RICK COOPER DIRECTOR OF THE DIVISION OF GAS AND OIL VIRGINIA DEPARTMENT OF MINES, MINERALS AND ENERGY Gas and Oil Well Drilling Requirements for the Tidewater Area

Current Gas and Oil Code of Virginia Specific to Tidewater area 45.1 – G – G. All operators shall comply with : All operators shall comply with :  Virginia Gas and Oil Act  Virginia Gas and Oil Regulations  Virginia Gas and Oil Board Regulations  The State Water Control Law  Virginia Pollutant Discharge Elimination System Regulations.  Additional items as required by of The Virginia Code

Review of Gas and Oil Drilling pursuant to state code In accordance with Virginia Code , drilling is prohibited in the waters of the Chesapeake Bay or any of its tributaries:  within 500 feet of the shoreline of the waters of the Bay  DMME will work with DEQ on Environmental Impact Assessment (EIA) review

Well Information in the Taylorsville Basin

Water Quality in Drilling Areas Conduct an analysis of ground water within 500’ of the drilling location Water tested, submitted and approved by the Division using Department of Environmental Quality (DEQ) “Water Quality Criteria for Groundwater”

Water table Water Production Zones Producing zones Protects fresh water zones Protects fracture gradient to allow drilling to the next zone Casing + cementing helps to assure separation of drilling fluids from the formation Seals water from entering the wellbore The casing must be a minimum of 2,500 feet or 300 feet below the lowest known water source.

` Producing zone aquifer Packer or Cement Basket Cement is pumped under pressure through the casing and circulated up the backside of the casing to protect the aquifer. Cement is inserted down the backside of the casing. The cement the packer/basket and fills to the surface. Cement is required to set for 8 hours prior to re- drilling

Typical Casing Design VA also has a water replacement law requiring operators to replace domestic water sources if damaged by gas and oil operations. Rock Formations containing natural gas are several thousand feet deep. Multiple casings are cemented to surface to protect water resources.

What is Hydraulic Fracturing? The process in which fluid pressure is applied to exposed reservoir rock until fracturing occurs. The fluid sometimes carries a proppant (usually sand) into the fracture. The fracture closes on the sand, which generally has a higher porosity than the reservoir rock. Hydrocarbons (oil and natural gas) flow more freely to the wellbore (increases conductivity). From API

Nitrogen Only – Horizontal Shale Wells In Virginia, Shale Wells are being stimulated with Nitrogen. Why use Nitrogen??? Nitrogen is 78% of what we breathe…so it’s environmentally friendly Using Nitrogen allows for less water to be introduced to the target reservoir Lower Huron Shale Over 1 mile deep