1. Ohio Department of NATURAL RESOURCES

2. James Zehringer Director, Ohio Department of Natural Resources STATE OF THE PLAY

3. 2012 Shale Production Numbers Rick Simmers, Chief of Oil and Gas David Mustine, JobsOhio Managing Director of Energy, Chemicals, & Polymers STATE OF THE PLAY

6. Sensible Regulations for Ohio SB 165SB 315JCARR Rule Changes

8. “Ohio is implementing lessons and best practices from around the country, and is creating a rigorous and responsive regulatory system for the new era of oil and gas development in the state.” -Daniel Yergin

9. Historical Oil & Gas Production in Ohio Ohio’s Historic Oil and Gas Plays 1860 to Present

10. 2012 Shale Production Numbers http://oilandgas.ohiodnr.gov/production

11. 2012 Shale Production Numbers OIL PRODUCTION NATURAL GAS PRODUCTION 635,896 BARRELS 12,836,662 MCF 93% Increase From 2011 80% Increase From 2011

12. Ohio’s Utica Production 12% OIL 16% GAS

13. Utica Compared to Conventional Production

14. How Utica Activity Compares to ODNR Projections In December 2011 ODNR Projected 200-250 Drilled Utica Wells By the End of 2012 215 Wells Were Drilled In December 2011 ODNR Projected 50 Wells In Production By the End of 2012 67 Utica Wells Were Producing

15. Utica Permits, Drilling and Production

16. Liquid Natural Gases (LNGs) Are Why the Industry is Here… And Why They Are Staying Dry vs. Wet Gas Natural GasNatural Gas Liquids

17. Midstream Processing

18. Utica Production Compared with Conventional production YearOilGas # wells (fulltime equivalent)Oil *Gas **# wells 2011 46,326 2,561,5242 4,809,451 70,728,31450,192 2012 635,896 12,836,66222 4,665,167 65,777,33250,000 2013 2,439,024 49,236,51684 4,525,212 61,172,91949,700 2014 4,355,400 87,922,350150 4,389,456 56,890,81549,400 2015 7,259,000 146,537,250250 4,257,772 52,908,45849,100 * 3% decline rate ** 7% decline rate

19. Sensible Regulation Ohio Department of Natural Resources Division of Oil and Gas Resources Management Goal: Continue to Protect the Public and the Environment Without Hindering Economic Growth

20. Sensible Regulation Goal: Continue to Protect the Public and the Environment… TENORM and Brine

21. Sensible Regulation Goal: Continue to Protect the Public and the Environment… More Frequent Reporting

22. Sensible Regulation Goal: …Without Hindering Economic Growth Sensible and Fair Tax Policy

23. Rick Simmers Chief, ODNR Division of Oil & Gas Resources Management STATE OF THE PLAY

24. 2012 Utica Production

28. Shale Permits Issued

29. Shale Wells Drilled

30. Production by Company

31. Drill Rig Locations

33. 2012 Utica Production

36. Midstream Pipelines and Processors

37. Ohio Utica Shale Update ODNR Presentation 16 May 2013 David Mustine, Managing Director Energy; Polymers and Chemicals

38. Key Observations on “State of Play” Return expectations are strong:  CHK rate of return averaging in excess of 40%.  Gulfport rate of return of 100% for Boy Scout and Wagner wells. Midstream infrastructure has constrained production. Bottleneck eliminated when 1 BCF of Utica processing is online by YE 2013. More rigs active in Ohio Utica than WVa and western Pa. Buyers market for shale acreage, even in most prolific plays (Richard Zeitis) Many factors influence why companies buy or sell acreage:  Chesapeake selling only 10% of Utica holdings. Have also sold acreage in Eagle Ford, Mississippi Lime, Permian, Marcellus and Delaware basins. Reducing debt.  EnerVest attempting to sell Utica acreage. Strategy is to acquire, build up then sell onshore properties. Also own 2% royalty in 880,000 Utica acres.  Multi-decade inventories or development acreage are in place for many companies.

39. Economic Impact of Shale Ohio Companies Benefiting from Shale Activity V&M Star, Youngstown – steel tubing Miller Supply, Inc., Wooster – oilfield supply and services Pioneer Group, Marietta – midstream fabrication and construction Timken, Canton – manufacturer and supplier of bearings Ariel Corporation, Mt. Vernon – gas compressors PotashCorp, Lima – producer of nitrogen-based products; large natural gas user Gorman-Rupp, Mansfield – pumps used in oilfield operations Kelchner, Springboro – construction DBA Mutual Tool, Tipp City – fabricating

40. CompanyLocationOperationsEstimated Investments MarkWestHarrison & Noble counties G, P, & F$1.5 Billion M3 Midstream Partnership Columbiana & Harrison counties G, P, & F$1.2 Billion NiSourceEastern OhioG&P$390 Million Dominion/Ca iman* Eastern OhioG&P$800 Million Spectra*Northern & Eastern Ohio Natural Gas Pipeline $430 Million - plus Enterprise*Eastern, Central, & Southwestern Ohio Ethane Pipeline$1 Billion-plus *Announced Gathering – Processing – Fractionation Pipeline & Midstream Projects Ohio Utica Shale

41. Investments in Ohio Utica Shale CompanyCountyInvestment Chesapeake EnergyStark$7 million and 600 jobs HalliburtonMuskingum$150 Million and 300 jobs* SchlumbergerTuscarawas$150 Million and 236 jobs* Baker HughesStarkTBD* ExterranMahoning$13 Million and 100 jobs Six C FabricationPortage$2 million and 250 jobs WeatherfordMahoningTBD* Marathon PetroleumStarkNew Canton refinery truck rack, with ability to process 18,000 bpd at Catlettsburg, which supplies products to central and southern Ohio. *Over three years, dependent upon actual rig activity

42. Pursuing Downstream Opportunities: Global polymer industry leader World class university-based research and strong engineering programs Four refineries in Ohio Utica shale provides low-cost and reliable supply of natural gas and natural gas liquids Possible links to specialty chemicals

43. Pursuing Downstream Opportunities: Natural Gas Liquids Ethane/Propane/Butane Ethylene/Propylene/Butadiene Plastics/Synthetic Rubber

44. Ohio Department of NATURAL RESOURCES