Hydraulic Fracturing 101

Shale Gas ExtractionApril 12, 20121

The Utica and Marcellus PlaysUtica and Marcellus Shale are in the Appalachian Basin2

Currently ~14,000 active gas wells in NY State2Relative & Approximate Depth

3

3Drilling 4

Not inconsequential effort 6 acre pad is typical. Drill cuttings, water storage ponds, etc.4Typical Gas Well X-SectionMultiple Layers ofSteel Casing and Cement Grout

5

5Vertical & Horizontal DrillingWell typically drilled vertically to 500 above Marcellus Shale

Curve from vertical to horizontal approximately 1,200 linear feet

Continues horizontally for several thousand feet

Final casing string cemented in place at end of well bore

Approximately 15 to 30 days required to drill a horizontal Marcellus well

6

Example illustrates 7,000 depth to shale (Typical for Pennsylvania)6Multiple Wells from a Single Pad

7

Line = 1,000 feetHydraulic FracturingIntensive 24-hour operation, typically taking place over several days to stimulate the entire horizontal wellbore.

High-volume fracturing used for horizontal well development

Process begins by perforating casing, cement and shale with perforating gun

Charge from gun opens fissures in shale to release natural gas, sand necessary to expand and prop open fissures

Water & additives injected under high pressure to carry sand into fractures8

Hydraulic FracturingPerforate the well casing & grout in sections

Pressure & Volume highly dependent upon local geology

Proppant (typically sand) keeps the fractures open

9

Hydraulic Fracturing> 1.2 Million wells hydraulically fractured in the US since 1949

Typical Fracture Fluid~ 99.5% Water & SandRemaining ~0.5%SurfactantGelling AgentFriction ReducersAcidBiocide & Others500,0000 to 4.0M gallons water/Marcellus well

20% 30% returns as Flow-back water within a few days; produced water follows

Recycling or T&D

Pennsylvania AMD Re-use??

10

Water Consumption115,9301,6801,5502686,000

5,000

4,000

3,000

2,000

1,000

0

Power generationIndustrialPublic Water systemsOtherMiningMarcellus Shale Drilling18260Millions of Gallons per Day