Matthew Peloquin Senior Production Engineer Anadarko Petroleum Corporation

1 Shale Gas Water Management Marcellus Initiative 2012

March 29, 2012

# APC Operated Area

March 29, 2012 2 Marcellus Shale Play

0 20

Miles ANADARKO FOCUS AREA 

### Challenges

State Forests Populated Areas Topography

# Working the Entire Water Life Cycle

March 29, 2012 3 

### Water&Sourcing& Transporta1on& Fluid&Containment&

Hydraulic&Fracturing& Well&Flow:Back& Water&Filtra1on&&& Recycling&

# Understand the Need

March 29, 2012 4 

### Completion Assumptions Frac design
Frac schedule 100% Recycle/Reuse



### Production Assumptions

Gross Gas Forecast
Flowback Yield
Produced Yield 100% Recycle/Reuse


### Freshwater Supply
Required Volumes minus Recycled Volumes 

### Mul1:Year&Water&Forecast&

# Sourcing: Secure Proximal Water

March 29, 2012 5 Pine Creek 1

Pine Creek 2

Pine Creek Jersey Mills APC Surf Wtr WD via Pipe

WBS #3 Avis Williamsport APC Dedicated via Truck Jersey Shore

Suburban Goshen

Bellefonte Municipal / 3 rd Party

85 miles65 miles

# Trucking: Recognize Need for Dedicated Logistics
Manage 20+ water haulers
Up to 120 trucks on the road for APC at a given time Separate Freshwater and Residual Trucks EH&S Enforcement and Compliance Invoices, Invoices, Invoices... 24/7 On-Call for Foreman (dispatcher) Manual Data Entry

March 29, 2012 6

# Trucking: Attack Inefficiency

Logistics Value Proposition

Dedicated Water Command Center 24/7 Dispatch GPS Asset Tracking Added oversight on EH&S Compliance Streamlined billing/auditing
Dedicated fleet of trucks Manage all market carriers

March 29, 2012 7 Pe r i o d V o lu me Co st
20 1 0 B a s e li ne B a s e li ne
1H 20 1 1

P o s t -L o g i s t i c s 103%

174% 14% 13%

# GPS Asset Tracking

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# Field Overview

# GPS Asset Tracking

March 29, 2012 9 

# Active Frac Site

# GPS Asset Tracking

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# Producing Well

# Enhance EH&S Culture

EH&S Compliance

Dedicated EH&S Director and Field Personnel
Routine Mini-DOT inspections
Strict adherence drives ownership
CSA 2010

• Federal program

• Individual driver score (portable)

• Carrier score

• Identify and track desired drivers and carriers

March 29, 2012 11 

### Rou1ne&Inspec1on&Conformance&Report&

# Pumping Solutions: Reduce Truck Dependency

Withdrawal  Pipeline  Impoundment  Pads Major development area Proximal to river/creek
Streamlines execution 

### Bull Run Area 1-Year Activity 7 Pads (39 Wells) (1) 20 MMgal Impoundment (2) 4 MMgal Storage Tanks Total Storage 28 MMgal

March 29, 2012 12 6.5 miles4.5 miles

# Surface Water Withdrawal

Pine Creek 1

Volume: 0.720 mgd Two (2) multi-stage centrifugal pumps

• 250 gpm

• 850 psi discharge

• 250 HP 4.5 miles 6” FlexSteel pipeline to Impoundment

• Pressure rating = 1,500 psi

• ~1,500 ft elevation rise Total Water Pumped > 50 MMgal (since 4Q11) Pay-Out < 2 Months Eliminated > 10,000 truckloads

March 29, 2012 13

# Water Transfer: Bridging the Gap

Large Scale Storage to Well Pads
Midstream lays 16” and 12” HDPE water infrastructure with gas lines
Dual 8” Yelomine Pipe where lacking permanent pipe Temporary transfer pumps

• Up to 70 bpm depending on hydraulic profile

• MAOP typically 160 psi 

### FRESHWATER ONLY

March 29, 2012 14

# Automation: Provide Continuous Control

Fully Automated Water Withdrawal System

Satellite communication Remote start/stop High/Low alarms

• Pressure

• Tank Level

• Flowrate Daily withdrawal volumes

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# Automation: 24/7 Monitoring

Freshwater Impoundment Levels

Satellite communication High/Low Alarms Level Trending

March 29, 2012 16March 29, 2012 17