Slickwater vs. Crosslink Gels: Identifying Which Frac Fluid Works Better with Produced Water (A Recycling Case Study)

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Slickwater vs. Crosslink Gels: Identifying Which Frac Fluid Works Better with Produced Water (A Recycling Case Study)

Hawaii Louisiana Alabama Mississippi Alaska Florida Tennessee Georgia North Carolina Arkansas South Carolina Connecticut Kentucky Delaware Massachusetts New Jersey Rhode Island West Virginia Maryland Virginia New Hampshire Maine Pennsylvania Indiana Missouri New York Vermont Illinois Ohio Washington Oklahoma Iowa Michigan Wisconsin Oregon Kansas Texas Minnesota California Nebraska Nevada Idaho South Dakota North Dakota Colorado Montana Arizona New Mexico Wyoming Utah AVERAGE ANNUAL PRECIPITATION 0 20 40 60 80 100 120 55% of wells drilled 3Q13 TEXAS NORTH DAKOTA COLORADO 2

freshwater constraints + disposal constraints = need to recycle 3

Slickwater vs. Crosslink Gels Slickwater Friction Reducer can be effected Friction reducer can be adjusted on the fly Little sensitivity to blend rate Fluid consistency not an issue No Boron concerns Crosslink Gels Gel Compatibility is an issue Difficult to adjust gel on the fly High sensitivity to blend rate Fluid consistency is an issue Boron is a concern 4

Permian Basin 70% Slickwater Recycle Rate % Recycled Fluid per Well All Permian Basin 60% 50% 40% 30% 20% 10% 0% 10/08/12 09/08/12 08/09/12 07/10/12 06/10/12 05/11/12 04/11/12 03/12/12 02/11/12 01/12/12 12/13/11 11/13/11 10/14/11

% of Recycled FR Concentration, % in mass Permian Basin Slickwater: FR vs. Recycle Rate 70% 0.035 60% 50% % of Recycled FR Concentration 0.030 0.025 40% 0.020 30% 0.015 20% 0.010 10% 0.005 0% 0.000 12/23/2011 4/1/2012 7/10/2012 10/18/2012 1/26/2013 5/6/2013 8/14/2013 Fracturing Date

Friction Reducer Concentration, % in mass Permian Basin Slickwater: HZO vs. Biocide vs. Chlorine Dioxide 0.040 0.035 0.030 Hydrozonix Biocide ClO2 0.025 0.020 0.015 0.010 0.005 0.000 2012/10/18 2012/12/7 2013/1/26 2013/3/17 2013/5/6 2013/6/25 2013/8/14 2013/10/3 2013/11/22 Fracturing Date Water Treatment Technology # of Wells FR Concentration, % in mass Biocide 22 0.0123 ClO 2 9 0.0146 Hydrozonix 27 0.0042

Cross-linked gel fluids 8

Cross-linked gel fluids Gel Compatibility can be maintained over narrow range. TSS, TDS, Chlorides and Boron are all issues. Once Gel recipe is developed water quality must remain in a narrow range to maintain gel compatibility Control of water quality is paramount 9

Need for Fluid QA/QC on X-linked Gel Fracs Pre-frac circulation, pretest water, define blend Blend to correct ratios Monitor water quality real time Synchronize water transfer with pumping company 10

Pre-Frac TESTING Blended Water Gel Compatibility Test Water Source- Freshwater and Produced Chloride Boron TDS 11

Pre-Frac TESTING Gel frac recycle and control system Consistent Water Quality Calibrate Pumps- Fresh & Produced Baseline TDS, Chlorides and Boron Chloride concentration optimized for clay stabilization 12

Pre-Frac TESTING Gel frac recycle and control system Pre-frac circulation Agitate water Collect samples Engineer chemistry to match the fluid 13

Bacteria Count / ml Why circulate? 30000 25000 20000 Bacteria levels DOUBLE GHB SRB APB 15000 10000 5000 0 Before Circulation After Circulation After Treatment 14

Circulation Options 15

X-FRaC SYSTEM Gel frac recycle and control system Real-time measurement Total dissolved solids Chloride Boron General Water Quality 16

X-FRaC SYSTEM Gel frac recycle and control system Pump control Control pump RPMs Control blend ratios Adjust blends on-the-fly 17

Case study Permian Basin 130,000 bbl frac 75% freshwater 25% produced fluid Results Volumetric ratios Boron Chloride 18

Volumetric ratios 100% 90% 80% 70% Produced Water Fresh Water 60% 50% 40% 30% 20% 10% 0% Pre* 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Stage Number 19

Boron levels Boron, mg/l 140 120 100 80 60 40 20 Produced Water Treated Water 0 Pre* 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Stage Number 20

Potassium chloride (KCl) equivalency KCl equivalency 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Pre 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Stage Number 21

Gel Concentration, % in mass Gel Concentration vs. Recycle Rate 0.45 0.40 0.35 0.30 Frac Crew #1 Frac Crew #2 w/ Biocide Frac Crew #2 w/ Hydrozonix 0.25 0.20 0.15 0.10 0.05 0.00 9/14/2011 12/23/2011 4/1/2012 7/10/2012 10/18/2012 1/26/2013 5/6/2013 8/14/2013 11/22/2013 3/2/2014 Fracturing Date Frac Service # of wells Gel Concentration, % in mass Gel to Proppant Ratio Frac Crew #1 12 0.223 0.017 : 1 Frac Crew #2 w/ Biocide 14 0.204 0.029 : 1 Frac Crew # 2 w/ Hydrozonix 11 0.197 0.026 : 1 22

Hydrozonix EF80 Versatile bacteria treatment On-the-fly treatment onsite No negative impact on chemical compatibility 23

Questions?