Marcellus Fast Facts

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2 Marcellus Fast Facts Covers about 95,000 square miles in 6 states Occurs at depths of up to 9,000 feet Thickness of 250 feet or more Largest natural gas reservoir in North America (est. 500 TCF recoverable gas w/>1 TCF produced to date) Sufficient reserves to satisfy US demand for 20+ years Natural gas is the cleanest burning fossil fuel ~45% less CO2 emissions than coal and ~30% less than oil, Minimal SOx/NOx/particulates No mercury

3 Bakken

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5 Well Drilling Locations

6 Well Site in Operation

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8 Approved Consumptive Water Use in Susquehanna River Basin 8-10 mgd* PerFish SRBC Aug *Estimated based on recent SRBC/DEP data Source: Pa andpresentation, Boat Commission

9 Water Use Data in Susquehanna Basin Total water use: billion gallons on 553 wells (6/08 to 3/11) 562 mgal from public water supply (35%) 41 public sources permitted bgal from surface water sites (65%) >130 surface water sources permitted Average total volume of fluid used per well: 4.2 million gallons per well 3.8 million gallons of fresh water (90%) 0.4 million gallons of reused flowback (10%) 30-day avg. recovery of flowback: 8% Total amount of flowback: 117 million gallons (6/08 to 3/11) Reuse 75 million gallons Disposal 42 million gallons 64% flowback reuse

10 Water Supply Management Number of factors to consider: Access to water near the drilling project area (public vs. self supply) Transport to well site: piping vs. trucking Availability-seasonal or perennial Will pass-by flows be required? Water quality Permitting complexity Storage

11 Hydraulic Fracturing Process -Each well uses about 3 to 7 million gallons of water -Approximately 8-10% of the fluids return as flowback water Source: Chesapeake Energy

12 Flowback Water Quality Trends

13 Flowback Water Management Options Flowback management options Direct reuse (blending) On-site treatment w/reuse Off-site treatment w/reuse Off-site treatment and disposal Chemical precipitation, evaporation, filtration technologies being utilized Approximately two-thirds of flowback being recycled New treatment standards for new or expanding treatment facilities TDS-500 mg/l Chlorides-250 mg/l Barium and Strontium-10 mg/l Only 1 plant in PA meet standards 4 recycling plants with ~2.1 mgd capacity-3 have zero discharge

14 Typical Flowback Scaling Agent Concentrations Cation Barium: Strontium: Calcium: Magnesium: Manganese: Iron: Concentration 2,000-5,000 mg/l 1,000-7,000 mg/l 10,000-25,000 mg/l 500-1,000 mg/l 2-10 mg/l mg/l These concentrations need to be reduced to minimize the potential for downhole scaling and plugging.

15 Typical Treatment Scheme for Reuse Chemical precipitation can have >99% removal efficiency for potential scaling agents Can generate several tons of sludge per 100,000 gallons treated

16 Flowback Treatment Specifications Example industry flowback treatment levels for recycling purposes: Total cations in the <10 to <2,000 ppm range Acceptable levels range from company to company Primary focus on Ba and Sr, but Ca also a concern Ba, Sr, Fe, Mn, Mg < 10 ppm Ca <1,000 ppm Hardness <2,500 Processed water sulfates levels <30 ppm TSS <30 ppm TDS is variable, >50,000 ppm can be acceptable

17 Emerging Water Management Trends Use of alternative water sources Groundwater supply wells closer to drilling Municipal wastewater use (2 plants in permitting process) Acid mine drainage Flowback recycling Estimated three-fold increase in last 2 years Expected to increase as grandfathered facilities phased out On-site treatment technologies Evaporation Filtration Chemical precipitation Closed loop drilling and fluids storage Lined well pads to minimize releases Regulatory monitoring down stream from discharges Investigation of underground injection wells for disposal

18 Approximate location of permitted recycling facility

19 Your Contact in Germany Austria Switzerland Stefan Peikert Director Investment Germany Austria & Switzerland Commonwealth of Pennsylvania Office of International Business Development Department of Community & Economic Development Authorized Trade & Investment Representative AHP Group Berlin - Münster - Heidelberg - Leipzig Berlin +49 (0) Mobile +49 (0) Fax +49 (0) peikert@newpa.de / 19