within Texas, but the

Haynesville play straddles both Texas and Louisiana. Since the TRR values for the

Haynesville play reflect natural gas resource estimates for the entire play, a Q

∞ 

### value

had to be estimated for the Haynesville play that reflected an estimate of EUR from

only the Texas portion of the play. This was accomplished by using the linearization

technique described abo ve based on the historic natural gas production data for the

Texas portion of the Haynesville shale play region.

For those regions and products where published estimates of TRR were available

from the EIA, Q

∞ 

### was calculated using the following equation:

Q

∞ 

### = Q ( t ) + ( TRR ) � 1 + GR

p



### 100 �

(Eq. 5

- 4)

Where :

TRR = technically recoverable resources (as of 2011)

GR p 

### = overall growth rate (2010 through 2035) of TRR for product p , %

TRR estimates change over time largely due to advances in technology or resource

estimation methods. EIA data on end of year reserves growth rates from 2010

through 2035 for both lower 48 oil reserves and lower 48 natural gas reserves 9



### under the high TRR assumption (1.4% and 1.0% for oil and gas, respectively) were

used as surrogates for oil and gas TRR growth rates. It was assumed that the overall

TRR growth rate for 2010 through 2035 would be the same for 2011 through 2035.

The calculated Q

∞ 

### just descr ibed was used in the model cumulative production and

model annual production equations for Eagle Ford oil, condensate, and natural gas;

9 EIA, AEO2012, Oil and Gas Supply Data Tables

.

### 5

- 5 and Barnett natural gas instead of the estimated Q

∞ 

### determined using the

linearization approach.

In all cases, after Q∞ was estimated (either by linearization or calculated using the

published TRR), the a parameters were adjusted such that the modeled annual

cumulative production in 2011 matched the actual cumulative production in 2011.

5.4 Methodology 4

Annual growth factors f or oil, natural gas, and condensate production were

calculated from historic production for the Barnett shale play region for those three

products for the years 2001 through 2035 using a base year of 2000. Those growth

factors were calculated for the Barn ett shale play region using the modeled annual

production results calculated from methodology 3 discussed above (results

presented in sections below). It is assumed that since the Barnett shale play region

is more mature and has a more robust set of histo rical data, the annual change in

production from the Barnett shale play beginning in the 2000

- 2001 time frame

would mirror the annual change in production for the Eagle Ford and Haynesville

shale play regions beginning in the 2008

- 2009 time frame. That is , the annual

change in production for Barnett in the years 2001 through 2027 would be the same

for the other two shale play regions for the years 2009 through 2035. The result of

this assumption is that the annual growth factors for Eagle Ford and Haynesv ille

calculated beginning in 2012 with a base year of 2011 are the annual growth factors

for the Barnett shale play region beginning in 2004 with a base year of 2003 (i.e., a

time period shift of 8 years). The results of these calculations are presented i n

Table 5

- 2 below and presented graphically in Figure 5

- 1.

Table 5

- 2 . Barnett Shale Play Region Calculated Annual Growth Factors for

Years 2004 through 2027

Year Methodology 3 Annual Growth Factor for Barnett Shale Play

Region

(Base Year 2003) Annual Growth Factor

Applies to Eagle Ford and

Haynesville Shale Play

Regions For Year... Oil Production Gas Production Condensate

Production

2004 1.108 1.196 0.992 2012

2005 1.224 1.513 0.947 2013

2006 1.447 2.065 0.953 2014

2007 1.678 3.050 0.997 2015

2008 2.003 4.361 1.117 2016

2009 1.864 4.762 1.084 2017

2010 1.631 4.927 1.216 2018

2011 1.658 5.212 1.359 2019

2012 1.777 10.597 1.863 2020

### 5

- 6 Table 5

- 2 . Barnett Shale Play Region Calculated Annual Growth Factors for

Years 2004 through 2027

Year Methodology 3 Annual Growth Factor for Barnett Shale Play

Region

(Base Year 2003) Annual Growth Factor

Applies to Eagle Ford and

Haynesville Shale Play

Regions For Year... Oil Production Gas Production Condensate

Production

2013 1.335 11.516 1.794 2021

2014 0.949 11.522 1.668 2022

2015 0.648 10.613 1.502 2023

2016 0.431 9.058 1.314 2024

2017 0.282 7.241 1.120 2025

2018 0.182 5.494 0.935 2026

2019 0.116 4.005 0.766 2027

2020 0.074 2.836 0.618 2028

2021 0.047 1.967 0.493 2029

2022 0.030 1.345 0.389 2030

2023 0.019 0.911 0.305 2031

2024 0.012 0.612 0.238 2032

2025 0.008 0.410 0.184 2033

2026 0.005 0.274 0.143 2034

2027 0.003 0.182 0.110 2035



### Figure 5

- 1 . Methodology 3 Annual Growth Factors (Base Year 2003) for

Oil, Natural Gas, and Condensate Production for the Barnett Shale Play

Region (2004

- 2027)

0.000 2.000 4.000 6.000 8.000 10.000 12.000 14.000Annual Growth Factor (Base YEar 2003)

Oil Gas Condensate

### 5

- 7 5.5 Methodology 5

Future production was estimated using the EIA crude oil and natural gas price

projections (lower 48 wellhead prices) for 2012 through 2035

. 10 

### Annual changes in

price were calculated for both oil and gas production relative to 2011. It was

assumed that the calculated annual change in crude oil price would apply to

condensate production. Table 5

- 3 shows the projected price and calculated annua l

growth factors from base year 2011. Figures 5

- 2 and 5

- 3 show the annual change in

projected crude oil and natural gas prices from 2012 through 2035, respectively.

Table 5

- 3 . EIA Crude Oil and Natural Gas We llhead Price Projections

(2012

- 2035) and Calculated Annual Growth Factors

Year Crude Oil,

Lower 48 Average

Wellhead Price

(2010 $/barrel) Annual Oil Growth

Factor (Base Year

2011) Natural Gas,

Lower 48 Average

Wellhead Price

(2010 $/MCF) Annual Natural Gas

Growth Factor (Base

Year 2011)

2011 94.46 NA 3.81 NA

2012 96.34 1.020 3.40 0.892

2013 104.38 1.105 3.73 0.979

2014 111.90 1.185 3.83 1.005

2015 117.84 1.248 3.94 1.034

2016 119.92 1.270 3.91 1.026

2017 122.09 1.293 3.94 1.034

2018 122.57 1.298 3.98 1.045

2019 123.47 1.307 4.09 1.073

2020 124.44 1.317 4.19 1.100

2021 125.71 1.331 4.41 1.157

2022 127.33 1.348 4.66 1.223

2023 128.40 1.359 4.85 1.273

2024 129.38 1.370 4.97 1.304

2025 130.30 1.379 5.12 1.344

2026 131.07 1.388 5.24 1.375

2027 131.65 1.394 5.39 1.415

2028 131.82 1.396 5.47 1.436

2029 132.51 1.403 5.57 1.462

2030 130.74 1.384 5.69 1.493

2031 131.47 1.392 5.81 1.525

2032 132.94 1.407 5.95 1.562

2033 134.40 1.423 6.06 1.591

2034 135.91 1.439 6.36 1.669

2035 137.55 1.456 6.64 1.743

NA

– not applicable

10 EIA, AEO2012, Oil and Gas Supply Data Tables.

### 5

- 8 Figure 5

- 2 . EIA Projected Crude Oil Wellhead Price and Annual Growth

Factor (2012

- 2035)

Figure 5

- 3 . EIA Projected Natural Gas Wellhead Price and Annual Growth

Factor (2012

- 2035) 1.000 1.050 1.100 1.150 1.200 1.250 1.300 1.350 1.400 1.450 1.500

90 95 100 105 110 115 120 125 130 135 140

2012 2017 2022 2027 2032Annual Growth Factor(Base Year 2011)Crude Oil, Lower 48 Wellhead Price(2010 $/barrel)

Crude Oil, Lower 48 Average Wellhead Price (2010 $/barrel)

Annual Growth Factor (Base Year 2011)

0.800 0.900 1.000 1.100 1.200 1.300 1.400 1.500 1.600 1.700 1.800

3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00

2012 2017 2022 2027 2032Annual Growth Factor(Base Year 2011)Natural Gas, Lower 48 Wellhead Price(2010 $/Mcf)

Natural Gas, Lower 48 Average Wellhead Price (2010 $/Mcf)

Annual Growth Factor (Base Year 2011)

### 6

- 1 

## 6.0 Results of Methodologies 2 and 3

The results of the growth factor development under methodologies 2 and 3 for the three

shale play regions are presented in this sec tion.

6.1 Barnett Shale Play Region

6.1.1 Methodology 2

Curve fitting under methodology 2 for the Barnett shale play region resulted in the

models for cumulative production and annual production as shown in Table 6

- 1 . Gas

volumes are stated as MCF.

Table 6

- 1 . Methodology 2 Production Models for Barnett Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, B

− 2 ( barrels )

= ( 10

, 292

, 556 ) ( t )

− 20

, 569

, 673

, 956 P ( t ) Oil

, B

− 2 = dQ

dt Oil

, B

− 2 � barrels

yr �

= 10

, 292

, 556

Gas Q G

, B

− 2 ( MCF )

= 112

, 910

, 668 ( t 2 )

− 451

, 844

, 908

, 182 ( t )

+ 452

, 047

, 677

, 466

, 719 P ( t ) G

, B

− 2 = dQ

dt G

, B

− 2 � MCF

yr �

= 225

, 821

, 336 ( t )

− 451

, 844

, 908

, 182

Condensate Q C

, B

− 2 ( barrels )

= 99

, 414 ( t 2 )

− 396

, 665

, 142 ( t )

+ 395

, 673

, 095

, 960 P ( t ) C

, B

− 2 = dQ

dt C

, B

− 2 � barrels

yr �

= 198

, 828 ( t )

− 396

, 665

, 141



### Figures 6

- 1 and 6

- 2 present actual and modeled historic oil production, and projected

oil production, respectively. Figures 6

- 3 and 6

- 4 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

- 5

and 6

- 6 present actual and modeled historic condensate production, and projected

condensate production, respectively.

