Presented by Steve Henke, President New Mexico Oil & Gas Association What is Hydraulic Fracturing Long used form of well completion that along with horizontal drilling has been a game changer for natural gas development in the United States. Hydraulic fracturing is a process used in nine out of ten natural gas wells in the United States, where water, sand and chemicals are pumped underground to break apart the rock and release the gas or oil. Horizontal drilling combined with multi-stage hydraulic fracturing has brought the U.S. a 100-year supply of natural gas. Hydraulic fracturing and horizontal drilling make previously marginal reserves economically recoverable. Hydraulic Fracturing Job Water Sources Surface water Fresh water wells Municipal systems Reuse of flowback All from permitted sources Flowback and Disposition Options Temporary storage (tanks or lined pits) Treatment at production facilities Class II disposal wells Commercial disposal wells Municipal or commercial treatment plants All permitted/approved by appropriate regulatory agencies at the state level Fracturing Fluids Many different formulation depending on specifics of formation being completed Fluids create fissures Fissures kept open with propant (sand) Allow natural gas and oil to flow Regulation New Mexico Oil Conservation Division Well Design and Construction Hydraulic Fracturing Fluid Disclosure Disposal of Flowback Hydraulic Fracturing Fluid Product Component Information Disclosure Fracture Date State: County: API Number: Operator Name: Wall Name and Number: Longitude: Latitude: Long/Lat Projection: Production Type: True Vertical Depth (TVD): Total Water Volume (gal)*: 6/13/11 New Mexico Lea 30-025-32038 Devon Energy Corp Kachina 5 Fed #5 -103.69008 32.7709 NAD27 Oil 11,039 54,684 Hydraulic Fracturing Fluid Compostion: Trade Name Water Supplier Ingredients Chemical Maximum Maximum Comments Abstract Service Ingredient Ingredient Number (CAS #) Concentratio Concentratio n in Additive n in HF Fluid (% by (% by mass)** mass)** Carrier Water 7732-18-5 100.00% 90.09366% Frac Sand (All BHI Meshes) [CWT] Proppant Crystalline Silica (Quartz) 14808-60-7 100.00% 0.76740% Super LC BHI Proppant Silicon Dioxide (Silica Sand) Phenol Formaldehyde Resin Hexamethylenetetramine 14808-60-7 9003-35-4 1009-7-0 97.00% 5.00% 0.01% 2.26382% 0.11669% 0.00023% GBW-5 BHI Breaker Annoinium Persulfate 7727-54-0 100.00% 0.00396% X-Cide 207 BHI Biocide 5-Chloro-2-Methyl-4-Isothiazolin-3-One 2-Methyl-4-Isothiazolin-3-One Magnesium Nitrate Magnesium Chloride Diatomaceous Earth, Calcined Crystalline Silica: Cristobalite Crystalline Silica: Quartz (SiO2) 26172-55-4 2682-20-4 10377-60-3 7786-30-3 91053-39-3 14464-46-1 14808-60-7 10.00% 5.00% 10.00% 5.00% 60.00% 1.00% 1.00% 0.00083% 0.00042% 0.00083% 0.00042% 0.00498% 0.00008% 0.00008% Hydrochloric Acid, 10.1 15% BHI Acidizing Hydrochloric Acid 76-01-0 15.00% 0.86065% Water 7732-18-5 85.00% 4.87703% Enzyme G-I BHI Breaker Hemicellulase Enzyme Concentrate Water 9025-56-3 7732-18-5 3.00% 97.00% 0.00312% 0.10080% GW-4LDF BHI Gellant Petroleum Distillates Blend Guar Gum CBI 9000-30-3 70.00% 40.00% 0.42089% 0.24051% XLW-4 BHI Crosslinker Sodium Borate Decahydrate 1303096-4 30.00% 0.00783% High Perm CRB BHI Breaker Ammonium Persulphate 7727-54-0 100.00% 0.00396% Crystalline Silica Quartz 14808-60-7 15.00% 0.00059% Non-emulisifier Isopropanol 67-63-0 100.00% 0.01513% Iron Control Thioglycol 60-24-2 100.00% 0.01693% Cupric Chloride Dihydrate 10125-13-0 100.00% 0.01693% NE-23 Operator Purpose BHI Ferrotrol 280L BHI Inflo 250W BHI Surfactant Surfactants 2-Butoxyethanol Methanol CBI 111-76-2 67-56-1 80.00% 20.00% 30.00% 0.03008% 0.00752% 0.01128% ClayCare BHI Clay Control Choline Chloride Water 67-48-1 7732-18-5 75.00% 30.00% 0.05849% 0.02340% NE-9000 BHI Non-emulsifier Methanol Nonyl Phenyl Polyethylene Glycol Ether 67-56-1 9016-45-9 30.00% 10.00% 0.02216% 0.00739% Acigel BHI Gellant - Acid Ethylene Glycol 107-21-1 10.00% 0.00051% BF-9L BHI Buffer Potassium Hydroxide 13-58-3 15.00% 0.01065% CI-14 BHI Corrosion Inhibitor Methanol Propargyl Alcohol Polyoxyalkylenes Fatty Acids Oefin 67-56-1 107-19-7 CBI CBI CBI 100.00% 5.00% 30.00% 10.00% 5.00% 0.00718% 0.00036% 0.00215% 0.00072% 0.00036% * Total Water Volume sources may include fresh water, produced water, and/or recycled water ** Information