# Examining How WPX Energy Has Successfully Located Water Sources and Cost Effectively Attained Freshwater for Fracing March 28 th 

## , 2012 

## Heath Auman Water Specialist WPX Energy

1" Canonsburg Shale Gas Conference l March 28 th , 2012

# Overview  Water Sourcing  Well Pad Proximity to Water Sources  Headwaters vs. Large Rivers and Streams  Lakes and Ponds  Water Source Selection Criteria 

##  Overcoming Topographic, Geographic and Regulatory Challenges  Eastern PA vs. Western PA Terrain 

###  Well Pad Density  Permitting Time, Policies and Regulations 

##  Increasing Time Efficiency and Reducing Costs  Reduce Trucking Times  Increase Truck Load Efficiency  Trucking vs. Pipeline  WPX Energy Pipeline Examples 

##  Alternative Water Sources  Sewage Treatment Plants 

###  Industrial Discharges  Mine Pools 2" Canonsburg Shale Gas Conference l March 28 th , 2012

# Water Sourcing

 Well Pad Proximity to Water Sources  Well Pads are Typically Located on Upland Areas  Smaller Streams 

###  Larger Streams are Located in Valleys  Long Trucking Times and Pipelines 

##  Headwaters and Large Rivers and Streams  Headwaters  Low Available Withdrawal Volume  Environmentally Sensitive  Usually Close to Well Pads  Difficult Permitting Process 

###  Major Rivers Provide Ample Withdrawal Volume 

##  Lakes and Large Ponds  Ideal Source of Water if Regulated Discharge  Permitting Process

3" Canonsburg Shale Gas Conference l March 28 th , 2012

# Water Sourcing (Continued)

 Water Source Selection Criteria ± Proximity to Well Pads  Determine Your Needs  Well, Well Pad and Unit Count  One Unit Requires 38 MM gallons  (TXLYDOHQWWR ́RI5DLQIDOO2YHU8QLW  Completions Schedule  Select a Withdrawal Amount That Is Not Excessive 

###  Preliminary Desktop Feasibility Study  Identify Conflicts and Permitting Requirements Upfront 

###  Preliminary Landowner Approval  Reduce/Eliminate Surprises 

###  Field Investigation  Submit Permits  Final Landowner Approval 

###  Wait  Hope Pad/ROW Alignments Have not Shifted  Procure Materials  Keep Landowners Informed 

###  Construct  Operational 

###  Each Source is Unique 4" Canonsburg Shale Gas Conference l March 28 th , 2012

# Water Sourcing (Continued)

 Determining a Suitable Withdrawal Amount  Each Source is Unique  10% Q7-10 vs. Passby  Q7 -10 is no Longer Available  Passby  No Maximum Limit  Review Gage Data and Rating Curve  Install Gage  New Policy?  The Nature Conservancy  Unpredictable Passby Conditions 

##  Schedule Fracs Around Passby Conditions When Possible  Must Have an Uninterruptible Source  June Through September are Typically Dry  Impoundments Help  Additional Impacts and Cost

5" Canonsburg Shale Gas Conference l March 28 th , 2012

# Overcoming Geographic, Topographic and Regulatory Challenges  Eastern PA vs. Western PA Terrain  Steep Slopes vs. Plateau  Distance to Well Pads  Distance Between Well Pads 

###  Difficult Accessibility  Floodplain and Floodway  Power  May Have to Pipe to Another Property to Truck  Railroad Tracks 

##  Well Pad Density  Increases Efficiency  Fewer Water Sources Required  Shorter Trucking Routes  Increased Probability of Competent Roads

6" Canonsburg Shale Gas Conference l March 28 th , 2012

# Overcoming Geographic, Topographic and Regulatory Challenges (Continued)  Permitting, Policies and Regulations  Long Wait Times  Well Pads and ROW Can Shift  Joint Permit 

###  Changing Policies  Moving Target  Stay on Your Toes 

###  Strict Regulations  SRBC 10 Meter Buffer  Results in Greater Impacts when ROW Alignments Shift  Water Management Plan and SRBC Approval Overlap  Wait Time Results in Missing Fracs  Name Changes  Wait Time of Greater Than 3 Months

7" Canonsburg Shale Gas Conference l March 28 th , 2012

# Increasing Time Efficiency and Reducing Costs

 Reduce Trucking Times  Withdrawal Proximity to Well Pads  Reduce Travel Times and Distance  Reduce Road Repair and Replacement 