### 6

- 2 Figure 6

- 1 . Methodology 2 Model Fit to Historic Oil Production from the

Barnett Shale Play Region (2000

- 2011)

Figure 6

- 2 . Methodology 2 Projected Cumulative and Annual Oil Production

from the Barnett Shale Play Region (2012

- 2035) 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 3 Figure 6

- 3 . Methodology 2 Model Fit to Historic Natural Gas Production

from the Barnett Shale Play Region (2000

- 2011)

Figure 6

- 4 . Methodology 2 Projected Cumulative and Annual Natural Gas

Production from the Barnett Shale Play Region (2012

- 2035) 0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000

0 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000 8,000,000,000 9,000,000,000

0 20,000,000,000 40,000,000,000 60,000,000,000 80,000,000,000 100,000,000,000 120,000,000,000 140,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 4 Figure 6

- 5 . Methodology 2 Model F it to Historic Condensate Production

from the Barnett Shale Play Region (2000

- 2011)

Figure 6

- 6 . Methodology 2 Projected Cumulative and Annual Condensate

Production from the Barnett Shale Play Region (2012

- 2035) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 180,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 5 6.1.2 Methodology 3

Model development under methodology 3 for the Barnett shale play region resulted in

the models for cumulative production and annual production as shown in Table 6

- 2

.

Table 6

- 2

. Methodology 3 Production Models for Barnett Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, B

− 3 ( barrels )

= 273

, 909

, 069

1 + ( 22

. 91 ) e − 0

. 2696 ( t

− 2011 ) P ( t ) Oil

, B

− 3 � barrels

yr �

= dQ

dt

Oil

, B

− 3

= ( 0

. 2696 ) ( 273

, 909

, 069 ) ( 22

. 91 ) e − 0

. 2696 ( t

− 2011 )

( 1 + ( 22

. 91 ) e − 0

. 2696 ( t

− 2011 ) ) 2

Gas Q G

, B

− 3 ( MCF )

= 44

, 086

, 646

, 422

1 + ( 254

. 7 ) e − 0

. 4102 ( t

− 2011 ) P ( t ) G

, B

− 3 � MCF

yr �

= dQ

dt G

, B

− 3

= ( 0

. 4102 ) ( 44

, 086

, 646

, 422 ) ( 254

. 7 ) e − 0

. 4102 ( t

− 2011 )

( 1 + ( 254

. 7 ) e − 0

. 4102 ( t

− 2011 ) ) 2

Condensate Q C

, B

− 3 ( barrels )

= 32

, 871

, 770

1 + ( 71

. 08 ) e − 0

. 4586 ( t

− 2011 ) P ( t ) C

, B

− 3 � barrels

yr �

= dQ

dt C

, B

− 3

= ( 0

. 4586 ) ( 32

, 871

, 770 ) ( 71

. 08 ) e − 0

. 4586 ( t )

( 1 + ( 71

. 08 ) e − 0

. 4586 ( t

− 2011 ) ) 2



### The estimated model parameters are summarized in Table 6

- 3

.

Table 6

- 3 . Summary of Methodology 3 Production

Model Parameters

Product Q

∞ a No

Oil 273,909,069 0.2696 21.91

Gas 44,086,646,422 0.4102 254.7

Condensate 32,871,770 0.4586 71.08



### Figures 6

- 7 and 6

- 8 present actual and modeled historic oil production, and projected

oil production, respectively. Figures 6

- 9 and 6

- 10 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

- 11

and 6

- 12 pr esent actual and modeled historic condensate production, and projected

condensate production, respectively.

A summary of the annual growth factors calculated for the Barnett S hale play region

under all five methodologies is presented in Table 6

- 4 . Annual growth factors for 2012

through 2035 calculated for all five methodologies are presented in Figures 6

- 13

through 6

- 15 for oil production, gas production, and condensate production,

respectively.

### 6

- 6 Figure 6

- 7 . Methodology 3 Model Fit to Historic Oil Production from the

Barnett Shale Play Region (2000

- 2011)

Figure 6

- 8 . Methodology 3 Projected Cumulative and Annual Oil Production

from the Barnett Shale Play Region (2012

- 2035) 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 7 Figure 6

- 9 . Methodology 3 Model Fit to Historic Natural Gas Production

from the Barnett Shale Play Region (2000

- 2011)

Figure 6

- 10 . Methodology 3 Projected Cumulative and Annual Natural Gas

Production from the Barnett Shale Play Region (2012

- 2035) 0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000

0 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 4,500,000,000 5,000,000,000

0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000 25,000,000,000 30,000,000,000 35,000,000,000 40,000,000,000 45,000,000,000 50,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 8 Figure 6

- 11 . Methodology 3 Model Fit to Historic Condensate Production

from the B arnett Shale Play Region (2000

- 2011)

Figure 6

- 12 . Methodology 3 Projected Cumulative and Annual Condensate

Production from the Barnett Shale Play Region (2012

- 2035) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 9 Table 6

- 4 . Summary of Production Growth Factors for Barnett Shale Play Region for Methodologies 1

– 5

Oil Gas Condensate

Methodology Methodology Methodology

Year 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.000 0.998 NA 1.020 1.000 1.099 1.173 NA 0.892 1.000 1.063 0.808 NA 1.020

2013 1.000 1.000 0.961 NA 1.105 1.000 1.198 1.275 NA 0.979 1.000 1.125 0.607 NA 1.105

2014 1.000 1.000 0.894 NA 1.185 1.000 1.297 1.275 NA 1.005 1.000 1.188 0.431 NA 1.185

2015 1.000 1.000 0.805 NA 1.248 1.000 1.396 1.175 NA 1.034 1.000 1.250 0.295 NA 1.248

2016 1.000 1.000 0.704 NA 1.270 1.000 1.495 1.002 NA 1.026 1.000 1.313 0.196 NA 1.270

2017 1.000 1.000 0.600 NA 1.293 1.000 1.594 0.801 NA 1.034 1.000 1.375 0.128 NA 1.293

2018 1.000 1.000 0.501 NA 1.298 1.000 1.693 0.608 NA 1.045 1.000 1.438 0.083 NA 1.298

2019 1.000 1.000 0.410 NA 1.307 1.000 1.792 0.443 NA 1.073 1.000 1.500 0.053 NA 1.307

2020 1.000 1.000 0.331 NA 1.317 1.000 1.891 0.314 NA 1.100 1.000 1.563 0.034 NA 1.317

2021 1.000 1.000 0.264 NA 1.331 1.000 1.990 0.218 NA 1.157 1.000 1.625 0.021 NA 1.331

2022 1.000 1.000 0.209 NA 1.348 1.000 2.089 0.149 NA 1.223 1.000 1.688 0.014 NA 1.348

2023 1.000 1.000 0.164 NA 1.359 1.000 2.188 0.101 NA 1.273 1.000 1.751 0.009 NA 1.359

2024 1.000 1.000 0.127 NA 1.370 1.000 2.287 0.068 NA 1.304 1.000 1.813 0.005 NA 1.370

2025 1.000 1.000 0.099 NA 1.379 1.000 2.386 0.045 NA 1.344 1.000 1.876 0.003 NA 1.379

2026 1.000 1.000 0.076 NA 1.388 1.000 2.484 0.030 NA 1.375 1.000 1.938 0.002 NA 1.388

2027 1.000 1.000 0.059 NA 1.394 1.000 2.583 0.020 NA 1.415 1.000 2.001 0.001 NA 1.394

2028 1.000 1.000 0.045 NA 1.396 1.000 2.682 0.013 NA 1.436 1.000 2.063 0.001 NA 1.396

2029 1.000 1.000 0.035 NA 1.403 1.000 2.781 0.009 NA 1.462 1.000 2.126 0.001 NA 1.403

2030 1.000 1.000 0.027 NA 1.384 1.000 2.880 0.006 NA 1.493 1.000 2.188 0.000 NA 1.384

2031 1.000 1.000 0.020 NA 1.392 1.000 2.979 0.004 NA 1.525 1.000 2.251 0.000 NA 1.392

2032 1.000 1.000 0.016 NA 1.407 1.000 3.078 0.003 NA 1.562 1.000 2.314 0.000 NA 1.407

2033 1.000 1.000 0.012 NA 1.423 1.000 3.177 0.002 NA 1.591 1.000 2.376 0.000 NA 1.423

2034 1.000 1.000 0.009 NA 1.439 1.000 3.276 0.001 NA 1.669 1.000 2.439 0.000 NA 1.439

2035 1.000 1.000 0.007 NA 1.456 1.000 3.375 0.001 NA 1.743 1.000 2.501 0.000 NA 1.456

NA

– not applicable

### 6

- 10 Figure 6

- 13 . Oil Production Annual Growth Factors for Barnett Shale Play

Region (2012

- 2035)

Figure 6

- 14 . Gas Production Annual Growth Factors for Barnett Shale Play

Region (2012

- 2035) 0.000 0.200 0.400 0.600 0.800 1.000 1.200 1.400 1.600

2012 2017 2022 2027 2032

Methodology 1 Methodology 2

Methodology 3 Methodology 5

0.000 0.500 1.000 1.500 2.000 2.500 3.000 3.500 4.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2

Methodology 3 Methodology 5

### 6

- 11 Figure 6

- 15 . Condensate Annual Growth Factors f or Barnett Shale Play

Region (2012

- 2035)

Using the annual growth rates presented in Table 6

- 4 for each of the five projection

methodologies, the projected annual production of oil, gas, and condensate as well as

total cumulative production for 2012 thro ugh 2035 can be estimated. From those

estimates, high growth rate, moderate growth rate, and low growth rate scenarios can be

identified (Table 6

- 5 ).