is based on the maximum potential for concentration and thus the total may be over 100% All component information listed was obtained from the supplier's Material Safety Data Sheet (MSDS). As such, the Operator is not responsible for innacurate and/or incomplete information. Any question regarding the content of the MSDS should be directed to the supplier who provided it. The Occupational Safety and Health Administration's (OSHA) regulation govern the criteria for the disclosure of this information. Please bite that Federal Law protects "proprietary", "trade secret", and "confidential business information" and the criteria for how this information is reported on an MSDS is subject to 29 CFR 1910.1200(i) and Appendix D. Hydraulic Fracturing Fluid Product Component Information Disclosure Fracture Date State: County: API Number: Operator Name: Wall Name and Number: Longitude: Latitude: Long/Lat Projection: Production Type: True Vertical Depth (TVD): Total Water Volume (gal)*: 6/13/11 New Mexico Lea 30-025-32038 Devon Energy Corp Kachina 5 Fed #5 -103.69008 32.7709 NAD27 Oil 11,039 54,684 Trade Name Water Supplier Operator Purpose Ingredients Chemical Maximum Maximum Abstract Service Ingredient Ingredient Number (CAS #) Concentration Concentration in Additive in HF Fluid (% by mass)** (% by mass)** Carrier Water 7732-18-5 100.00% 90.09366% Frac Sand (All BHI Meshes) [CWT] Proppant Crystalline Silica (Quartz) 14808-60-7 100.00% 0.76740% Super LC BHI Proppant Silicon Dioxide (Silica Sand) Phenol Formaldehyde Resin Hexamethylenetetramine 14808-60-7 9003-35-4 1009-7-0 97.00% 5.00% 0.01% 2.26382% 0.11669% 0.00023% GBW-5 BHI Breaker Annoinium Persulfate 7727-54-0 100.00% 0.00396% Comments Trade Name Supplier Purpose Ingredients Chemical Maximum Maximum Comments Abstract Service Ingredient Ingredient Number (CAS #) Concentration Concentration in Additive in HF Fluid (% by mass)** (% by mass)** X-Cide 207 BHI Biocide 5-Chloro-2-Methyl-4-Isothiazolin-3-One 2-Methyl-4-Isothiazolin-3-One Magnesium Nitrate Magnesium Chloride Diatomaceous Earth, Calcined Crystalline Silica: Cristobalite Crystalline Silica: Quartz (SiO2) 26172-55-4 2682-20-4 10377-60-3 7786-30-3 91053-39-3 14464-46-1 14808-60-7 10.00% 5.00% 10.00% 5.00% 60.00% 1.00% 1.00% 0.00083% 0.00042% 0.00083% 0.00042% 0.00498% 0.00008% 0.00008% Hydrochloric Acid, 10.1 15% BHI Acidizing Hydrochloric Acid 76-01-0 15.00% 0.86065% Water 7732-18-5 85.00% 4.87703% Enzyme G-I BHI Breaker Hemicellulase Enzyme Concentrate Water 9025-56-3 7732-18-5 3.00% 97.00% 0.00312% 0.10080% GW-4LDF BHI Gellant Petroleum Distillates Blend Guar Gum CBI 9000-30-3 70.00% 40.00% 0.42089% 0.24051% XLW-4 BHI Crosslinker Sodium Borate Decahydrate 1303096-4 30.00% 0.00783% High Perm CRB BHI Breaker Ammonium Persulphate 7727-54-0 100.00% 0.00396% Crystalline Silica Quartz 14808-60-7 15.00% 0.00059% Isopropanol 67-63-0 100.00% 0.01513% NE-23 BHI Non-emulisifier CBI: Confidential Business Information Trade Name Supplier Purpose Ingredients Chemical Maximum Maximum Comments Abstract Service Ingredient Ingredient Number (CAS #) Concentration Concentration in Additive in HF Fluid (% by mass)** (% by mass)** Ferrotrol 280L BHI Iron Control Thioglycol Cupric Chloride Dihydrate 60-24-2 10125-13-0 100.00% 100.00% 0.01693% 0.01693% Inflo 250W BHI Surfactant Surfactants 2-Butoxyethanol Methanol CBI 111-76-2 67-56-1 80.00% 20.00% 30.00% 0.03008% 0.00752% 0.01128% ClayCare BHI Clay Control Choline Chloride Water 67-48-1 7732-18-5 75.00% 30.00% 0.05849% 0.02340% NE-9000 BHI Non-emulsifier Methanol Nonyl Phenyl Polyethylene Glycol Ether 67-56-1 9016-45-9 30.00% 10.00% 0.02216% 0.00739% Acigel BHI Gellant - Acid Ethylene Glycol 107-21-1 10.00% 0.00051% BF-9L BHI Buffer Potassium Hydroxide 13-58-3 15.00% 0.01065% CI-14 BHI Corrosion Inhibitor Methanol Propargyl Alcohol Polyoxyalkylenes Fatty Acids Oefin 67-56-1 107-19-7 CBI CBI CBI 100.00% 5.00% 30.00% 10.00% 5.00% 0.00718% 0.00036% 0.00215% 0.00072% 0.00036% Trade Secrets 29 CFR 1910.1200 allows for trade secret protection of certain hydraulic fracturing fluid components New Mexico’s Experience San Juan and Permian Basins – Unlocking New Resources Completed Wells Gas 28,456 Oil 24,208 Water Saving Technologies in San Juan No evidence linking hydraulic fracturing to ground water contamination What is appropriate risk management?