# Marcellus Water Beneficial Reuse Strategy Christie Webb Talisman Energy USA Inc. March 28, 20122 

## Marcellus Production Water Identification

• Marcellus Formation Recoveries • Regionally variable – 15-50+% recoveries • 1751 wells drilled in Pennsylvania in 2011 by all operators* –between 1-3BB gallons recovered • Talisman’s total 2011 generation beneficially reused: ~114MM gallons • Fluid characterization consistency from the Marcellus • Geological setting and influence on water characterization
• Factors Impacting Reuse • Completions activity level • Fluid characterization • Treatment requirements • Storage of flowback/production • Downhole compatibility • Fracture Additive compatibility • Cost - $/bbl all in • Disclosure – fracfocus.org
• Benefits of Reuse • Reduction in fresh water consumption • Mitigates the need for deep well disposal / surface discharge • Economics *facts obtained from Department of Environmental Protection - http://www.dep.state.pa.us/dep/deputate/minres/oilgas/2011%20Wells%20Drilled.gif3 

# Talisman Water Terminology Flowchart

Disposal Fresh Water • Surface)Water)

Bodies)(e.g.,)lakes,) rivers,)streams,) ponds)) • Freshwater)

Supplies/UAliAes) • Groundwater)

Alternative Water
• Brackish)Water) • Saline)Water) • Municipal)or)

Industrial) Wastewater) • Acid)Mine)Drainage) • NonHfresh)water)

from)another) Talisman)asset) (e.g.,)Trenton) Black)River)) Water Withdrawal
Water Withdrawal Produc'on) Comple'ons)(i.e.)fracking)) Flowback Water Treatment) Reused Water Recycled Water

Produced Water

T alis man A s s et ( e.g., M ar cellus ) Disposal Produced Water4 

# Marcellus Water Flow Schematic5 

## Marcellus Water Reuse Strategy

• Talisman Energy USA has taken a structured approach to beneficial reuse in accordance with regulatory and environmental standards

• Evaluate the means of reuse
• Evaluate the source fluid
• Evaluate downhole and frac fluid compatibility
• Evaluate economics6 

## Evaluate the means of reuse

• Understand source generation rates and regional allocation • Daily averages and standard deviations from this average • Yearly water production forecast • Relationship to gas production – 5-10bbl/mcf
• Understand the completions schedule • How many frac crews • Frac crew downtimes – planned and unplanned • Frac design • total clean volume • blend of fresh/flowback • single well completions • Rate of consumption – efficiency of fracing operations
• Mass balance of rate of reuse vs. rate of generation • Supply vs Demand • Storage to meet shortfalls7 

## Evaluate the characteristics of produced and fresh water

• Understand characteristics of source water recovered • Sequential source fluid analysis to understand characteristics as a function of time • Development of production water ‘type curve’ • Core analyses – dissolution testing • Influences to downhole salinity presence


### • Understand characteristics of makeup water • Fresh fluid characteristics • Presence of scaling constituents • Bacterial influence


### • Sampling across development to derive trends and evaluate consistencies regionally8 

## Evaluate downhole compatibility

• Understanding the properties native to the reservoir • Frac fluid equilibrium with formation • Formation chemistry – ionic balance, probable salts, solubility • Total Dissolved Solids increase over time (increased solubilization) of scaling cation • Blend characteristics @ 20% Blend, 30% Blend, 50% Blend



### • Scaling and precipitation considerations • Observation on surface equipment and tubulars • Cationic heavy metal salt formation - Barium, Strontium, Calcium, Magnesium • Regionally dependent – Marcellus water in the north is not Marcellus water in the south9 

## Treatment

• Treatment Considerations • Hardness, solids, bacteria removal needs • Conditioned fluid compatibility • Treatment onsite, offsite • Cost of treatment • Means of storage post treatment


### • Technologies available for treatment if required • Chemical assistive hardness removal • Filtration for suspended solid removal • Distillation (Evaporation)/crystallization technology • Organic removal – biocides, electric coagulation, UV penetration10 

## Evaluate frac fluid compatibility

• Understand frac fluid chemical limitations and improvements • Suspended solids • Salinity


### • Understand abilities and effectiveness of the frac fluid chemicals under different blend ratios • Scale inhibitors • Bacteria treatment • Friction Reducers


### • Rate of recycle • Pre-treatment of fluid requirements • Seasonal influence11 

## Evaluate economics

• Cost and type of transport • Trucks • Pipeline


### • Cost and type of storage • Portable 500bbl wheelie tanks • Above ground containment • Flowback impoundments
• All in Cost $/bbl12 

### So what about when you cannot beneficially reuse fluid

• Influencing factors • Activity level • Incompatibility • Cost


### • Options • Deep well injection • Water treatment facilities that take to full distillation • Operator based treatments13 

### Closing statements

• Where do we go from here • $/bbl environmentally and regulatory compliant options wins the race • Transportation $/bbl – large factor • Gas price environment • Sustainability • Contract models to provide guarantees or act as insurance policy