Liquid Petroleum Gel (LPG) Fracturing Presented by: Shannon Mendoza, Mong Dao, Charles Heldridge, Frances Carter, Josh Johnson, Steven Reese Olympia Energy Making energy better.

 Protect new energy production  Barnett Shale gives stable resource  Prevent water contamination and ground destabilization LPG Fracturing

 Tim, Christine, and their 10-year-old daughter Reilly  Lived in Wise County, Texas, for 6 years  On Sept. 16, 2009, lives turned upside down  Aruba Petroleum started to drill 2 wells on property The Ruggieros

 Tim – loss of feeling in his extremities  Christine – skin rashes, nausea, and some memory loss  Reilly – diagnosed with asthma

 Drinking water contaminated  Some say just buy fresh drinking water, but they raise horses also  Horses have to drink from local supply, which may cause long term health problems

 Located in the Fort Worth Basin  Discovered in the 1950s  Estimated to hold 30 trillion cubic feet of natural gas  Commercialized in the late 1980s

Natural Gas Production at Barnett Shale From 1993 to 2013 Year Source: The U.S. Geological Survey and City-dataSource: Texas Railroad Commission Production Data Query System

 Arsenic levels exceeded federal limits  Highly concentrated heavy metals in water near the wells  Some are radioactive Source: environment and science technology

 Liquid Petroleum Gel  No water used ◦ Saves 3.5 million gallons/well  LPG fracturing replaces water with gel

 Water contamination ◦ No water contaminated during process ◦ No water disposal  Earthquakes ◦ Disposal wells eliminated

 No water necessary  Easily reusable (unlike water)  No disposal required

 Andrew Shultz, Olympia Energy senior regional manager for the DFW area  30 years of experience  Oversee transportation of LPG wells  Oversee installation of LPG wells

 Based in Canada  Started in 2007  Uses patented waterless Liquid Petroleum Gas gel ◦ Yields higher reservoir production ◦ Eliminates concerns over water use in fracturing  Recently made headway in the Eagle Ford shale of South Texas

 GasFrac is providing 2 senior engineers ◦ Each with 25+years of experience  Will help Mr. Shultz with the installation of LPG wells  Will give a formal training program to our employees ◦ GasFrac’s LPG wells are designed for LPG fracturing, not adapted

 40 workers per well needed to uninstall hydraulic and reinstall LPG  4 wells from GasFrac  160 workers total  Project is estimated to be completed in 3 months

 Olympia Energy’s transition to LPG fracturing will improve environmental and living conditions in energy affected areas  Protect Employee Livelihood ◦ Employees will take pride in their work ◦ Bettering the environment ◦ Protecting the people of DFW

 Will provide: ◦ Drilling equipment ◦ Field engineers ◦ Patented LPG technology and training  In return: ◦ Provide entry into Barnett Shale ◦ Percentage of revenues

 Revenue: $20 million  Operating Expenses: $15 million  Average cost per well: $2.38 million  Net income: $5 million

 Replacing 4 hydraulic fracturing wells ◦ $12 million  Retraining current employees ◦ $3 million  Total cost: $15 million ◦ Does not include yearly operating expense ◦ Total expenses estimated to be over $30 million

 1 st year of operation: $4 million in net income

 Hydraulic fracturing contaminates the water it uses with harmful chemicals  Cabot Oil & Gas reported spending $109,000 on systems to remove methane from well water for 14 households  Taxpayers receive biggest burden  LPG fracking avoids this issue

 We request $15 million from the Chamber of Commerce to cover: ◦ $12 million in construction costs ◦ $3 million in retraining costs  We will cover operating expenses totaling an additional $15 million  LPG gel has no additional long-term cost in comparison to hydraulic methods.  Benefits to the DFW area will more than compensate for initial costs.

 LPG fracking will: ◦ Eliminate water contamination ◦ Prevent fracking-related earthquakes ◦ Produce natural gas efficiently  Partnership with GasFrac will aid transition

Oil and Gas Journal, (2014). Barnet Shale. Retrieved from: Texas Rail Road Commission (2014). Barnett Shale information. Retrieved from: Fontenot, B., Hunt, L., Hildenbrand, Z., Carlton, D., Oka, H., Walton, J., Hopkins, D., Osorio, A., Bjorndal, B., Hu, Q., and Schug, K. (2013). An Evaluation of Water Quality in Private Drinking Water Wells Near Natural Gas Extraction Sites in the Barnett Shale Formation. Environnemental Science Technology, 47 (17), pp 10032– DOI: /es