Table 6

- 5 . Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Barnett Shale Play Region

Product Methodology b Projected Cumulative Production (2012

- 2035) Growth Scenario

Oil

(barrels) 5 (EIA) 427,424,566 High

1 (Constant) 321,482,016 Moderate c

2 (Curve Fit) 321,482,016

3 (Hubbert) 98,757,971 Low

4 (Barnett) NA

Gas a

(MCF) 2 (Curve Fit) 112,291,173,260 High

5 (EIA) 64,336,215,175 Moderate c 1 (Constant) 50,195,422,488

3 (Hubbert) 18,270,442,813 Low

4 (Barnett) NA

Condensate

(barrels) 2 (Curve Fit) 104,726,625 High

5 (EIA) 78,142,293 Moderate c 1 (Constant) 58,773,744

3 (Hubbert) 6,595,039 Low

4 (Barnett) NA

NA

– not applicable

a Includes both gas well gas and casinghead gas.

b Methodology 1

– 2011 annual production assumed constant through 2035

Methodology 2

– cumulative production model developed based on fitting historical cumulative production data to

a second or third order polynomial function

Methodology 3

– cumulative production model based on Hubbert’s logistic growth model

Methodology 4

– Historic annual production data from the Barnett shale play region used as a surrogate for the

Eagle Ford and Haynesville shale play regions.

Methodology 5

– EIA natural gas wellhead price projection s through 2035 used as a surrogate for production.

c Either methodology could be used as the moderate growth rate. 0.000 0.500 1.000 1.500 2.000 2.500 3.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2

Methodology 3 Methodology 5

### 6

- 12 6.2 Eagle Ford Shale Play Region

6.2.1 Methodology 2

Curve fitting under methodology 2 for the Eagle Ford shale play region resulted in the

models for cumulative production and annual production as shown in Table 6

- 6

.

Table 6

- 6 . Methodology 2 Production Models for Eagle Ford Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, EF

− 2 ( barrels )

= 174

, 142 ( t 3 )

− 1

, 047

, 423

, 000 ( t 2 )

+ 2

, 100

, 012

, 736

, 153 ( t )

− 1

, 403

, 471

, 303

, 059

, 310 P ( t ) Oil

, EF

− 2 = dQ

dt Oil

, EF

− 2 � barrels

yr �

= 522

, 427 ( t 2 )

− 2

, 094

, 846

, 001 ( t )

+ 2

, 100

, 012

, 736

, 153

Gas Q G

, EF

− 2 ( MCF )

= 16

, 123

, 009 ( t 2 )

− 63

, 867

, 639

, 351 ( t )

+ 63

, 244

, 089

, 597

, 252 P ( t ) G

, EF

− 2 = dQ

dt G

, EF

− 2 � MCF

yr �

= 32

, 246

, 018 ( t )

− 63

, 867

, 639

, 351

Condensate Q C

, EF

− 2 ( barrels )

= 114

, 408 ( t 3 )

− 687

, 935

, 776 ( t 2 )

+ 1

, 378

, 858

, 989

, 202 ( t )

− 921

, 236

, 878

, 299

, 155 P ( t ) C

, EF

− 2 = dQ

dt C

, EF

− 2 � barrels

yr �

= 343

, 233 ( t 2 )

− 1

, 375

, 871

, 553 ( t )

+ 1

, 378

, 858

, 989

, 202



### Figures 6

- 16 and 6

- 17 present actual and modeled historic oil production, and projected

oil production, respectively . Figures 6

- 18 and 6

- 19 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

-

20 and 6

- 21 present actual and modeled historic condensate production, and projected

condensate production, respectively.

### 6

- 13 Figure 6

- 16 . Methodology 2 Model Fit to Historic Oil Production from the

Eagle Ford Shale Play Region (2000

- 2011)

Figure 6

- 17 . Methodology 2 Projected Cumulative and Annual Oil

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000

0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 14 Figure 6

- 18 . Methodology 2 Model Fit to Historic Natural Gas Production

from the Eagle Ford Shale Pla y Region (2000

- 2011)

Figure 6

- 1 9 . Methodology 2 Projected Cumulative and Annual Natural Gas

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000

0 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000 2,000,000,000

0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000 25,000,000,000 30,000,000,000 35,000,000,000 40,000,000,000 45,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 15 Figure 6

- 20 . Methodology 2 Model Fit to Historic Condensate Production

from the Eagle Ford Shale Play Region (2000

- 2011)

Figure 6

- 21 . Methodology 2 Projected Cumulative and Annual Condensate

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000

0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 16 6.2.2 Methodology 3

Model development under methodology 3 for the Eagle Ford shale play region resulted

in the models for cumulative production and annual production as shown in Table 6

- 7

.

Table 6

- 7 . Methodology 3 Production Models for Eagle Ford Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, EF

− 3 ( barrels )

= 2

, 959

, 150

, 515

1 + ( 126

. 3 ) e − 0

. 2239 ( t

− 2011 ) P ( t ) Oil

, EF

− 3 � barrels

yr �

= dQ

dt

Oil

, EF

− 3

= ( 0

. 2239 ) ( 2

, 959

, 150

, 515 ) ( 126

. 3 ) e − 0

. 2239 ( t

− 2011 )

( 1 + ( 126

. 3 ) e − 0

. 2239 ( t

− 2011 ) ) 2

Gas Q G

, EF

− 3 ( MCF )

= 30

, 040

, 036

, 771

1 + ( 41

. 87 ) e − 0

. 0

. 2626 ( t

− 2011 ) P ( t ) G

, EF

− 3 � MCF

yr �

= dQ

dt G

, EF

− 3

= ( 0

. 2626 ) ( 30

, 040

, 0 36

, 771 ) ( 41

. 87 ) e − 0

. 2626 ( t

− 2011 )

( 1 + ( 41

. 87 ) e − 0

. 2626 ( t

− 2011 ) ) 2

Condensate Q C

, EF

− 3 ( barrels )

= 766

, 596

, 670

1 + ( 156

. 4 ) e − 0

. 2601 ( t

− 2011 ) P ( t ) C

, EF

− 3 � barrels

yr �

= dQ

dt C

, EF

− 3

= ( 0

. 2601 ) ( 766

, 696

, 670 ) ( 156

. 4 ) e − 0

. 2601 ( t

− 2011 )

( 1 + ( 156

. 4 ) e − 0

. 2601 ( t

− 2011 ) ) 2



### The estimated model parameters are summarized in Table 6

- 8

.

Table 6

- 8 . Summary of Methodology 3 Production

Model Parameters

Product Q

∞ a No

Oil 2,959,150,515 0.2239 126.3

Gas 30,040,036,771 0.2626 41.87

Condensate 766,596,670 0.2601 156.4



### Figures 6

- 22 and 6

- 23 present actual and modeled historic oil production, and projected

oil production, respectively. Figures 6

- 24 and 6

- 25 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

- 26

and 6

- 27 present actual and modeled historic condensate production, and projected

condensate production, respectively.

A summary of the annual growth factors calculated for the Eagle Ford S hale play region

under all five methodologies is presented in Table 6

- 9 . Annual growth factors for 2012

through 2035 calculated for all five methodologies are presented in Figures 6

- 28

through 6

- 30 for oil production, gas production, and conde nsate production,

respectively.

### 6

- 17 Figure 6

- 22 . Methodology 3 Model Fit to Historic Oil Production from the

Eagle Ford Shale Play Region (2000

- 2011)

Figure 6

- 23 . Methodology 3 Projected Cumulative and Annual Oil

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 180,000,000

0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 18 Figure 6

- 24 . Methodology 3 Model Fit to Historic Natural Gas Production

from the Eagl e Ford Shale Play Region (2000

- 2011)

Figure 6

- 25 . Methodology 3 Projected Cumulative and Annual Natural Gas

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000

0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000 8,000,000,000 9,000,000,000 10,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000

0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000 25,000,000,000 30,000,000,000 35,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 19 Figure 6

- 26 . Methodology 3 Model Fit to Historic Condensate Production

from the Eagle Ford Shale Play Region (2000

- 2011)

Figure 6

- 27 . Methodology 3 Projected Cumulative and Annual Con densate

Production from the Eagle Ford Shale Play Region (2012

- 2035) 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000

0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000 800,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 20 Table 6

- 9 . Summary of Production Growth Factors for Eagle Ford Shale Play Region for Methodologies 1

– 5

Year Oil Gas Condensate

Methodology Methodology Methodology

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.201 1.199 0.992 1.020 1.000 1.033 1.094 1.196 0.892 1.000 1.278 1.223 1.108 1.020

2013 1.000 1.433 1.425 0.947 1.105 1.000 1.066 1.160 1.513 0.979 1.000 1.595 1.473 1.224 1.105

2014 1.000 1.695 1.674 0.953 1.185 1.000 1.099 1.189 2.065 1.005 1.000 1.951 1.743 1.447 1.185

2015 1.000 1.987 1.941 0.997 1.248 1.000 1.132 1.177 3.050 1.034 1.000 2.346 2.019 1.678 1.248

2016 1.000 2.311 2.217 1.117 1.270 1.000 1.165 1.127 4.361 1.026 1.000 2.780 2.281 2.003 1.270

2017 1.000 2.664 2.489 1.084 1.293 1.000 1.198 1.044 4.762 1.034 1.000 3.252 2.507 1.864 1.293

2018 1.000 3.049 2.740 1.216 1.298 1.000 1.231 0.939 4.927 1.045 1.000 3.763 2.672 1.631 1.298

2019 1.000 3.463 2.953 1.359 1.307 1.000 1.263 0.821 5.212 1.073 1.000 4.313 2.756 1.658 1.307

2020 1.000 3.909 3.110 1.863 1.317 1.000 1.296 0.702 10.597 1.100 1.000 4.903 2.749 1.777 1.317

