Taking a Proactive Approach

to Water Recycling in the Barnett Shale

Jay Ewing

Fort Worth Business Press Barnett Shale SymposiumFebruary 29, 2008
Outline

• Devon overview and current activity• Overview of two waste waters in the Barnett• Devon’s proactive approach to water recycling• Future activity in water recycling
Devon Energy Overview

Who We Are and Current Activity
NYSE: DVN www.devonenergy.com page 4

Oil and gas exploration and production companyLeading U.S.-based independent gas producerAmong the largest natural gas processorsActively involved in strategic acquisitions

Who We Are
NYSE: DVN www.devonenergy.com page 5

Larger Than You Might Think...Enterprise Value

$0 $5 $10 $15 $20 $25 $30 $35 

Southwest Airlines

Gap

Starbucks

Marriott

Nike

FedEx

Haliburton

Anheuser-Busch

US$, Billions

Source: Enterprise Value as stated on Yahoo! Key statistics on February 6, 2008.
NYSE: DVN www.devonenergy.com page 6

Devon’s Worldwide Operation

CANADA

BRAZIL

GULF OF MEXICO

U.S. ONSHORE AZERBA

Q4 '07 Production

8%

58%

25%

9%

U.S Onshore Canada International Gulf
NYSE: DVN www.devonenergy.com page 7

North America Onshore Positi

OK

TX

NM

WY

MT

Largest U.SNet acreage2008 plans: 

2nd Largest 

Net acreage2008 plans: 

Net acreag2008 plans: 

Largest ind3rd Largest 

Net acreage2008 plans: 

Net acreage2008 plans: 

Largest indNet acreag2008 plans: 

Alberta / 

B.C.

Montana

Wyoming

New Mexico

Oklahoma

Texas

Major player throughout western U.S. and Canada

Alberta

B.C.
NYSE: DVN www.devonenergy.com page 8

Current Activity in Fort Worth Basin Drilling

Producing wells: ≈ 3,200 wells

2005 activity: Drilled 268 wells2006 activity: Drilled 383 wells2007 activity: Drilled 522 wells2008 activity: Project 600 wellsDevon’s activity accounts for approximately 25% of the total drilling activity in the Barnett Shale.
NYSE: DVN www.devonenergy.com page 9

Current Activity in Fort WorthBasin Fracturing

Working interes1st production: To reach 50 MB

B R A Z I L

• Each horizontal well is initially fractured in 4-6 stag• Devon currently conducts about 200 hydraulic fract

stages per month on 50 wells

• Approximately 3.5 million gallons of fresh water are 

per well
NYSE: DVN www.devonenergy.com page 10

Trifecta FracJohnson County
Two Different Waste Waters 

the Barnett Shale

Overview
NYSE: DVN www.devonenergy.com page 12

Flow-back vs. Produced Wate

Flow-back Water

• Water recovered immediately 

following the fracture stimulation of the Barnett

• Chloride content begins near 

zero then rises to 40-50,000 ppm

• 20-30% of the volume pumped 

during frac is recovered in first 2-3 weeks following the frac

• Devon is recycling 90-100% of 

the flow-back water recovered 
NYSE: DVN www.devonenergy.com page 13

Flow-back vs. Produced Wate

Produced Water

• Water pre-existing in the 

Barnett or the formation below, Ellenberger

• Chloride content 60,000 to 

100,000 ppm

• Some amount of water is 

produced for life of the well

• Amount produced varies with 

each well from near zero to 400-500 bbls/day

• Disposed by re-injecting into 

the Ellenberger formation 
Devon’s Proactive Approach 

Water Recycling
NYSE: DVN www.devonenergy.com page 15

Devon: Proactive Approach tWater Recycling

• Piloted two technologies:

— Mobile heated distillation 

system

— Sequential filtration/ 

reverse osmosis

• Actively participates in a 

Barnett Shale industry group:

— Barnett Shale Water 

Conservation and Management Committee 
NYSE: DVN www.devonenergy.com page 16

Mobile Heated Distillation Sys(NOMAD)

• Technology approved by the 

Railroad Commission of Texas in 2005

• Implemented in 2005 in 

partnership with Fountain Quail Water Management

• Vaporizes the frac flow-back 

wastewater and condenses it into clean, distilled water

• Remaining concentrated water 

removed for disposal or utilized for controlling pressures in another well completion as a “kill fluid” 
NYSE: DVN www.devonenergy.com page 17

NOMAD Water Distillation Uni
NYSE: DVN www.devonenergy.com page 18

NOMAD Water Recycling Locations

Devon currently has 9 NOMAD units operating at four (4) strategic locations:• Blakely (SW Denton Co.)• Johnson Ranch (E Wise Co.)• Godley (W Johnson Co.)• Circle R (W Johnson Co.)

Wise

Parker

Hood
NYSE: DVN www.devonenergy.com page 19

Johnson County Site
NYSE: DVN www.devonenergy.com page 20

NOMAD Water Recycling Resu

• 5 million barrels processed 

(210 million gallons) processed

• 4 million barrels of distilled 

water generated

• 50 wells fraced with recycled 

water
NYSE: DVN www.devonenergy.com page 21

Sequential FiltrationReverse Osmosis

• Approved for pilot program by 

the Railroad Commission of Texas in 2006

• Tested two systems in 2007• Limited capability at this time• Low efficiency• Further testing required 
NYSE: DVN www.devonenergy.com page 22

Water Processed by Year

7.3

65.4

6

53.6

82 82 

0

20406080

100120140160

2005 2006 

Million 

Gallons

Feed Water Distillate Percen
NYSE: DVN www.devonenergy.com page 23

January 2008Cost & Production Report

Feed Water 338,974 BbFresh Water Produced 271,179 BbConcentrate Produced 67,795 BblsEfficiency 80%Total Cost of Processing $874,552Trucking Cost $491,512Concentrate Disposal $135,590Cost per BBL $4.43/BblValue of Fresh Water $366,091Net Disposal Cost $3.35/Bbl
Future Activity in Water 

Recycling
NYSE: DVN www.devonenergy.com page 25

Barnett Shale Water Conservation aManagement Committee (BSWCMC)

• Committee formed in 2006• Facilitated by Dr. Tom Hayes with the Gas 

Technology Institute

• Comprised of 14 operators in the Barnett Shale• Meet monthly to discuss emerging technologies

• Committee formed in 2006• Facilitated by Dr. Tom Hayes, GTI• Comprised of 14 operators in the Barnett Shale• Meet monthly to discuss emerging technologies
NYSE: DVN www.devonenergy.com page 26

BSWCMC Activities

• Reviewed presentations on six recycling techno• Reviewed presentations from Tarrant Regional 

and Brazos River Authority on water availabilit

• Completed industry water use survey for subm

Water Development Board for study completed 

• Facilitated fracturing expert panel focused on 

required for completing a successful Barnett fr
NYSE: DVN www.devonenergy.com page 27

BSWCMC Activities

• Submitting proposal to Research Partnership to 

for America (RPSEA) for assistance in future rethe following participants:

— University of Texas

— Bureau of Economic Geology— Illinois Institute of Technology— Texerra — GeoPure/Texas A&M— Gas Technology Institute
Conclusions
NYSE: DVN www.devonenergy.com page 29

Conclusions

• Conservation, recycling and reuse of water conti

of mind in the Barnett Shale region

• The ability to recycle “flow-back” has increased 

in a very short time through a proactive approach like Devon and Fountain Quail

• As current technologies advance and future tech

emerge, the opportunities are unlimited for gas plead the way in effective stewardship of our regivaluable resources
Thank You.