# Recycling Flowback and Produced Water for Use With Cross-linked Gel Fracs : Challenges and Solutions
October 29 th 

## , 2014 Noble Energy Inc. – Adam Prior, P.E. Colorado State University – Ken Carlson

## Forward-looking Statements and Non-GAAP Measures
This presentation contains certain “forward-looking statements” within the meaning of the federal securities law. Words such as “anticipates,”“believes,” “expects,” “intends,” “will,” “should,” “may,” and similar expressions may be used to identify forward-looking statements. Forwardlooking statements are not statements of historical fact and reflect Noble Energy’s current views about future events. They include estimates of oil and natural gas reserves and resources, estimates of future production, assumptions regarding future oil and natural gas pricing, planned drilling activity, future results of operations, projected cash flow and liquidity, business strategy and other plans and objectives for future operations. No assurances can be given that the forward-looking statements contained in this presentation will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, the ability to replace reserves, environmental risks, drilling and operating risks, exploration and development risks, competition, government regulation or other actions, the ability of management to execute its plans to meet its goals and other risks inherent in Noble Energy’s business that are discussed in its most recent Form 10-K and in other reports on file with the Securities and Exchange Commission. These reports are also available from Noble Energy’s offices or website, http://www.nobleenergyinc.com . Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Energy does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change. This presentation also contains certain historical and forward-looking non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Energy’s overall financial performance. These non-GAAP measures are broadly used to value and compare companies in the crude oil and natural gas industry. Please also see Noble Energy’s website at http://www.nobleenergyinc.com under “Investors” for reconciliations of the differences between any historical non-GAAP measures used in thispresentation and the most directly comparable GAAP financial measures. The GAAP measures most comparable to the forward-looking nonGAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort. The Securities and Exchange Commission requires oil and gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. The SEC permits the optional disclosure of probable and possible reserves, however, we have not disclosed our probable and possible reserves in our filings with the SEC. We use certain terms in this presentation, such as “net risked resources” and “gross mean resources.” These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosures and risk factors in our most recent Form 10-K and in other reports on file with the SEC, available from Noble Energy’s offices or website, http://www.nobleenergyinc.com

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## PRESENTATION SUMMARY

! 

### Background of Noble operations ! 

### Understanding the fluids alternatives ! 

### Water systems optimization ! 

### Flowback and produced water quality ! 

### Treatment challenges ! 

### Case studies ! 

### Conclusions

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## Noble DJ BASIN OPERATIONS

4 

### ! 

### 2014 Development ! Target 320 wells spud 

### ! 

### Expanding into Northern Colorado ! Best economics with 85% liquids



### ! 

### 2015 Growth ! Target 327 wells spud ! 600 Standard length equivalent wells

## NIOBRARA

! 

### Noble Energy well development and operations will produced 9 million bbls of flowback and produced water in 2014 ! 

### This is an opportunity to reduce reliance on fresh water

Procure

Fresh Water Truck Fresh Water Frack TruckWastewater DisposeWastewater

Procure

Fresh Water Pipe Fresh Water Frack PipeWastewater Recycle Frack Reuse

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### WQ Frac 

## Water Systems Optimization Noble Energy/Colorado State University Modeling



### Fresh Source Water Flowback volume (V FB )

Flowback water quality (WQ FB ) 

### V FB 

### WQ FB 

### Drilling/ Fracturing Injection Disposal well

Flowback Water Treatment V Frac 

### WQ Frac Frac Volume ( V Frac ) 

### Previous water management strategy Current water reuse strategy

Objective is to understand water quality limits of frac fluid

## WHY A NEED FOR RANGE OF FLUID SYSTEMS

! 

### Fluids ! Different formations

" Base on lithology

" Additional mineral compounds ! Different formation fluids ! Different objectives ! Different pumping configurations ! Composition of gas or oil ! Etc.

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## CROSSLINKED FRACS IN NIOBRARA

! 

### Different lithology

! 

