Pennsylvania –

Long Term Water Management

the need for long term water outlets
Cautionary Language

Regarding Forward-Looking Statements and Other Matters

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities 

Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such 

expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or 

other expectations expressed in this presentation, including Anadarko’s ability to meet financial and operating guidance, achieve its production targets, 

successfully manage its capital expenditures, consummate the transaction described in this presentation, timely complete and commercially operate the 

projects and drilling prospects identified in this presentation, achieve production and budget expectations on its mega projects, and successfully plan, 

secure necessary government approvals, finance, build, and operate the necessary infrastructure and LNG park. See “Risk Factors” in the company’s 

2014 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to 

publicly update or revise any forward-looking statements.

Please also see our website at www.anadarko.com under “Investor Relations” for reconciliations of the differences between any non-GAAP measure used 

in this presentation, the appendix slides or the most directly comparable GAAP financial measures. Also on our website at www.anadarko.com is a 

glossary of terms.

Cautionary Note to Investors - The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to 

disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms. We may use terms in this presentation, such as 

“resources,” “net resources,” “net discovered resources,” “gross resource,” “recoverable resources,” “net risked resource,” “relative resource 

size,” “net resource potential,” and similar terms that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. 

Investors are urged to consider closely the oil and gas disclosures in our Form 10-K for the year ended December 31, 2014, 

File No. 001-08968, available from us at www.anadarko.com or by writing us at: Anadarko Petroleum Corporation, 1201 Lake 

Robbins Drive, The Woodlands, Texas 77380 Attn: Investor Relations. You can also obtain this form from the SEC by calling 

1-800-SEC-0330.
We will: 

• Communicate freely, clearly and concisely 

• Listen for understanding 

• Encourage diverse opinions and 

constructive debate 

We will not:

• Knowingly mislead or intentionally 

withhold information

We will:

• Understand and execute our strategy 

• Safeguard the long-term interests of shareholders 

• Maintain high standards for health, safety and the 

environment 

• Act responsibly with company assets 

We will not:

• Sacrifice long-term value for short-term gain 

• Use the excuse, "we've always done it that way"

We will:

• Act with the highest ethical standards 

• Honor our promises and obligations to work, 

family, faith and community 

• Admit mistakes and accept accountability

We will not:

• Tolerate dishonesty and intimidation 

• Punish intelligent business risk taking

We will:

• Serve others 

• Place the success of others above our own 

• Exhibit personal humility and professional 

courage

We will not:

• Rely on power and authority 

• Take individual credit for team success 

• Blame individuals for bad team decisions

We will:

• Recognize and reward strong performance 

• Respect diversity in thought, practice and culture 

• Create a high-energy work environment 

• Learn and continuously develop ourselves and others 

• Think big -- Innovate 

We will not:

• Accept apathy or cynicism 

• Allow enthusiasm to overwhelm reason

Open 

Communication

Anadarko’s 

Core Values

Integrity 

& Trust

Servant 

Leadership

Commercial 

Focus

People 

& Passion
APPALACHIAN BASIN

NYSE: APC | www.anadarko.com

Topic Presenter Role

• PA Produced Water Overview

• PA Water Map

• APC Produced Water

Olivia Desser Anadarko PA - Production Engineer

• Regulations Overview 

• UIC Permitting 

• Thermal Treatment – Pad 

Adam Locke

Tetra Tech – Director of Business 

Development

• Treatment Overview & Options

• Cost Overview Chip Cagle

Veolia North America – Director of 

Project Development

• PA Path Forward & Discussion Panel & Audience Panel & Audience

Agenda
PA Produced Water Overview

DEP Waste Report & Frac Focus Data

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NYSE: APC | www.anadarko.com
2015 PA Quick Facts*

• 31MM bbl Produced Water 

– 90.6% (~28 MM bbls)

• Recycled in New Completions

– 8.12%

• SWD (93% Ohio, 5.9% PA, 1.4% WV)

– 1.26% to NPDES Facility

• 500 Wells needed in 2016 to 

sustain this produced water 

model

– 60,000 bbl Produced Water per 

Well

– Operator Transfer Agreements

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Produced Water Facts

* PA DEP waste data report 

Constituent Field Average

pH 5.83

TDS 230,831 ppm

Cl- 140,564 ppm

Na+ 48,177 ppm

Ca++ 24,059 ppm

Ba++ 7,899 ppm

Sr++ 6,116 ppm

K 423 ppm

Fe 170 ppm

Mn++ 38 ppm

Water Chemistry**

** Average data set from 2,025 Anadarko water samples taken 

between Q1 2014 and Q4 2015
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* Frac Focus versions 1 & 2; Data queried on 1/25/2016

Frac Focus Data
Pennsylvania Water Map

Supply & Demand at Stake

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APC Produced Water

Overview & 2016 Plan

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Produced Water Mgmt Lookback & Forecast
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Transportation Efficiencies