2021 1.000 4.385 3.197 1.794 1.331 1.000 1.329 0.587 11.516 1.157 1.000 5.530 2.651 1.335 1.331

2022 1.000 4.891 3.205 1.668 1.348 1.000 1.362 0.483 11.522 1.223 1.000 6.197 2.476 0.949 1.348

2023 1.000 5.428 3.135 1.502 1.359 1.000 1.395 0.392 10.613 1.273 1.000 6.903 2.243 0.648 1.359

2024 1.000 5.996 2.992 1.314 1.370 1.000 1.428 0.315 9.058 1.304 1.000 7.647 1.977 0.431 1.370

2025 1.000 6.594 2.789 1.120 1.379 1.000 1.461 0.250 7.241 1.344 1.000 8.430 1.701 0.282 1.379

2026 1.000 7.223 2.545 0.935 1.388 1.000 1.494 0.197 5.494 1.375 1.000 9.252 1.434 0.182 1.388

2027 1.000 7.882 2.276 0.766 1.394 1.000 1.527 0.155 4.005 1.415 1.000 10.113 1.187 0.116 1.394

2028 1.000 8.571 2.000 0.618 1.396 1.000 1.560 0.121 2.836 1.436 1.000 11.013 0.969 0.074 1.396

2029 1.000 9.292 1.730 0.493 1.403 1.000 1.593 0.094 1.967 1.462 1.000 11.952 0.781 0.047 1.403

2030 1.000 10.043 1.476 0.389 1.384 1.000 1.626 0.073 1.345 1.493 1.000 12.929 0.624 0.030 1.384

2031 1.000 10.824 1.246 0.305 1.392 1.000 1.659 0.057 0.911 1.525 1.000 13.946 0.494 0.019 1.392

2032 1.000 11.636 1.041 0.238 1.407 1.000 1.692 0.044 0.612 1.562 1.000 15.001 0.390 0.012 1.407

2033 1.000 12.478 0.862 0.184 1.423 1.000 1.725 0.034 0.410 1.591 1.000 16.095 0.305 0.008 1.423

2034 1.000 13.351 0.710 0.143 1.439 1.000 1.757 0.026 0.274 1.669 1.000 17.228 0.239 0.005 1.439

2035 1.000 14.255 0.581 0.110 1.456 1.000 1.790 0.020 0.182 1.743 1.000 18.400 0.186 0.003 1.456

### 6

- 21 Figure 6

- 28 . Oil Production Annual Growth Factors for Eagle Ford Shale

Play Region (2012

- 2035)

Figure 6

- 29 . Gas Production Annual Growth Factors for Eagle Ford Shale

Play Region (2012

- 2035) 0.000 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

0.000 2.000 4.000 6.000 8.000 10.000 12.000 14.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

### 6

- 22 Figure 6

- 30 . Condensate Production Annual Growth Factors for Eagle Ford

Shale Play Region (2012

- 2035)

Using the annual growth rates presented in Table 6

- 9 for each of the five projection

me thodologies, the projected annual production of oil, gas, and condensate as well as

total cumulative production for 2012 through 2035 can be estimated. From those

estimates, high growth rate, moderate growth rate, and low growth rate scenarios can be

iden tified (Table 6

- 10 ).

Table 6

- 10 . Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Eagle Ford Shale Play Region

Product Methodology b Projected Cumulative Production (2012

- 2035) Growth Scenario

Oil

(barrels) 2 (Curve Fit) 7,539,535,206 High

3 (Hubbert) 2,416,144,809

5 (EIA) 1,556,547,786 Moderate

1 (Constant) 1,170,737,856

4 (Barnett) 1,078,421,766 Low

Gas a

(MCF) 4 (Barnett) 108,284,178,086 High

2 (Curve Fit) 34,718,908,519

5 (EIA) 31,522,578,185 Moderate

1 (Constant) 24,594,066,120

3 (Hubbert) 12,401,616,838 Low

Condensate

(barrels) 2 (Curve Fit) 4,812,233,610 High

3 (Hubbert) 906,610,576

5 (EIA) 780,176,918 Moderate

1 (Constant) 586,800,264

4 (Barnett) 453,076,958 Low

a Includes both gas well gas and casinghead gas.

b Methodology 1

– 2011 annual production assumed constant through 2035

Methodology 2

– cumulative production model developed based on fitting historical cumulative production data to

a second or third order polynomial function

Methodology 3

– cumulative production model based on Hubbert’s logistic growth model

Methodology 4

– Historic ann ual production data from the Barnett shale play region used as a surrogate for the

Eagle Ford and Haynesville shale play regions.

Methodology 5

– EIA natural gas wellhead price projections through 2035 used as a surrogate for production. 0.000 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

### 6

- 23 6.3 Haynesville Shale Play Region

6.3.1 Methodology 2

Curve fitting under methodology 2 for the Haynesville shale play region resulted in the

models for cumulative production and annual production as shown in Table 6

- 11

.

Table 6

- 11 . Met hodology 2 Production Models for Haynesville Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, H

− 2 ( barrels )

= 10

, 364 ( t 3 )

− 62

, 498

, 790 ( t 2 )

+ 125

, 630

, 463

, 250 ( t )

− 84

, 181

, 182

, 315

, 346 P ( t ) Oil

, H

− 2 = dQ

dt Oil

, H

− 2 � barrels

yr �

= 31

, 093 ( t 2 )

− 124

, 997

, 581 ( t )

+ 125

, 630

, 463

, 250

Gas Q G

, H

− 2 ( MCF )

= 28

, 859

, 712 ( t 2 )

− 115

, 046

, 366

, 724 ( t )

+ 114

, 654

, 424

, 767

, 998 P ( t ) G

, H

− 2 = dQ

dt G

, H

− 2 � MCF

yr �

= 57

, 719

, 425 ( t )

− 115

, 046

, 366

, 724

Condensate Q C

, H

− 2 ( barrels )

= 146

, 730 ( t 2 )

+ 584

, 635

, 536 ( t )

− 582

, 351

, 298

, 854 P ( t ) C

, H

− 2 = dQ

dt C

, H

− 2 � barrels

yr �

= 293

, 460 ( t ) + 584

, 635

, 536



### Figures 6

- 31 and 6

- 32 present actual and modeled historic oil production, and projected

oil production, respectively. Figures 6

- 33 and 6

- 34 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

- 35

and 6

- 36 present actual and modeled historic condensate production, and projected

condensate production, respectively.

### 6

- 24 Figure 6

- 31 . Methodology 2 Model Fit to Historic Oil Production from the

Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 32 . Methodology 2 Projected Cumulative a nd Annual Oil

Production from the Haynesville Shale Play Region (2012

- 2035) 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 25 Figure 6

- 33 . Methodology 2 Model Fit to Historic Natural Gas Production

from the Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 34 . Methodology 2 Projected Cumulative and Annual Natural Gas

Production from the Haynesville Shale Play Region (2012

- 2035) 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000

0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000 8,000,000,000 9,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000

0 10,000,000,000 20,000,000,000 30,000,000,000 40,000,000,000 50,000,000,000 60,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 26 Figure 6

- 35

. Methodology 2 Model Fit to Historic Condensate Production

from the Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 36 . Methodology 2 Projected Cumulative and Annual Condensate

Production from the Hayne sville Shale Play Region (2012

- 2035) 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 27 6.3.2 Methodology 3

Model development under methodology 3 for the Haynesville shale play region resulted

in the models for cumulative production and annual production as shown in Table 6

- 1 2.

Table 6

- 12 . Methodology 3 Production Models for Haynesville Shale Play Region

Product Cumulative Production Annual Production

Oil Q Oil

, H

− 3 ( barrels )

= 108

, 453

, 587

1 + ( 9

. 148 ) e − 0

. 2936 ( t

− 2011 ) P ( t ) Oil

, H

− 3 � barrels

yr �

= dQ

dt

Oil

, H

− 3

= ( 0

. 2936 ) ( 108

, 453

, 587 ) ( 9

. 148 ) e − 0

. 2936 ( t

− 2011 )

( 1 + ( 9

. 148 ) e − 0

. 2936 ( t

− 2011 ) ) 2

Gas Q G

, H

− 3 ( MCF )

= 15

, 290

, 767

, 024

1 + ( 30

. 26 ) e − 0

. 3229 ( t

− 2011 ) P ( t ) G

, H

− 3 � MCF

yr �

= dQ

dt G

, H

− 3

= ( 0

. 3229 ) ( 15

, 290

, 767

, 024 ) ( 30

. 26 ) e − 0

. 3229 ( t

− 2011 )

( 1 + ( 30

. 26 ) e − 0

. 3229 ( t

− 2011 ) ) 2

Condensate Q C

, H

− 3 ( barrels )

= 78

, 711

, 336

1 + ( 28

. 46 ) e − 0

. 3256 ( t

− 2011 ) P ( t ) C

, H

− 3 � barrels

yr �

= dQ

dt C

, H

− 3

= ( 0

. 3256 ) ( 78

, 711

, 336 ) ( 28

. 46 ) e − 0

. 3256 ( t

− 2011 )

( 1 + ( 28

. 46 ) e − 0

. 3256 ( t

− 2011 ) ) 2



### The estimated model parameters are summarized in Table 6

- 13

.

Table 6

- 13 . Summary of Methodology 3 Production

Model Parameters

Product Q

∞ a No

Oil 108,453,587 0.2936 9.148

Gas 15,290,767,024 0.3229 30.26

Condensate 78,711,336 0.3256 28.46



### Figures 6

- 37 and 6

- 38 present actual and modeled historic oil production, and projected

oil production, respectively. Figures 6

- 39 and 6

- 40 present actual and modeled historic

natural gas production, and projected natural gas production, respectively. Figures 6

- 41

and 6

- 42 present actual and modeled historic condensate production, and projected

condensate production, respectively.