### More conducive to Niobrara sandstone geology (more production)NIOBRARAMARCELLUS

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## COMMON FLUID SYSTEMS

! 

### Slickwater – Water with friction reducer ! Minimal width, rate is used to carry proppant (smaller proppant ) ! Low viscosity of 2 – 3 cP ! Frack rate up to 100 bbl /min ! Less impact to “tight” or impermeable formations ! Can be more economical



### ! 

### Linear gel – Water with polymer/guar ! Some frack width, some carrying capacity ! Medium viscosity of 10 – 30 cP ! Frack rate from 60 to 100 bbl /min

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## COMMON FLUID SYSTEMS

! 

### Cross-linked gel – Water with polymer/guar & cross-linkers ! High viscosity of 100 to 4000 cP ! Good frack width and proppant transport ! Proppant does not settle as it enters formation ! Less required HP → smaller locations ! Rate up to 60 bbl /min ! Higher initial costs ! Less leak off of fluid into formation

10Basics of Hydraulic Fracturing 2014 Recycled Usage ! YTD – 1,110,032 bbls
! Estimated – 1,500,000 bbls
2015 Projected Recycled Usage
! Estimated – 3,500,000 bbls



## NOBLE FRAC RECYCLING

## MORE THAN WATER TREATMENT

! 

### Difficult for water treatment companies to succeed in creating water that could be cross-linked alone ! Leads to over treatment and/or economically unfeasible



### ! 

### Iterative cycle of improvement with water treatment technologies and with frac fluid formula

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## RECYCLING CHALLENGES OF X-LINKED FRACS

! 

### Water quality for cross-linked gel fracs is restrictive ! Heavy metals interfere with cross-linking ! Gels can be sensitive to TDS and hardness ! Much more stringent that slickwater quality requirements



### ! 

### Some flowback characteristics are tough to treat ! Unbroken gels overwhelm treatment processes ! Emulsified oil or residual demulsifiers disrupt treatment processes ! Varying water quality and types of water ! Organics in the water

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### ! 

### WQ can vary significantly ! 

### Need to look at economics of WQ with fluids ! Increasing gel loading can add significant costs ! May require additional additives 

### ! 

### Example of fluid A and fluid B with same additives ! 

### Rheology testing a collaboration with Halliburton and CSU

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## CROSS-LINKED FRAC Water Quality

### ! 

### Flowback Water ! Highly variable ! WQ changes over time ! Can have significant gels ! Significant solids ! Could be emulsion breakers ! High organics 

### ! 

### Produced Water ! Formation characteristics

" Chlorides

" Sodium

" Hardness

" Metals ! Potential for oil in water ! High organics

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## WHAT’S IN THE WATER Flowback vs. Produced

## FLOWBACK WATER QUALITY

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### Total Organic Carbon (TOC) is the key parameter influencing treatment Well B - Hybrid Well D - Slickwater Well G - Gel

## FLOWBACK WATER QUALITY

17 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

0 10 20 30 40 50 60DOC (mg/L)

Time (days)

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

0 20 40 60Total Carbohydratesmg/L Glucose

Time (Days) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

0 10 20 30 40 50 60% of TOC asGlucose

Time (days) ! Total and dissolved organic Carbon is high
! Carbohydrates comprise much of Early Time Flowback organic load
! Fraction of OM that is gel related decreases rapidly

## COLLOID RESTABILIZATION

## INFLUENCE OF TDS

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### Ionic strength (TDS) increases with well age reducing electric double layer thickness (enhancing collisions and coagulation)

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

11,376 10,966 23,114 17,368 28,815 25,457 36,969 38,171 34,356EDL thickness,Å

TDS, mg/L

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

0 5000 10000 15000 20000 25000 30000 35000 40000 45000EDL thickness,Å

TDS, mg/L

## CASE STUDY I – CONCORD PRODUCED WATER SERVICES

High capacity coalescing separator Kinetic oxidation Cavitation sterilizer Dissolved air flotation (DAF) Micro bubble curtain filter Sludge dewatering

