# Meeting Summary

– Redacted Version

T opic : Meeting with Talisman Energy

, Inc. about Unconventional Oil and Gas

Meeting D ate : 06 August 201 2

Participants : Lisa Biddle, Erik Helm , Brian D’Amico (EPA/EAD)

Meghan Camp, Brent Ruminski (ERG , EPA contractor ) John Sohn (McKenna, Long, and Aldridge , LLP )

Walt Hufford ( Talisman Energy USA, Inc )

On 06 August 201 2

, the U.S. Environmental Protection Agency (EPA ) met with Talisman Energy USA

, Inc (TEUSA) to discuss their operations in unconventional oil and gas

. Discussion topics included:

 Talisman’s Current Production Activity ;

 Well Completion and Production ; and

 General Cost Information

.

These meeting summary notes reflect TEUSA’s current operations at the time of this meeting. Attachment 1 lists the meeting participants

. 

### Attachment 2 provides a summary of costs that Talisman provided during the meeting.

Talisman ’s 2012 Marcellus Production Activity

T EUSA is a wholly owned subsidiary of T alisman Energy, Inc.

, a global oil and gas produc tion company headquarte red in Calgary , Canada

. T EUSA’s operations are headquartered in Warrendale, PA and have US unconventional operations in the Marcellus and Eagle Ford

Shale formations.

Well Completion and Production

T EUSA provided information on the following fresh water and flowback/produced water handling and management practices:

 Fresh Water Acquisition;

 Hydraulic Fracturing; and

 Flowback/Produced Water Management Practices

Fresh Water Acquisition

TEUSA stated that all of their freshwater sources are within the Susquehanna River Basin Commission’s (SRBC) jurisdiction. Acquiring water costs [REDACTED] per every 1,000

### Meeting Summary Page 2 of 6

gallons. Talisman currently operates approximately 12 to 13 withdrawal points. Each point is permitted fo r a specific withdrawal rate depending on the stream size , and source water management at each point depend s on the permitted volume. For example, withdrawal points in

smaller streams will have a slower withdrawal rate. TEUSA will typically store the water withdrawn from these points in a large storage impoundment. In contrast, at some withdrawal points from larger streams TEUSA can fill a tank truck ( approimately 120 bbl) directly from the

river.

T EUSA ’s Marcellus operations include several freshwater impo undments ranging in size from one million gallons to 15.5 million gallons. Construction costs for impoundments are typically [REDACTED] . T EUSA estimates that their total freshwater storage capacity is [REDACTED]

.

TEUSA stated that it has used temporary wa ter line s to transport freshwater from impoundments to hydraulic fracturing sites. These water lines consist of six

- inch flex steel line

. The cost for installing the lines are [REDACTED] per mile, which includes the cost of

construction and materials.

H ydraulic Fracturing

According to TEUSA

, their typical Marcellus well is fractured in 10 to 15 stages and requires approximately 10,000 barrels of water per stage. Water sources for hydraulic fracturing include fresh river water and recycled flowback and pr oduced water from other TEUSA

Marcellus wells. TEUSA explained that the freshwater to recycled water blending ratios depend on the amount of available reuse water, and as a result, can range from 90:10 to 70:30 or even 50:50.

Prior to reuse, TEUSA monitors recycled flowback and produced water for total dissolved solids (TDS) , chlorides, and heavy metals: barium, strontium, and iron. TEUSA

compares the quality of the recycled water to information that they have collected on the

Marcellus formation ch emistry to ensure that the recycled water will not add anything that would be incompatible with the formation.

TEUSA stated that chlorides and iron are important parameters to monitor throughout the well completion and production process:

 Iron can cause rusting, which can clog perforations and prevent the flow of gas to the

well.

 Chloride concentrations can indicate well fouling and provide information about gas production levels. TEUSA explained that the flowback and produced water flow rates depend on the gas production rates. So when gas production is good, the water will flow faster. If gas production slows, then the water flow rate will slow. As a result,

the water will have increased contact time with the formation and will dissolve more

chlorides. Therefore higher chloride concentrations can indicate problems with well production levels.

### Meeting Summary Page 3 of 6

In addition, TEUSA clarified that it only uses Marcellus

- generated flowback and produced water for fracturing Marcellus wells.

EPA asked TEUSA whether using recy cled flowback and produced water for hydraulic fracturing added to the fracturing costs

, for example, by increas ing costs for water storage and chemical usage. TEUSA explained that there are cost increases, but that these increases are on the order of penn ies per barrel of recycled wastewater.

Flowback/Produced Water Management Practices

TEUSA’s current flowback/produced water management strategy is to recycle flowback and produced water without pretreatment. Talisman explained that they had previously pret reated

their flowback/produced water at a cost of approximately [REDACTED]. Further analysis of the flowback/produced water indicated that direct reuse of these waters for further completion operations could be conducted. During the flowback period, flowba ck is collected in 500 bbl fracturing tanks, which TEUSA rents at a cost of [REDACTED] . The collected flowback is transported directly from the well pad to the next well pad where wells are scheduled to be completed

. TEUSA estimates that the flowback perio d last appropriately one to two weeks. TEUSA explained that the decision to switch over to production is usually driven by flowback

flow rate. TEUSA uses equipment specifically designed to separate water and gas at high flow

rates however the availability of this equipment is limited. Therefore, once the flowback rate decreases to 10 bbl/hr or less, TEUSA switches the well over to production mode to free up the flowback equipment.

Once the well is in production mode, the produced water is collected in 300 bbl above ground storage tanks owned by TEUSA. The collected produced water is periodically hauled from the well pad and transported to the next fracturing job via truck.

TEUSA explained that they previously sent flowback/produced water to Terra Aqua Resource Management (TARM) and HydroRecovery for disposal, but they currently do not send

any flowback/produced water to CWTs. TEUSA estimated that CWT costs are approximately [REDACTED] for treatment. Transporting the flowback/produced water to the CWT was a 1.5 to 2 hour trip at a cost of about [REDACTED] per truck (t ruck capacity : [REDACTED] ). TEUSA indicated they send approximately 7 % of their flowback/produced water to underground injection wells. TEUSA stated that the UIC disposal costs a re considerably cheaper than CWT disposal costs, but UIC disposal requires transportation costs more because of the increased

distance

. TEUSA estimates that the total cost for UIC disposal (including transportation ) is approximately [REDACTED] . The cost of injection, alone, is about [REDACTED]

.

### Meeting Summary Page 4 of 6

A TTACHMENT 

### 1

Table A

- 1. List of Teleconference Participants

Name Affiliation Phone Email

John Sohn McKenna, Long, and Aldridge 202

- 496

- 7642 jsohn@mckennalong.com

Walt Hufford T EUSA 724

- 814

- 6303 whufford@talismanusa.com

Lisa Biddle US EPA 202

- 566

- 0350 Biddle.Lisa@epamail.epa.gov

Erik Helm US EPA 202

- 566

- 1049 Helm.Erik@epa.gov

Brian D’Amico US EPA 202

- 566

- 0350 Damico.Brian@epa.gov Meghan Camp ERG (EPA contractor) 703

- 633

- 1684 meghan.camp@erg.com

Brent Ruminski ERG (EPA contractor) 703

- 633

- 1701 brent.ruminski@erg.com

### Meeting Summary Page 5 of 6

A TTACHMENT 

### 2

Table A

- 2. Summary of Costs Provided by T EUSA

[REDACTED]

### Meeting Summary Page 6 of 6

A TTACHMENT 

### 3

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