A summary of the annual growth factors calculated for the Haynesville S hale play region

under all five methodologies is presented in Table 6

- 14 . Annual growth factors for 2012

### 6

- 28 through 2035 calculated for all five methodologies are presented in Figures 6

- 43

through 6

- 45 for oil production, gas production, and condensate production,

respectively.

Figure 6

- 37 . Methodology 3 Model Fit to Historic Oil Production from the

Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 38 . Methodology 3 Projected Cumulative and Annual Oil

Production from the Haynesville Shale Play Region (2012

- 2035) 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 29 Figure 6

- 39 . Methodology 3 Model Fit t o Historic Natural Gas Production

from the Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 40 . Methodology 3 Projected Cumulative and Annual Natural Gas

Production from the Haynesville Shale Play Regio n (2012

- 2035) 0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000

0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 6,000,000,000 7,000,000,000 8,000,000,000 9,000,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000

0 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000 16,000,000,000 18,000,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (MCF/year)Cumulative Production (MCF)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 30 Figure 6

- 41 . Methodology 3 Model Fit to Historic Condensate Production

from the Haynesville Shale Play Region (2000

- 2011)

Figure 6

- 42

. Methodology 3 Projected Cumulative and Annual Condensate

Production from the Haynesville Shale Play Region (2012

- 2035) 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 50,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

2000 2005 2010 2015 2020 2025 2030 2035Annual Production (barrels/year)Cumulative Production (barrels)

Actual Cumulative Production Model Cumulative Production Model Annual Production

### 6

- 31 Table 6

- 14 . Summary of Production Growth Factors for Haynesville Shale Play Region for Methodologies 1

– 5

Year Oil Gas Condensate

Methodology Methodology Methodology

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.017 0.858 0.992 1.020 1.000 1.056 0.953 1.196 0.892 1.000 1.053 0.939 1.108 1.020

2013 1.000 1.046 0.715 0.947 1.105 1.000 1.112 0.864 1.513 0.979 1.000 1.106 0.839 1.224 1.105

2014 1.000 1.086 0.581 0.953 1.185 1.000 1.169 0.749 2.065 1.005 1.000 1.160 0.718 1.447 1.185

2015 1.000 1.138 0.464 0.997 1.248 1.000 1.225 0.625 3.050 1.034 1.000 1.213 0.591 1.678 1.248

2016 1.000 1.201 0.364 1.117 1.270 1.000 1.281 0.505 4.361 1.026 1.000 1.266 0.472 2.003 1.270

2017 1.000 1.277 0.282 1.084 1.293 1.000 1.337 0.397 4.762 1.034 1.000 1.319 0.368 1.864 1.293

2018 1.000 1.364 0.217 1.216 1.298 1.000 1.393 0.306 4.927 1.045 1.000 1.373 0.281 1.631 1.298

2019 1.000 1.462 0.165 1.359 1.307 1.000 1.449 0.232 5.212 1.073 1.000 1.426 0.212 1.658 1.307

2020 1.000 1.572 0.125 1.863 1.317 1.000 1.506 0.174 10.597 1.100 1.000 1.479 0.158 1.777 1.317

2021 1.000 1.694 0.095 1.794 1.331 1.000 1.562 0.129 11.516 1.157 1.000 1.532 0.117 1.335 1.331

2022 1.000 1.828 0.071 1.668 1.348 1.000 1.618 0.095 11.522 1.223 1.000 1.586 0.086 0.949 1.348

2023 1.000 1.973 0.054 1.502 1.359 1.000 1.674 0.070 10.613 1.273 1.000 1.639 0.063 0.648 1.359

2024 1.000 2.130 0.040 1.314 1.370 1.000 1.730 0.051 9.058 1.304 1.000 1.692 0.046 0.431 1.370

2025 1.000 2.298 0.030 1.120 1.379 1.000 1.787 0.037 7.241 1.344 1.000 1.745 0.033 0.282 1.379

2026 1.000 2.478 0.022 0.935 1.388 1.000 1.843 0.027 5.494 1.375 1.000 1.798 0.024 0.182 1.388

2027 1.000 2.670 0.017 0.766 1.394 1.000 1.899 0.020 4.005 1.415 1.000 1.852 0.017 0.116 1.394

2028 1.000 2.873 0.013 0.618 1.396 1.000 1.955 0.014 2.836 1.436 1.000 1.905 0.013 0.074 1.396

2029 1.000 3.088 0.009 0.493 1.403 1.000 2.011 0.010 1.967 1.462 1.000 1.958 0.009 0.047 1.403

2030 1.000 3.315 0.007 0.389 1.384 1.000 2.067 0.008 1.345 1.493 1.000 2.011 0.007 0.030 1.384

2031 1.000 3.554 0.005 0.305 1.392 1.000 2.124 0.005 0.911 1.525 1.000 2.065 0.005 0.019 1.392

2032 1.000 3.804 0.004 0.238 1.407 1.000 2.180 0.004 0.612 1.562 1.000 2.118 0.003 0.012 1.407

2033 1.000 4.065 0.003 0.184 1.423 1.000 2.236 0.003 0.410 1.591 1.000 2.171 0.002 0.008 1.423

2034 1.000 4.339 0.002 0.143 1.439 1.000 2.292 0.002 0.274 1.669 1.000 2.224 0.002 0.005 1.439

2035 1.000 4.624 0.002 0.110 1.456 1.000 2.348 0.001 0.182 1.743 1.000 2.277 0.001 0.003 1.456

### 6

- 32 Figure 6

- 43 . Oil Production Annual Growth Factors for Haynesville Shale

Play Region (2012

- 2035)

Figure 6

- 44 . Gas Production Annual Growth Factors for Haynesville Sha le

Play Region (2012

- 2035) 0.000 0.500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

0.000 2.000 4.000 6.000 8.000 10.000 12.000 14.000

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

### 6

- 33 Figure 6

- 45 . Condensate Production Annual Growth Factors for Haynesville

Shale Play Region (2012

- 2035)

Using the annual growth rates presented in Table 6

- 14 for each of the f ive projection

methodologies, the projected annual production of oil, gas, and condensate as well as

total cumulative production for 2012 through 2035 can be estimated. From those

estimates, high growth rate, moderate growth rate, and low growth rate scen arios can be

identified (Table 6

- 15 ).

Table 6

- 15 . Identification of High, Moderate, and Low Growth Scenarios Based on

Projected Cumulative Production for the Haynesville Shale Play Region

Product Methodology b Projected Cumulative Production (2012

- 2035) Growth Scenario

Oil

(barrels) 2 (Curve Fit) 279,391,766 High

5 (EIA) 159,496,904

1 (Constant) 119,963,592 Moderate

4 (Barnett) 110,504,113

3 (Hubbert) 20,716,805 Low

Gas a

(MCF) 4 (Barnett) 100,013,677,020 High

2 (Curve Fit) 38,667,754,634

5 (EIA) 29,114,954,827 Moderate

1 (Constant) 22,715,626,872

3 (Hubbert) 4,997,314,941 Low

Condensate

(barrels) 2 (Curve Fit) 140,872,870 High

5 (EIA) 112,467,350

1 (Constant) 84,590,904 Moderate

4 (Barnett) 65,313,859

3 (Hubbert) 17,638,460 Low

a Includes both gas well gas and casinghead gas.

b Methodology 1

– 2011 annual production assumed constant through 2035

Methodology 2

– cumulative production model developed based on fitting historical cumulative production data to a second or third order

polynomial function

Methodology 3

– cumulative production model based on Hubbert’s logistic growth model

Methodology 4

– Historic ann ual production data from the Barnett shale play region used as a surrogate for the Eagle Ford and Haynesville

shale play regions.

Methodology 5

– EIA natural gas wellhead price projections through 2035 used as a surrogate for production. 0.000 0.500 1.000 1.500 2.000 2.500

2012 2017 2022 2027 2032

Methodology 1 Methodology 2 Methodology 3

Methodology 4 Methodology 5

### 7

- 1 

## 7.0 Area Source Growth Factors and Associated Data for

TexAER Upload

As described in previous sections, five different methodologies were employed to

develop growth factors for oil production, natural gas production, a nd condensate

production for each of the three shale play regions in Texas (Barnett, Eagle Ford,

and Haynesville). The growth factor development and calculation spreadsheet is

included as Appendix A. The final growth factors for each shale play for each

methodology are shown in Tables 7

- 1 through 7

- 3 below.

The growth factors in Tables 7

- 1 through 7

- 3 were then applied to oil and gas

related Source Classification Codes (SCCs) based on using the projected growth in oil,

gas, or condensate producti on as a scaling variable. For example, projected growth in

oil production was used as the scaling variable for SCC 2310011020 “On

- Shore Oil

Production /Storage Tanks: Crude Oil”. Table 7

- 4 below identifies the scaling variable

(oil, gas, or condensate pr oduction) used to assign the growth factors to each SCC.

Six of the area source oil and gas SCCs are generic in the sense that they are not specific

to a product (oil, gas, or condensate). For example, SCC 2310000000 is for “Oil & Gas

Expl & Prod /All Pro cesses /Total: All Processes”. The scaling variable for those generic

SCCs is identified as “ Oil and Gas Production Forecasts” in Table 7

- 4

. For those six

SCC’s, the growth factor is based on a weighted average of the oil and gas well counts in

each coun ty as compared to the total well counts. Table 7

- 5 presents the oil and gas well

counts for each county and shows the percentage of each type of well in each county.

These percentages were then multiplied by the oil and gas production growth factors to

d erive a weighted growth factor for each of the six SCCs:

GF o+g 

### = [GF

o 

### × (% Oil Wells/100)] + [GF g 

### × (% Gas Wells/100)]

Where :

GF o+g 

### = oil and gas growth factor

GF

o 

### = oil growth factor

GF g 

### = gas growth factor

The growth factor development and calculation spreadsheet is included as

Attachment A. Individual growth factors at the county level for each of the five

methodologies are provided for each SCC for each forecast year in Attachment B.

