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Discovery DJ ServicesBoardwalk Pipeline Project, Phase II Design, Engineering & Construction March 2017

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DESIGN, ENGINEERING & CONSTRUCTIONI.  Project Overview & PlanningII.  PermittingIII.  Design & EngineeringIV.  Construction

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I. Project Overview & Planning!

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Discovery’s Boardwalk Pipeline Project Provides a safe, environmentally-friendly and efficient oil and gas transportation method that substantially decreases tanker truck traffic, emissions, noise and dust in Adams and Weld Counties, resulting in safer roadways and improvements to the environment.

Discovery’s Brings•  An experienced management team with a proven track record.

•  We have successfully completed projects across the U.S., including the construction and operation of thousands of miles of pipeline.

•  A culture of safety. Safety is not simply a #1 priority, it is embedded in the way we think and everything we do. As a result:

•  A zero-incident safety record.•  A zero-incident record with the EPA and OSHA.

•  Pipelines - the safest and most environmentally friendly way to transport oil and natural gas.

•  Reduced truck traffic, emissions, noise, and dust. •  Reductions in the size of many well pads.•  Quick land reclamation: we reclaim the land to its original state using native

plants & grasses.•  An understanding that our success is dependent on our relationship with the

community.

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Boardwalk Pipeline Project•  Co-located natural gas & crude oil gathering pipelines.•  We may install an additional, co-located water line. •  Crosses portions of Adams and Weld Counties.•  Phase I: Eastern portion

•  Unanimously approved by Adams and Weld County commissioners•  Under construction

•  Phase II: Western portion •  Surveying is almost complete •  We are in the process of securing right-of-way (ROW) easements•  Preparing to submit permit applications

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Traffic Reduction•  Pipelines substantially decrease tanker traffic, which increases safety and

reduces emissions, noise and dust.•  It is estimated that in Colorado pipelines reduce truck trips by more than 90%

over the life of a well. •  Pipelines are the safest form of oil and gas transport.

Land Reclamation•  We reclaim our right of ways as rapidly as possible.•  We take pride in working closely with landowners to restore land to its

original state or better using native plants and grasses.

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How We Plan a Pipeline Project•  We identify multiple route options with a focus on mitigating the impact

on the environment, local residents, and local businesses.•  We collect data and conduct field surveys that examine:

•  Local plants and trees•  Threatened and endangered species•  Wetlands and water resources•  Cultural resources including historic sites•  Soil •  Location of existing pipelines and utility corridors

•  We select a preferred route and two optional routes using data, field surveys, and discussions with neighboring landowners, businesses, and regional oil and gas producers.

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II. Permitting !

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Permits are Required from Federal, State & Local Entities including: •  Army Corps of Engineers •  Colorado Department of Public Health & Environment•  Local Jurisdictions

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III. Design & Engineering !

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The Boardwalk Pipeline Project is Designed & Engineered for Safety•  Although not required, we design our oil and gas pipelines to meet and exceed

the Code of Federal Regulations (CFR) to enhance safety:•  CFR Title 49, Part 192 for gas pipelines •  CFR Title 49, Part 195 for oil pipelines

•  Discovery meets or exceeds industry best practices and safety standards. We voluntarily adhere to federal design codes and industry accepted best practices and standards including:

•  American Society for Mechanical Engineers (ASME)•  American Petroleum Institute (API)•  American Society for Testing & Materials (ASTM)•  American National Standards Institute (ANSI)•  Pipeline & Hazardous Materials Safety Administration (PHMSA)

•  We bury our pipelines a minimum of four feet instead of the required three feet.

•  At road crossings, we bury our pipelines at least five feet instead of the three feet required by Adams County.

•  Our oil and gas pipelines are all-steel and made in the USA.

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The Boardwalk Pipeline Project is Designed & Engineered to be Reliable•  Our pipelines are designed with strategically placed block valves to facilitate

isolation of the system if needed.•  All of our pipeline have leak detection systems and are locally monitored 24 hours a day, 365 days a year.•  All of our oil and gas pipelines are designed to accommodate routine internal

cleaning and internal and external inspections using special tools.•  Our all-steel pipelines are designed with an external, fusion-bond epoxy

coating.•  We use an additional abrasive-resistant coating at all crossings. •  We use an added level of external corrosion protection in areas where our

pipelines parallel high voltage, overhead power lines.•  We use cathodic protection to prevent corrosion.

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IV. Construction !

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The Right Team•  Discovery currently has two offices in Brighton and a strong preference for local

hiring (~ 90% local hires to date).•  Discovery has a very rigorous contractor qualification process. •  Discovery only hires experienced, responsible contractors that adhere to the

highest safety standards and have a demonstrated track record of performance and safety.

•  All construction activities are performed by experienced contractors.

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Typical Pipeline Construction Process

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Quality Control•  Discovery uses a respected and highly qualified team of quality control

inspectors.•  Inspectors oversee and monitor construction. •  This ensures that construction takes places in accordance with project design,

written construction specifications, and all federal, state, and local requirements.

Welding & Weld Testing•  All welding is performed by qualified welders to API standards.•  We test 100% of our welds using certified technicians and best practices.

Coating Inspection & As-Built Survey•  All external pipe coating is visually inspected and tested. •  We record pipeline location, depth, and every weld using GPS technology.•  Qualified surveyors perform this work in accordance with industry standards

and written procedures.

Hydrostatic Testing•  Oil and gas pipelines are hydrotested to 1.5 times the maximum design

pressure (tested to 2,160 psig using water).•  Each hydrostatic test is held, monitored and documented for a minimum of eight

hours.

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Right of Way Restoration & Maintenance•  Discovery prioritizes open communications with landowners, local residents,

community businesses, and local governments.•  Our goal is to ensure that all areas impacted by construction are restored and

well-maintained.•  All rights-of-way and temporary work areas are restored as rapidly as possible.•  We work closely with landowners to restore rights-of-way to their original

condition or better using native plants, trees, and grasses.•  Discovery closely monitors all right-of-ways until they have been fully restored

according to permit terms and landowner agreements.•  Following restoration, our operations team continually monitors and maintains

our right-of-ways.