1. Global Energy Security Forum Miami, Florida March 26, 2013 Mark K. Boling President HYDRAULIC FRACTURING OPERATIONS: SEPARATING FACT FROM FICTION

2. 1 Hydraulic Fracturing Operations What are Hydraulic Fracturing Operations?

3. Hydraulic Fracturing Operations 2 Hydraulic Fracturing Video

4. Regulatory Considerations 3 Surface Considerations Subsurface Considerations

5. Surface Considerations 4 Air Emissions Water Supply Water Handling Water Reuse & Disposal Surface Impact Drilling Locations Truck Traffic & Road Damage Infrastructure

6. Subsurface Considerations 5 Protecting Underground Water Resources Frac Fluid Disclosure

7. Protecting Underground Water Resources 6 Well Integrity Is the Key!

8. Well Integrity 7 Well Construction Standards 2 Evaluate Stratigraphic Confinement 1 Evaluate Mechanical Integrity of Well 3 Monitor Frac Job & Producing Well 4

9. FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING TARGET PRODUCING ZONE GOOD MECHANICAL INTEGRITY

10. CEMENT CHANNELING PRESSURE BUILDS UP PRESSURE BUILDS UP CONDUCTOR PIPE SURFACE CASING PRODUCTION CASING FRESH WATER AQUIFER ZONE SHALLOW PRODUCING ZONE TARGET PRODUCING ZONE CASING CEMENT FORMATION

11. Surface Considerations 10 Water Supply Water Handling Water Reuse & Disposal

12. Water Supply 11 Location, Rate & Timing of Withdrawals Cumulative Impact Assessment 11 Volumes Needed

13. Water Handling 12 Trucks vs. Pipeline Truck Traffic Road Damage Impoundments vs. Tanks Closed-Loop Drilling Systems Recycling Logistics Air Emissions Tracking Wastewater Characterize Wastewater Record Volumes Produced Verify Volumes Delivered

14. Water Reuse & Disposal Water Recycling & Reuse Volume and quality of wastewater Chemical compatibility Storage and transportation logistics Water Treatment Facilities Flowback & produced water chemistry Capacity & Capability limitations (NORM, DBPs, heavy metals) Central vs. drill site facilities Water Disposal Wells Geological & hydrological limitations NIMBY concerns Triggered seismicity considerations 13

15. 25,000’ IGNEOUS BASEMENT LIMESTONE SHALE TRIGGERED SEISMICITY WATER DISPOSAL WELL HORIZONTAL SHALE WELL SAND The largest recorded seismic event generates the same amount of energy as would be released when dropping a gallon of milk from chest high to the floor. SHEAR STRESS EXISTING STRESS NORMAL STRESS NEW STRESS 14

16. Surface Considerations 15 Reduction Technology Catalytic reduction Ultra-low sulfur diesel fuel LNG and CNG fuels Oxidation catalysts Green completions, vapor recovery units, low bleed/no bleed pneumatic devices, plunger lift systems, leak detection Air Emissions Emission Type NO x SO 2 CO PM CH 4 VOCs (incl. BTEX) Emission Levels EPA Industry State regulators Research groups

17. Surface Considerations 16 Infrastructure Compressors Pipelines Roads Water treatment facilities Truck Traffic & Road Damage Drilling Locations Pit construction Erosion and sedimentation Chemical storage Surface Impact

18. Global Energy Security Forum Miami, Florida March 26, 2013 Mark K. Boling President HYDRAULIC FRACTURING OPERATIONS: SEPARATING FACT FROM FICTION