Growth factor sets compatible with TexAER are included as Attachm ent C.

### 7

- 2 Table 7

- 1 . Summary of Production Growth Factors for Barnett Shale Play Region for Methodologies 1

– 5

Year Oil Gas Condensate

Methodology Methodology Methodology

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.000 0.998 NA 1.020 1.000 1.099 1.173 NA 0.892 1.000 1.063 0.808 NA 1.020

2013 1.000 1.000 0.961 NA 1.105 1.000 1.198 1.275 NA 0.979 1.000 1.125 0.607 NA 1.105

2014 1.000 1.000 0.894 NA 1.185 1.000 1.297 1.275 NA 1.005 1.000 1.188 0.431 NA 1.185

2015 1.000 1.000 0.805 NA 1.248 1.000 1.396 1.175 NA 1.034 1.000 1.250 0.295 NA 1.248

2016 1.000 1.000 0.704 NA 1.270 1.000 1.495 1.002 NA 1.026 1.000 1.313 0.196 NA 1.270

2017 1.000 1.000 0.600 NA 1.293 1.000 1.594 0.801 NA 1.034 1.000 1.375 0.128 NA 1.293

2018 1.000 1.000 0.501 NA 1.298 1.000 1.693 0.608 NA 1.045 1.000 1.438 0.083 NA 1.298

2019 1.000 1.000 0.410 NA 1.307 1.000 1.792 0.443 NA 1.073 1.000 1.500 0.053 NA 1.307

2020 1.000 1.000 0.331 NA 1.317 1.000 1.891 0.314 NA 1.100 1.000 1.563 0.034 NA 1.317

2021 1.000 1.000 0.264 NA 1.331 1.000 1.990 0.218 NA 1.157 1.000 1.625 0.021 NA 1.331

2022 1.000 1.000 0.209 NA 1.348 1.000 2.089 0.149 NA 1.223 1.000 1.688 0.014 NA 1.348

2023 1.000 1.000 0.164 NA 1.359 1.000 2.188 0.101 NA 1.273 1.000 1.751 0.009 NA 1.359

2024 1.000 1.000 0.127 NA 1.370 1.000 2.287 0.068 NA 1.304 1.000 1.813 0.005 NA 1.370

2025 1.000 1.000 0.099 NA 1.379 1.000 2.386 0.045 NA 1.344 1.000 1.876 0.003 NA 1.379

2026 1.000 1.000 0.076 NA 1.388 1.000 2.484 0.030 NA 1.375 1.000 1.938 0.002 NA 1.388

2027 1.000 1.000 0.059 NA 1.394 1.000 2.583 0.020 NA 1.415 1.000 2.001 0.001 NA 1.394

2028 1.000 1.000 0.045 NA 1.396 1.000 2.682 0.013 NA 1.436 1.000 2.063 0.001 NA 1.396

2029 1.000 1.000 0.035 NA 1.403 1.000 2.781 0.009 NA 1.462 1.000 2.126 0.001 NA 1.403

2030 1.000 1.000 0.027 NA 1.384 1.000 2.880 0.006 NA 1.493 1.000 2.188 0.000 NA 1.384

2031 1.000 1.000 0.020 NA 1.392 1.000 2.979 0.004 NA 1.525 1.000 2.251 0.000 NA 1.392

2032 1.000 1.000 0.016 NA 1.407 1.000 3.078 0.003 NA 1.562 1.000 2.314 0.000 NA 1.407

2033 1.000 1.000 0.012 NA 1.423 1.000 3.177 0.002 NA 1.591 1.000 2.376 0.000 NA 1.423

2034 1.000 1.000 0.009 NA 1.439 1.000 3.276 0.001 NA 1.669 1.000 2.439 0.000 NA 1.439

2035 1.000 1.000 0.007 NA 1.456 1.000 3.375 0.001 NA 1.743 1.000 2.501 0.000 NA 1.456

NA

– not applicable

### 7

- 3 Table 7

- 2 . Summary of Production Growth Factors for Eagle Ford Shale Play Region for Methodologies 1

– 5

Year Oil Gas Condensate

Methodology Methodology Methodology

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.201 1.199 0.992 1.020 1.000 1.033 1.094 1.196 0.892 1.000 1.278 1.223 1.108 1.020

2013 1.000 1.433 1.425 0.947 1.105 1.000 1.066 1.160 1.513 0.979 1.000 1.595 1.473 1.224 1.105

2014 1.000 1.695 1.674 0.953 1.185 1.000 1.099 1.189 2.065 1.005 1.000 1.951 1.743 1.447 1.185

2015 1.000 1.987 1.941 0.997 1.248 1.000 1.132 1.177 3.050 1.034 1.000 2.346 2.019 1.678 1.248

2016 1.000 2.311 2.217 1.117 1.270 1.000 1.165 1.127 4.361 1.026 1.000 2.780 2.281 2.003 1.270

2017 1.000 2.664 2.489 1.084 1.293 1.000 1.198 1.044 4.762 1.034 1.000 3.252 2.507 1.864 1.293

2018 1.000 3.049 2.740 1.216 1.298 1.000 1.231 0.939 4.927 1.045 1.000 3.763 2.672 1.631 1.298

2019 1.000 3.463 2.953 1.359 1.307 1.000 1.263 0.821 5.212 1.073 1.000 4.313 2.756 1.658 1.307

2020 1.000 3.909 3.110 1.863 1.317 1.000 1.296 0.702 10.597 1.100 1.000 4.903 2.749 1.777 1.317

2021 1.000 4.385 3.197 1.794 1.331 1.000 1.329 0.587 11.516 1.157 1.000 5.530 2.651 1.335 1.331

2022 1.000 4.891 3.205 1.668 1.348 1.000 1.362 0.483 11.522 1.223 1.000 6.197 2.476 0.949 1.348

2023 1.000 5.428 3.135 1.502 1.359 1.000 1.395 0.392 10.613 1.273 1.000 6.903 2.243 0.648 1.359

2024 1.000 5.996 2.992 1.314 1.370 1.000 1.428 0.315 9.058 1.304 1.000 7.647 1.977 0.431 1.370

2025 1.000 6.594 2.789 1.120 1.379 1.000 1.461 0.250 7.241 1.344 1.000 8.430 1.701 0.282 1.379

2026 1.000 7.223 2.545 0.935 1.388 1.000 1.494 0.197 5.494 1.375 1.000 9.252 1.434 0.182 1.388

2027 1.000 7.882 2.276 0.766 1.394 1.000 1.527 0.155 4.005 1.415 1.000 10.113 1.187 0.116 1.394

2028 1.000 8.571 2.000 0.618 1.396 1.000 1.560 0.121 2.836 1.436 1.000 11.013 0.969 0.074 1.396

2029 1.000 9.292 1.730 0.493 1.403 1.000 1.593 0.094 1.967 1.462 1.000 11.952 0.781 0.047 1.403

2030 1.000 10.043 1.476 0.389 1.384 1.000 1.626 0.073 1.345 1.493 1.000 12.929 0.624 0.030 1.384

2031 1.000 10.824 1.246 0.305 1.392 1.000 1.659 0.057 0.911 1.525 1.000 13.946 0.494 0.019 1.392

2032 1.000 11.636 1.041 0.238 1.407 1.000 1.692 0.044 0.612 1.562 1.000 15.001 0.390 0.012 1.407

2033 1.000 12.478 0.862 0.184 1.423 1.000 1.725 0.034 0.410 1.591 1.000 16.095 0.305 0.008 1.423

2034 1.000 13.351 0.710 0.143 1.439 1.000 1.757 0.026 0.274 1.669 1.000 17.228 0.239 0.005 1.439

2035 1.000 14.255 0.581 0.110 1.456 1.000 1.790 0.020 0.182 1.743 1.000 18.400 0.186 0.003 1.456

### 7

- 4 Table 7

- 3

. Summary of Production Growth Factors for Haynesville Shale Play Region for Methodologies 1

– 5

Year Oil Gas Condensate

Methodology Methodology Methodology

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

2012 1.000 1.017 0.858 0.992 1.020 1.000 1.056 0.953 1.196 0.892 1.000 1.053 0.939 1.108 1.020

2013 1.000 1.046 0.715 0.947 1.105 1.000 1.112 0.864 1.513 0.979 1.000 1.106 0.839 1.224 1.105

2014 1.000 1.086 0.581 0.953 1.185 1.000 1.169 0.749 2.065 1.005 1.000 1.160 0.718 1.447 1.185

2015 1.000 1.138 0.464 0.997 1.248 1.000 1.225 0.625 3.050 1.034 1.000 1.213 0.591 1.678 1.248

2016 1.000 1.201 0.364 1.117 1.270 1.000 1.281 0.505 4.361 1.026 1.000 1.266 0.472 2.003 1.270

2017 1.000 1.277 0.282 1.084 1.293 1.000 1.337 0.397 4.762 1.034 1.000 1.319 0.368 1.864 1.293

2018 1.000 1.364 0.217 1.216 1.298 1.000 1.393 0.306 4.927 1.045 1.000 1.373 0.281 1.631 1.298

2019 1.000 1.462 0.165 1.359 1.307 1.000 1.449 0.232 5.212 1.073 1.000 1.426 0.212 1.658 1.307

2020 1.000 1.572 0.125 1.863 1.317 1.000 1.506 0.174 10.597 1.100 1.000 1.479 0.158 1.777 1.317

2021 1.000 1.694 0.095 1.794 1.331 1.000 1.562 0.129 11.516 1.157 1.000 1.532 0.117 1.335 1.331

2022 1.000 1.828 0.071 1.668 1.348 1.000 1.618 0.095 11.522 1.223 1.000 1.586 0.086 0.949 1.348