## CASE STUDY I – CONCORD PRODUCED WATER SERVICES

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## CASE STUDY I - Economical Recycle Model

On-site capture of coil tubing, flowback and produced water Understand desired water quality parameters Transfer recycled water via pipeline where feasible Maximize recycle volume Recover oil onsite for resale by producer Proper solids handling
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### Keys to Economical Recycling

Influent Water Quality pH Fe Al Ca Mg SO 4 Alk Turbidiy TSS 7.9 26 0.76 212 91.8 357 632 105 484 Effluent Water Quality pH Fe Al Ca Mg SO 4 Alk Turbidity TSS 6.9 0.742 0.034 168 90.6 12.1 255 6 7

### ! 

### Develop a solution to treat early time flowback and coil tubing water in the DJ Basin ! 

### Tune treatment process to meet necessary fracturing fluid water quality without over treating
Raw! Treated! pH! 6.52! 7.00! Specific!Gravity! 1.012! 1.013! Chlorides!(mg/L):! 11400! 11000! Potassium!(mg/L):! 400! 400! Sodium!(mg/L):! 7130! 6851! Sulfate!(mg/L):! 1700! 18! Iron!(mg/L):! 74! 2! Carbonates!(mg/L)! 0! 0! Bicarbonates!(mg/L)! 813! 325! Calcium!(Ca)!(mg/L):! 122! 88! Magnesium!(Mg)!(mg/L):! 46! 24! Total!Dissolved!Solids!(mg/L)! 21686! 18709! Turbidty!(NTU)! 800+! 6! 

## CASE STUDY II – HALLIBURTON WATER SOLUTIONS

## CASE STUDY II – HALLIBURTON WATER SOLUTIONS

24 Produced(Waer Day(3(Flowback Coil(Water Hydrochloric(Acid 17 14 14 Sodium(Hydroxide 35 87 156 Ferric(Chloride 67 163 336

## CASE STUDY II – HALLIBURTON WATER SOLUTIONS

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### Closing the Loop : Rheology testing of recycled fluid

Flowback volume (V FB ) Frac Volume ( V Frac )



### WQ Frac 

### Fresh source water

Flowback water quality (WQ FB ) 

### V FB 

### WQ FB 

### Drilling/ fracturing Injection disposal well

Flowback water treatment V Frac 

### WQ Frac Objective is to understand water quality limits of frac fluid

## WATER TREATMENT, RECYCLING & REUSE


# ! 

# Fixed facility ! 

## Most economical

" Fixed power costs



## " More consistent water quality



## " Optimized chemical application ! 

## More consistent effluent water quality



# ! 

# Possible negatives ! 

## May have to truck water ! 

## Proper sizing can be issue Economics

Field-Scale

Success

Meets water quality requirements in bench scale



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## WATER TREATMENT, RECYCLING AND REUSE


# ! 

# Mobile Recycling ! 

## Can be near frac operations ! 

## Potential for piping fluids



# ! 

# Possible negatives ! 

## Higher costs ! 

## May have inconsistent water quality and quantity

" Potentially impacts on frac ! 

## System must be designed for all water qualities

27 Economics

Field-Scale

Success

Meets water quality requirements in bench scale

## CONCLUSIONS

! 

### Recycling gel and slickwater frack flowback is feasible and CAN be economical for use in cross-linked fracs ! 

### Process required a progressive and iterative approach ! Bench Scale → Pilot Scale → Full Scale ! Treatment processes → Based on what’s in the water ! Frac fluid → Understand TRUE sensitivity of frac fluid to water quality ! Treatment processes → Flexible based on WQ and fluid requirements



### ! 

### Proper recycling has no adverse impacts to fracs or production ! 

### Potentially modify frac fluid to be less sensitive to recycled WQ

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# GOAL IS TO CONTINUE TO INCREASE RECYCLED WATER USE WITH GEL FRACS