# 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 Sectio n 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 proje ctions, anticipated results, or other expectations expressed in this presentation, including Anadarko’s ability to meet financial and operating guidance, ach iev e its production targets, successfully manage its capital expenditures, consummate the transaction described in this presentation, timely complete and com mercially operate the projects and drilling prospects identified in this presentation, achieve production and budget expectations on its mega proje cts, and successfully plan, secure necessary government approvals, finance, build, and operate the necessary infrastructure and LNG park. See “Risk Facto rs” 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 no n - 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 pr esentation, 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 & PassionAPPALACHIAN BASIN NY SE : A P C | ww w . anada r ko . co m 

## 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

APPALACHIAN BASIN NY SE : A P C | ww w . anada r ko . co m

# 2015 PA Quick Facts * • 31MM bbl P roduced W ater

– 90.6% (~ 28 MM bbls ) • R ecycled in New C ompletions



## – 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

APPALACHIAN BASIN 

# 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 2015APPALACHIAN BASIN * Frac Focus versions 1 & 2; Data queried on 1/25/2016 

# Frac Focus Data

# Pennsylvania Water Map Supply & Demand at Stake

APPALACHIAN BASIN NY SE : A P C | ww w . anada r ko . co mAPPALACHIAN BASINAPPALACHIAN BASINAPPALACHIAN BASINAPPALACHIAN BASIN

# APC Produced Water Overview & 2016 Plan

APPALACHIAN BASIN NY SE : A P C | ww w . anada r ko . co mAPPALACHIAN BASIN 

# Produced Water Mgmt Lookback & ForecastAPPALACHIAN BASINAPPALACHIAN BASINAPPALACHIAN BASIN 

# 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

APPALACHIAN BASIN NY SE : A P C | ww w . anada r ko . co mAPPALACHIAN BASIN 

## • 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 W ear

– Policy, Reporting & Governance

– Water Introduced to Life C ycle

– Operating Expense R eduction; Local/state R evenue I ncrease 

## • Challenges:

– Waste disposal: • Elevated M etals ; TCLP & Treatability

– HAPs & VOCs: • Dry Gas vs Wet G as • Methanol Pretreatment

– Advanced Oxidation

– Distillation

– Sparge 

# Industry Considerations for DiscussionAPPALACHIAN BASIN