2023 1.000 1.973 0.054 1.502 1.359 1.000 1.674 0.070 10.613 1.273 1.000 1.639 0.063 0.648 1.359

2024 1.000 2.130 0.040 1.314 1.370 1.000 1.730 0.051 9.058 1.304 1.000 1.692 0.046 0.431 1.370

2025 1.000 2.298 0.030 1.120 1.379 1.000 1.787 0.037 7.241 1.344 1.000 1.745 0.033 0.282 1.379

2026 1.000 2.478 0.022 0.935 1.388 1.000 1.843 0.027 5.494 1.375 1.000 1.798 0.024 0.182 1.388

2027 1.000 2.670 0.017 0.766 1.394 1.000 1.899 0.020 4.005 1.415 1.000 1.852 0.017 0.116 1.394

2028 1.000 2.873 0.013 0.618 1.396 1.000 1.955 0.014 2.836 1.436 1.000 1.905 0.013 0.074 1.396

2029 1.000 3.088 0.009 0.493 1.403 1.000 2.011 0.010 1.967 1.462 1.000 1.958 0.009 0.047 1.403

2030 1.000 3.315 0.007 0.389 1.384 1.000 2.067 0.008 1.345 1.493 1.000 2.011 0.007 0.030 1.384

2031 1.000 3.554 0.005 0.305 1.392 1.000 2.124 0.005 0.911 1.525 1.000 2.065 0.005 0.019 1.392

2032 1.000 3.804 0.004 0.238 1.407 1.000 2.180 0.004 0.612 1.562 1.000 2.118 0.003 0.012 1.407

2033 1.000 4.065 0.003 0.184 1.423 1.000 2.236 0.003 0.410 1.591 1.000 2.171 0.002 0.008 1.423

2034 1.000 4.339 0.002 0.143 1.439 1.000 2.292 0.002 0.274 1.669 1.000 2.224 0.002 0.005 1.439

2035 1.000 4.624 0.002 0.110 1.456 1.000 2.348 0.001 0.182 1.743 1.000 2.277 0.001 0.003 1.456

### 7

- 5 Table 7

- 4 . Growth Factor Scaling Variables by SCC

SCC SCC Description Scaling Variable

2310020800 Oil & Gas Expl & Prod /Natural Gas /Gas Well Truck Loading Condensate Production

2310021011 On

- Shore Gas Production / Condensate Tank Flaring Condensate Production

2310021030 On

- Shore Gas Production /Tank Truck/Railcar Loading: Condensate Condensate Production

2310030000 Oil & Gas Expl & Prod /Natural Gas Liquids /Total: All Processes Condensate Production

2310030210 Oil & Gas Expl & Prod /Natural Gas Liquids /Gas Well Tanks

- Flashing &

Standing/Working/Breathing, Uncontrolled Condensate Production

2310030220 Oil & Gas Expl & Prod /Natural Gas Liquids /Gas Well Tanks

- Flashing &

Sta nding/Working/Breathing, Controlled Condensate Production

2310031000 Oil & Gas Expl & Prod /Natural Gas Liquids : On

- shore /Total: All Processes Condensate Production

2310020000 Oil & Gas Expl & Prod /Natural Gas /Total: All Processes Gas Production

2310020600 Oil & Gas Expl & Prod /Natural Gas /Compressor Engines Gas Production

2310020700 Oil & Gas Expl & Prod /Natural Gas /Gas Well Fugitives Gas Production

2310021000 On

- Shore Gas Production /Total: All Processes Gas Production

2310021010 On

- Shore Gas Production /Storage Tanks: Condensate Gas Production

2310021100 On

- Shore Gas Production /Gas Well Heaters Gas Production

2310021101 On

- Shore Gas Production /Natural Gas Fired 2Cycle Lean Burn Compressor Engines <

50 HP Gas Production

2310021102 On

- Shore Gas Production /Natural Gas Fired 2Cycle Lean Burn Compressor Engines 50

To 499 HP Gas Production

2310021103 On

- Shore Gas Production /Natural Gas Fired 2Cycle Lean Burn Compressor Engines

500+ HP Gas Production

2310021109 On

- Shore Gas Production /Total: All Natural Gas Fired 2Cycle Lean Burn Compressor

Engines Gas Production

2310021201 On

- Shore Gas Production /Natural Gas Fired 4Cycle Lean Burn Compressor Engines

<50 HP Gas Production

2310021202 On

- Shore Gas Production /Natural Gas Fired 4Cycle Lean Burn Compressor Engines 50

To 499 HP Gas Production

2310021203 On

- Shore Gas Production /Natural Gas Fired 4Cycle Lean Burn Compressor Engines

500+ HP Gas Production

2310021209 On

- Shore Gas Production /Total: All Natural Gas Fired 4Cycle Lean Burn Compressor

Engines Gas Production

2310021300 On

- Shore Gas Production /Gas Well Pneumatic Devices Gas Production

2310021301 On

- Shore Gas Production /Natural Gas Fired 4Cycle Rich Burn Compressor Engines

<50 HP Gas Production

### 7

- 6 Table 7

- 4 . Growth Factor Scaling Variables by SCC

SCC SCC Description Scaling Variable

2310021302 On

- Shore Gas Produ ction /Natural Gas Fired 4Cycle Rich Burn Compressor Engines 50