###  Efficient Loading Area  Reduce Loading and Waiting Times  Dispatch Trucks Accordingly  Numerous Load Outs  Pumping Rate  Grading  Increase Truck Load Efficiency  HydroWatch 

###  Well Pad Layout  Water Trucks Cannot Unload Efficiently 

###  Idling Trucks Equal Wasted Money

8" Canonsburg Shale Gas Conference l March 28 th , 2012

# Increasing Time Efficiency and Reducing Costs (Continued)

9" Canonsburg Shale Gas Conference l March 28 th , 2012 y"="0.001x"+" 1E 2 14

0 10 20 30 40 50

1,000 6,000 11,000 16,000 21,000 26,000 31,000 36,000 41,000 46,000 51,000Water""Source"Distance"(mi)

Equivalent"Miles"Per"Road"Lane 

## Water"Source"Distance"vs."Road"Lane"Miles

One"mile"results"in"1,028"miles"per"road"lane

# Increasing Time Efficiency and Reducing Costs (Continued)

10 Canonsburg Shale Gas Conference l March 28 th , 2012 1,077 1,067 1,057 1,047 1,038 1,028 1,019 1,010 1,001 y"=" 2 9.5285x"+" 2076.8

990 1,000 1,010 1,020 1,030 1,040 1,050 1,060 1,070 1,080 1,090

104 105 106 107 108 109 110 111 112 113 114 T r u c k L o a d s p e r W e l l Bbls"per"Truck"Load 

## Number"of"Truck"Loads"vs."Truck"Load"Efficiency

Average"Well"Volume ="113,095" bbls 1"bbl"load" r eduction" r esults"in"$2,000"increased"cost

# Increasing Time Efficiency and Reducing Costs (Continued)  Trucking vs. Pipeline  Withdrawal Proximity to Well Pads and Density  Foreseeable Operational Plans  Well Count  Proximity to Gas Pipeline Stream/River Crossings  Long Permitting Times Results in Alignment Shifts  Strict Regulatory Requirements  Increase Cost and Disturbance 

###  Upfront Capital Costs  Selecting the Right Material for Your Needs  Mixture of Materials 

###  Realize Your Trucking Costs  Include Road Repair and Replacement  Probability of Accidents  Environmental Impacts Associated with Diesel Emissions 

###  Savings of greater than $50 MM Over Lifespan of Operations and Pipeline

11 Canonsburg Shale Gas Conference l March 28 th , 2012

# Increasing Time Efficiency and Reducing Costs (Continued) WPX Energy Pipeline Examples (currently on hold until full development mode) Susquehanna River - 2 Water System 

###  Approximately 150,000 feet in Length  Capital Cost of $29 MM  Supplies 145 Wells  Savings of $20 MM vs. Trucking 

### Snake Creek - 2 Water System  Approximately 65,000 feet in Length  Capital Cost of $12 MM  Supplies 100 Wells 

###  Savings of $15 MM vs. Trucking  Intake is Close to Gas Pipeline Right- of - Way Donegal Lake Water System  Approximately 8,000 feet in Length 

###  Supplies 8 Wells and an Impoundment  Not Expanded due to High Trucking Efficiency 12 Canonsburg Shale Gas Conference l March 28 th , 2012

# Alternative Water Sources ± Beneficial Re-use of Degraded Water  Sewage Treatment Plants  Reduced BOD, Nitrate and Phosphorus Loading to Local Water Bodies  Incompatibility Issues  Low Volume and Passby Restrictions  Permitting Process 

##  Industrial Discharges  Mostly Located in Populated Areas  Reduces Trucking Efficiency 

##  Mine Pools  Primarily Located in Central and Western PA 

###  Review Drilling Logs  Liability 

##  AMD Impacted Streams  Reduces Passby Percent  Incompatibility Issues

13 Canonsburg Shale Gas Conference l March 28 th , 2012

# Summary

 Water Sourcing  Types  Criteria 

##  Topographic, Geographic and Regulatory Challenges  Steep Terrain  Well Pad Density  Changing Policies and Regulations 

##  Increased Efficiency  Design  Trucking vs. Piping 

##  Alternate Water Sources

14 Canonsburg Shale Gas Conference l March 28 th , 2012