Scheduling interface w/predictive 

analysis (Gray Matter)

Dispatch & form engine application 

(Gray Matter)

Reporting optimization w/handoff to 

vendors

Emergency rail option (Ohio SWD)

Long Term Evaluation

Thermal technology: Onsite vs 

centralized

UIC potential

Waste generation: Solids vs Slurry

Transportation: Rail vs Trucking

Capital expense vs Operating 

expense

Anadarko Petroleum: Water Mgmt

2016 Focus & Path Forward:
Sustainable Solutions for 

Flowback/Produced Water 

Challenges 

Chip Cagle, Veolia North America

P: 864-350-2983
Level 1 – Minimal Treatment - Reuse

Total Suspended Solids Removal – TSS – Physical Chemical Treatment and or Filtration

Level 2 – Specific Ion Removal + TSS Removal - Reuse

Target removal of ions like Iron, Calcium, Barium, Strontium, Metals – Physical Chemical Treatment

Level 3 – Meet Discharge limits for Disposal or Reuse

Must remove Total Dissolved Solids and ammonia(all ions)

Discharge typically less than 500 ppm TDS

Typically Accomplished through (depends on influent TDS)

Pretreatment + Membrane

Pretreatment + Membrane + Evaporation

Pretreatment + Membrane + Evaporation/Crystallization 

Pretreatment + Crystallization

Treatment Levels

19
Capital and Operating cost increase as influent brine concentration increases

Larger the size the lower the cost/bbl to treat

5000 bpd

12,000 bpd

30,000 bpd

Due to economies of scale (Capital and O&M)

Technology dependent upon effluent disposal requirements and options, reuse 

and influent brine concentration

Pretreatment requirements may vary with each option

Minimize TENORM effect

‘Clean’ effluent from each can meet discharge or reuse requirements

Treatment Plant Options

20

‘Clean’ Effluent

Conc. Brine Effluent Influent

Water Plant

Solids
Process Flow Diagram

21

Achieve Selective Ion removal in the pretreatment process

Minimize TENORM effect and sludge cost
Sample Cost Comparison – Worst Case

22

*Note could reduce with on-site landfill by $1.50/bbl or better

On-site landfill could add $10-15M in capital

Case 1 - Client Case 2 - Merchant

BPD 5000 12000

Capex $ 50,000,000 $ 100,000,000

Yearly capex recovery $ 10,000,000 $ 20,000,000 20% pretax IRR

Yearly cost/bbl $ 5.48 $ 4.57

O&M $ 2,500,000 $ 3,000,000

O&M cost per bbl $ 1.40 $ 0.70

Chemicals $ 0.40 $ 0.40

Salt* $ 2.50 $ 2.50 $60/ton T&D

Power $ 0.25 $ 0.25 $.06/kWhr

Gas $ 0.50 $ 0.50 $2.6/MMBRU

contingency $ 0.47 $ 0.41

Total opex $/bbl $ 5.52 $ 4.76

inc capital recovery $/bbl $ 11.00 $ 9.33
Single Owner to Merchant to Consortium to blends of each

Size does matter, the larger the facility the lower the lifecycle cost (estimated cost over 10 yrs

including capital recovery, disposal and all O&M cost)

5000 bpd – $11/bbl

12,000 bpd - $9/bbl

30,000 bpd - $6/bbl

Merchant facilities - sell excess capacity to offset investment

Location

Minimize trucking cost

near a large user of high purity water (power producer) – value of high purity water can be 

greater than $1/bbl

Reuse/Resale - By-products, salts, other liquid products – equate to several $/bbl

On-site landfill

Solids disposal is the single largest operating cost est $2.50/bbl or more

On-site landfill can reduce solids disposal cost by 50 to 70% 

Overall could reduce the worst case cost by half

Methods for Life Cycle ‘Cost’ Minimization

23

+ 30% estimate based on typical Marcellus water
PA Path Forward & Discussion

Industry Considerations

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NYSE: APC | www.anadarko.com
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• Overall Model:

– UIC vs. Thermal – Solids vs. Slurry – Pad vs. Centralized – Combination

• Technology:

– SWD – Evaporation – Crystallization – Submerged Combustion – Membrane – Other

• Evolving Regulations:

– OG 71 (CoP) – Permit by Rule (CoP) – WMGR123 (CoP) – UIC Class IID (USEPA Region III & CoP) – Form U (CoP) – RFD/Air Quality Permit (CoP)

• Social License to Operate:

– Public Perception

– Reduced Emissions, Trucking & Road Wear

– Policy, Reporting & Governance

– Water Introduced to Life Cycle

– Operating Expense Reduction; Local/state 

Revenue Increase

• Challenges:

– Waste disposal:

• Elevated Metals; TCLP & Treatability

– HAPs & VOCs:

• Dry Gas vs Wet Gas

• Methanol Pretreatment

– Advanced Oxidation

– Distillation

– Sparge

Industry Considerations for Discussion
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