To 499 HP Gas Production

2310021303 On

- Shore Gas Production /Natural Gas Fired 4Cycle Rich Burn Compressor Engines

500+ HP Gas Production

2310021309 On

- Shore Gas Production /Total: All Natural Gas Fired 4Cycle Rich Burn Compressor

Engines Gas Production

2310021310 On

- Shore Gas Production / Gas Well Pneumatic Pumps Gas Production

2310021400 On

- Shore Gas Production /Gas Well Dehydrators Gas Production

2310021401 On

- Shore Gas Production /Nat Gas Fired 4Cycle Rich Burn Compressor Engines <50 HP

w/NSCR Gas Production

2310021402 On

- Shore Gas Production /Nat Gas Fired 4Cycle Rich Burn Compressor Engines 50 To

499 HP w/NSCR Gas Production

2310021403 On

- Shore Gas Production /Nat Gas Fired 4Cy cle Rich Burn Compressor Engines 500+

HP w/NSCR Gas Production

2310021409 On

- Shore Gas Production /Total: All Nat Gas Fired 4Cycle Rich Burn Compressor

Engines w/NSCR Gas Production

2310021410 On

- Shore Gas Production /Amine Unit Gas Production

2310021411 On

- Shore Gas Production / Gas Well Dehydrators

- Flaring Gas Production

2310021450 On

- Shore Gas Production /Wellhead Gas Production

2310021501 On

- Shore Gas Production /Fugitives: Connectors Gas Production

2310021502 On

- Shore Gas Production /Fugitives: Flanges Gas Production

2310021503 On

- Shore Gas Production /Fugitives: Open Ended Lines Gas Production

2310021504 On

- Shore Gas Production /Fugitives: Pumps Gas Production

2310021505 On

- Shore Gas Production /Fugitives: Valves Gas Production

2310021506 On

- Shore Gas Production /Fugitives: Other Gas Production

2310021509 On

- Shore Gas Production /Fugitives: All Processes Gas Production

2310021600 On

- Shore Gas Production /Gas Well Venting Gas Production

2310021602 On

- Shore Gas Production / Gas Well Venting

- Recompletions Gas Production

2310021603 On

- Shore Gas Production / Gas Well Venting

- Blowdowns Gas Production

2310021604 On

- Shore Gas Production / Gas Well Venting

- Compressor Startups Gas Production

2310021605 On

- Shore Gas Production / Gas Well Venting

- Compressor Shutdowns Gas Production

2310021700 On

- Shore Gas Production / Miscellaneous Engines Gas Production

2310030230 Natural Gas Liquids / Gas Well Tanks

- Flaring Gas Production

### 7

- 7 Table 7

- 4 . Growth Factor Scaling Variables by SCC

SCC SCC Description Scaling Variable

2310030300 Natural Gas Liquids / Gas Well Water Tank Losses Gas Production

2310030400 Natural Gas Liquids / Truck Loading Gas Production

2310030401 Natural Gas Liquids / Gas Plant Truck Loading Gas Production

2310121000 On

- Shore Gas Exploration /All Processes Gas Production

2310121401 On

- Shore Gas Exploration /Gas Well Pneumatic Pumps Gas Production

2310021500 On

- Shore Gas Production /Gas Well Completion

- Flaring Gas Production

2310021601 On

- Shore Gas Production / Gas Well Venting

- Initial Completions Gas Production

2310121100 On

- S hore Gas Exploration /Mud Degassing Gas Production

2310121700 On

- Shore Gas Exploration /Gas Well Completion: All Processes Gas Production

2310121701 On

- Shore Gas Exploration /Gas Well Completion: Flaring Gas Production

2310121702 On

- Shore Gas Exploration /Gas Well Completion: Venting Gas Production

2310000220 Oil & Gas Expl & Prod /All Processes /Drill Rigs Oil and Gas Production

Forecasts

2310000230 Oil & Gas Expl & Prod /All Processes /Workover Rigs Oil and Gas Production

Forecasts

2310000000 Oil & Gas Expl & Prod /All Processes /Total: All Processes Oil and Gas Production

Forecasts

2310000440 Oil & Gas Expl & Prod /All Processes /Saltwater Disposal Engines Oil and Gas Production

Forecasts

2310000550 Oil & Gas Expl & Prod /All Processes /Produced Water Oil and Gas Production

Forecasts

2310001000 Oil & Gas Expl & Prod /All Processes : On

- shore /Total: All Processes Oil and Gas Production

Forecasts

2310000330 Oil & Gas Expl & Prod /All Processes /Artificial Lift Oil Production

2310010000 Oil & Gas Expl & Prod /Crude Petroleum /Total: All Processes Oil Production

2310010100 Oil & Gas Expl & Prod /Crude Petroleum /Oil Well Heaters Oil Production

2310010200 Oil & Gas Expl & Prod /Crude Petroleum /Oil Well Tanks

- Flashing &

Stand ing/Working/Breathing Oil Production

2310010300 Oil & Gas Expl & Prod /Crude Petroleum /Oil Well Pneumatic Devices Oil Production

2310010700 Oil & Gas Expl & Prod /Crude Petroleum /Oil Well Fugitives Oil Production

2310010800 Oil & Gas Expl & Prod /Crude Petroleum /Oil Well Truck Loading Oil Production

2310011000 On

- Shore Oil Production /Total: All Processes Oil Production

2310011020 On

- Shore Oil Production /Storage Tanks: Crude Oil Oil Production

### 7

- 8 Table 7

- 4 . Growth Factor Scaling Variables by SCC

SCC SCC Description Scaling Variable

2310011100 On

- Shore Oil Production /Heater Treater Oil Production

2310011201 On

- Shore Oil Production /Tank Truck/Railcar Loading: Crude Oil Oil Production

2310011450 On

- Shore Oil Production /Wellhead Oil Production

2310011500 On

- Shore Oil Production /Fugitives: All Processes Oil Production

2310 011501 On

- Shore Oil Production /Fugitives: Connectors Oil Production

2310011502 On

- Shore Oil Production /Fugitives: Flanges Oil Production

2310011503 On

- Shore Oil Production /Fugitives: Open Ended Lines Oil Production

2310011504 On

- Shore Oil Production /Fugitives: Pumps Oil Production

2310011505 On

- Shore Oil Production /Fugitives: Valves Oil Production

2310011506 On

- Shore Oil Production /Fugitives: Other Oil Production

2310011600 On

- Shore Oil Production /Artificial Lift Engines Oil Production

2310111000 On

- Shore Oil Exploration /All Processes Oil Production

2310111401 On

- Shore Oil Exploration /Oil Well Pneumatic Pumps Oil Production

2310111100 On

- Shore Oil Exploration /Mud Degassing Oil Production

2310111700 On

- Shore Oil Exploration /Oil Well Completion: All Processes Oil Production

2310111701 On

- Shore Oil Exploration /Oil Well Completion: Flaring Oil Production

2310111702 On

- Shore Oil Exploration /Oil Well Completion: Venting Oil Production

### 7

- 9 Table 7

- 5 . Growth Factor Weighting Percentages

County Shale Play Oil Well Count Gas Well Count Total Well

Count % Oil % Gas

ATASCOSA Eagle Ford 1,131 82 1,213 93% 7%

BEE Eagle Ford 197 427 624 32% 68%

BRAZOS Eagle Ford 480 104 584 82% 18%

BURLESON Eagle Ford 1,000 115 1,115 90% 10%

DE WITT Eagle Ford 45 301 346 13% 87%

DIMMIT Eagle Ford 647 237 884 73% 27%

FAYETTE Eagle Ford 553 236 789 70% 30%

FRIO Eagle Ford 581 87 668 87% 13%

GONZALES Eagle Ford 254 12 266 95% 5%

GRIMES Eagle Ford 31 210 241 13% 87%

KARNES Eagle Ford 230 161 391 59% 41%

LA SALLE Eagle Ford 222 589 811 27% 73%

LAVACA Eagle Ford 41 507 548 7% 93%

LEE Eagle Ford 792 76 868 91% 9%

LIVE OAK Eagle Ford 193 356 549 35% 65%

LEON Eagle Ford 233 538 771 30% 70%

MAVERICK Eagle Ford 698 127 825 85% 15%

MCMULLEN Eagle Ford 684 666 1,350 51% 49%

MILAM Eagle Ford 1,014 10 1,024 99% 1%

ROBERTSON Eagle Ford 171 941 1,112 15% 85%

WEBB Eagle Ford 111 5,025 5,136 2% 98%

WILSON Eagle Ford 570 2 572 100% 0%

ZAVALA Eagle Ford 173 80 253 68% 32%

ANGELINA Haynesville 3 106 109 3% 97%

GREGG Haynesville 3,117 986 4,103 76% 24%

HARRISON Haynesville 308 2,600 2,908 11% 89%

MARION Haynesville 215 112 327 66% 34%

NACOGDOCHES Haynesville 102 1,446 1,548 7% 93%

PANOLA Haynesville 226 5,237 5,463 4% 96%

RUSK Haynesville 1,911 2,660 4,571 42% 58%

SABINE Haynesville 9 4 13 69% 31%

SAN AUGUSTINE Haynesville 18 140 158 11% 89%

### 7

- 10 Table 7

- 5 . Growth Factor Weighting Percentages

County Shale Play Oil Well Count Gas Well Count Total Well

Count % Oil % Gas

SHELBY Haynesville 54 658 712 8% 92%

ARCHER Barnett 3,068 5 3,073 100% 0%

BOSQUE Barnett 4 4 0% 100%

CLAY Barnett 1,107 28 1,135 98% 2%

COMANCHE Barnett 71 184 255 28% 72%

COOKE Barnett 2,212 43 2,255 98% 2%

CORYELL Barnett 5 12 17 29% 71%

DALLAS Barnett 25 25 0% 100%

DENTON Barnett 49 2,857 2,906 2% 98%

EASTLAND Barnett 626 848 1,474 42% 58%

ELLIS Barnett 50 50 0% 100%

ERATH Barnett 11 345 356 3% 97%

HAMILTON Barnett 2 12 14 14% 86%

HILL Barnett 2 238 240 1% 99%

HOOD Barnett 2 795 797 0% 100%

JACK Barnett 1,485 1,266 2,751 54% 46%

JOHNSON Barnett 2,955 2,955 0% 100%

MONTAGUE Barnett 2,458 46 2,504 98% 2%

PALO PINTO Barnett 417 1,453 1,870 22% 78%

PARKER Barnett 11 1,764 1,775 1% 99%

SHACKELFORD Barnett 1,794 236 2,030 88% 12%

SOMERVELL Barnett 99 99 0% 100%

STEPHENS Barnett 1,348 1,039 2,387 56% 44%

TARRANT Barnett 3,078 3,078 0% 100%

WISE Barnett 532 4,290 4,822 11% 89%

### 8

- 1 

## 8.0 Summary and Conclusions

Growth factors were calculated for the Barnett, Eagle Ford, and Haynesville shale play

regions in Texas for annual oil production, annual natural gas production, and annual

condensate production using five different methodologies. The growth factors are the

change in annual production in years 2012 through 2035 relative to the annual

production in the base year of 2011. Once the growth factors were calculated, the factors

were applied to the 2011 annual production for each product in each shale play region to

estimate annual production in each year 2012 through 2035. The estimated annual

production values were then summe d across the years 2012 through 2035 resulting in

an estimated cumulative production for the same time period. Three growth scenarios

(high growth, moderate growth, and low growth) were then identified from the

estimated cumulative production values.

The annual production growth factors will also be used as the annual drilling growth

factors. It is assumed that the relative change in the number of producing oil or gas

wells in any future year relative to a base year will correspond to the relative change in

oil or gas production. Furthermore, the growth factors calculated for each product in

each shale play region will be applied to each county in that region.

For the purposes of projecting emissions from oil and gas production activities in each

of the t hree shale play regions, the high growth rate scenario would result in “worst

case” total emissions estimates as this scenario produces the greatest total cumulative

production through 2035. Since it is assumed there is a one

- to

- one (1:1) relationship

bet ween the relative change in production and the resultant emissions from production

activities, then the highest cumulative production from 2012 through 2035 under the

high growth rate scenario would correspond to the highest amount of cumulative

emissions over the same time period.

While several methods of forecasting have been employed, there is a high degree of

uncertainty and variability in production forecasting as future economic and geopolitical

influences are impossible to predict. However, it is us eful to contemplate which

calculation methodology might result in a more “reasonable” production profile through

2035. While methodologies 1 and 2 are useful for comparison purposes and in the

identification of growth scenarios, they are simplistic and ba sed only on historic

production data. Methodology 5 is based on natural gas price projections from EIA

which result from complex modeling, but may be optimistic. Further, we assume that

changes in production will follow changes in price immediately with no time delay,

which historically has rarely been the case. Methodology 4 is instructive as it is based

on a large body of historical data, but also reflects historical changes in the economy, oil

and gas prices, and other factors that tend to affect tren ds in production. We are

cautious about applying methodology 4 for the purposes of projecting future production

### 8

- 2 as those historical impacts on production will effectively be “duplicated” in the future. A

production projection simply based on historical data and total resource estimates is

preferred as it does not involve trying to predict future economic or political events that

may affect production.

It is our conclusion that Methodology 3 (Hubbert’s model) is the preferred forecasting

methodology under this effort. The model is developed for each shale play region based

on historical data for the region, but also takes into account changes in production rates

due to the size of reserves and estimated ultimate recovery. While there is a great

amount of uncertainty in reserve estimation and even published Technically

Recoverable Resources ( TRR ) values (and those values continue to change over time

due to advances in technology and estimation methods), the Hubbert model accounts

for estimated maximum cumu lative production. The gradual leveling of total

cumulative production as resources near depletion is reflected in the production rate

curve when the cumulative production curve is differentiated. The result is a clear peak

in the annual production curve indicating when maximum annual production is

estimated to occur. For emissions modeling and estimation purposes, this peak would

also correspond to the period of peak emissions resulting from production activities.

Except under methodology 4, the other projection methodologies do not produce a

distinct production peak which results in production either increasing (at a constant or

variable rate) or remaining constant indefinitely, which are likely very unrealistic or

improbable scenarios.

## Attachment A

“ Production Modeling and Growth Factor Calculation

. zip ”

## A ttachment B

“ Area Source Growth Factors

. zip ”

## Attachment C

“TexAER Area Source Growth Factors

. zip ”