GOVERNOR’S SMALL BUSINESS FORUM APACHE CORP. JUNE 4, 2014.

GOVERNOR’S SMALL BUSINESS FORUM

APACHE CORP. JUNE 4, 2014

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DRILLING PERMIT APPLICATIONS – BURLESON CO.

http://www.texas-drilling.com/burleson-county

Note – the size of each dot is about 600 times larger than an actual well site on this map scale.

• Single Barrier Failure => No Leak Path? => No Well Integrity Failure• Unless All Barriers Fail, A Leak Will Not Happen

Barrier Failure or Well Integrity Failure

Wells are Designed with Multiple Barriers.Number of Barriers Depends on the Hazard Level.

ZONE Hazard to Ground Water If Well Integrity Is Lost

Typical Number of Barriers

Above Surface

Low 1 to 2

Fresh Water

Low to Moderate 2 to 4

Mid Depth Very Low 1 to 2

Deep Lowest 1

HYDRAULIC FRACTURING

What is it? Hydraulic fracturing involves injection of water. sand, polymer

(an adsorbent in diapers and a drinking water purifier) and a small amount (+/- 100 ppm) of a biodegradable biocide into a well to create a fracture in oil and gas bearing rock or to reopen natural fractures that are already there.

Well depths for this operation may vary from 4000 ft to over 10,000 ft. (separation of over ½ mile to nearly two miles) - typical frac height is less than 300 ft (top to bottom)

Water tables in these areas are shallower than 1000 ft.

The main biocide we use has been approved for well use in the North Sea – carries the Gold band (safest) rating.

HOW CLOSE DOES THE TOP OF A FRAC COME TO GROUND WATER?

COMMON FRAC CHEMICALSMost Common Slick Water Frac Additives

Composition CAS Number

Percentage of shale fracs that use this additive. (This in NOT concentration)

Alternate Use

Friction Reducer

Polyacrylamide 9003-05-8 Near 100% of all fracs use this additive

Adsorbent in baby diapers, flocculent in drinking water preparation

Biocide Glutaraldehyde 111-30-8 80% (decreasing) Medical disinfectant

Alternate Biocide

Ozone, Chlorine dioxide UV,

10028-15-6 10049-04-4

20% (increasing) Disinfectant in municipal water supplies

Scale Inhibitor Phosphonate & polymers

6419-19-8 and others

10 – 25% of all fracs use this additive

Detergents

Surfactant various various 10 to 25% of all fracs use this additive

Dish soaps, cleaners

MINING (COAL, OIL, GAS, MINERALS) WATER USAGE?

Source: Susan Combs, Texas Comptroller of Public Accounts: “The Impact of the 2011 Drought and Beyond”, February 6, 2012.

Note: this does not include the effects of water recycling from produced water back to frac water.

Water Use in In Perspective:1. Texas has over half fracture jobs

done each year in US – need 80 to 100 billion gallons of water total.

2. City of Houston loses 22 billion gallons per water per yr. in leaks.

3. Texas cities lose 200+ billion gallons per year in leaks.

4. Amount of water in TX to fracs less than 1.6% of total.

Questions

Basin or Area Typical Frac Volume Used (Gal.)

% Frac Water Recovered

Typical % of Recycled or Salt Water use –Operator dependent

Typical Chemical % in Frac

Chemical % in Flowback (Gross Est.)

Barnett (TX) 4 to 5 mm 30 to 50% 0.2% <0.05%

Devonian (PA) 4 to 5 mm 40 to 50% <40% to 100% 0.2% <0.1% (polymer)

Eagle Ford (TX) 4 to 5 mm 5 to 10% <30% to >50% 0.3 to 0.4% (Hybrid Frac)

<0.2% (polymer)

Fayetteville (AR) 3 to 4 mm 30 to 60% 0.2% <0.05%

Haynesville (LA) 4 to 6mm 5 to 15% 0.3% (Hybrid Frac) <0.1% (polymer)

Woodford (OK) 4 to 5 mm 30 to 50% ~20% to >50% 0.2% <0.05%

Permian Basin Oil Shales (TX)

2 to 3 mm ~40% ~40% to 100% 0.4% to 0.5%

Conventional Well (Not shale)

50,000 to 100,000

60% to 90%+ 1% ~0.5%

Estimates: Fracture Water Usage, Flow Back Volumes & Chemicals