JKLM Reese Hollow 118 2HU Gas Well Release Potter County Natural Gas Resource Center Coudersport, PA December 17, 2015

Introduction DEP Representatives Marcus Kohl – Regional Director, Northcentral Regional Office Daniel Spadoni – Community Relations Coordinator, NCRO Jennifer Means – Program Manager, Eastern Oil and Gas District Dave Engle – Environmental Group Manager, Eastern O & G District Mike Panettieri – Oil and Gas Inspector Supervisor, Eastern O & G District Bill Kosmer – Professional Geologist, Eastern O & G District John Hamilton – Program Manager, Safe Drinking Water Program, NCRO Randy Farmerie – Professional Geologist Manager, Environmental Cleanup Program, NCRO

Site Location:

Timeline of Events September 14 - JKLM began drilling the surface hole of the Reese Hollow 118 2HU Gas Well Friday September 18, 2015 first report of “soapy water” in home well received and water sample collected by JKLM Additional reports of impacts to home wells over the following week Monday September 21 –additional home wells sampled by DEP and Penn E&R (JKLM’s environmental consultant) September 22 – Public water supply wells sampled

Timeline of Events, Cont. September 22 – Notice of Legal Presumption to JKLM for 2 private water supplies 58 Pa.C.S. §3218(c)(2): Unconventional operator is presumed responsible for pollution of a water supply: If the water supply is within 2500’ of vertical well bore, and If the pollution occurs within 12 months of certain activities (drilling, stimulation, etc.)

Timeline of Events, Cont. September 23 – JKLM meeting with public water suppliers and Potter Co EMA Use of public water supplies in area stopped as a precaution September 26 –report that pond along Route 6 had been impacted

Timeline of Events, Cont. September 30 – NOV issued to JKLM for release Violations of Oil and Gas regulations: Failure to prevent pollution of fresh groundwater; Drilling through fresh groundwater with a substance other than air, freshwater or freshwater based drilling fluids; and Violations of the PA Clean Streams Law: Unpermitted discharge of a polluting substance: Violations of Pennsylvania’s Clean Streams Law

Timeline of Events, Cont. October – November – Investigation continues with additional monitoring of water supplies October 27 – Presumptive Determination letters sent to 2 water supply owners Late October-early November - 4 Monitoring wells installed on the well pad and sampled November 18 – Plugging of the Reese Hollow 118 2HU gas well completed

Timeline of Events, Cont. November 19 – JKLM initiated post-plug sampling of water supplies and monitoring wells December 14 - Determination letters sent to 4 additional property owners regarding impacts to water supplies

Investigation What was released Sampling of existing locations Home wells Public water supply wells Surface water Monitoring wells

Products used on well pad Surfactant Isopropanol based soap/foam booster Rock Oil Used to assist drilling, multiple different products may have been used Not authorized products for top hole use Is the last bullet a correct statement

Sampling DEP sampled for: MBAS – indicator of soap Isopropanol 65 Volatile organic compounds and 68 semivolatile organic compounds precise makeup of rock oil not initially known, to be conservative tested for wide range of organic contaminants this is a longer list of constituents than the drinking water list 23 Metals and General Chemistry parameters – brine constituents Methane, ethane and propane

Environmental Sampling Over 100 groundwater wells and springs sampled 9 stream and pond sampling locations Over 500 water samples collected to date between JKLM and DEP

Private Water Supplies Initial results found chemicals related to release in home wells Isopropanol Acetone – associated with surfactant and its degradation BTEX (petroleum related) MBAS increased turbidity Alternative water supplies provided to impacted residents No groundwater sampling results from home wells currently exceed the primary drinking water standards for constituents related to the release Some of the impacted wells still have slightly elevated turbidity The impacted wells will continue to be monitored for any recurrence of the contamination

Private Water Supply Complaints 14 complaints received by DEP 6 positive impact determinations at this time One non-impact determination Seven currently still being evaluated, no determination made at this time

Public Water Supplies Pumps turned off as a precautionary measure to not spread plume No evidence of impact to Public Water Supplies as a result of release Prior to making a determination on restarting the Public Water Supply wells, a 72-hour well purge will be conducted, followed by split sampling

Surface Water Sampling Results 8 sample points established along streams and sampled weekly 9 springs and 1 pond sampled Results 1 spring and pond showed an initial impact No current impacts observed

Monitoring Wells 4 monitoring wells installed on the well pad in late October and early November Constructed to mimic home well construction Packer tests performed to look at specific intervals within wells Geophysical well logging completed of monitoring wells and gas well Sampled before and after abandonment of gas well Transducer also put in monitoring wells and nearby home wells to look for changes in groundwater elevation during gas well abandonment

Monitoring Well Results Geophysics indicated wells intercepted fracture zones Results of sampling 2 rounds completed Low levels of MBAS, petroleum constituents (BTEX), tert-butyl alcohol and phthalates(plasticizer) found in samples. Additional monitoring well locations being evaluated

Gas Well Plugging and Abandonment October 21st Notice of Intent to Plug a Well form submitted to DEP November 17th Cleaned out well bore from 0 to 684’ (attainable bottom at 684’) Set bottom cement plug from 634’ – 684’ November 18th Wait on bottom plug cement to set Placed gravel from 374’ – 634’ November 19th Placed gravel from 259’ – 374’ Placed sand filter from 190’ – 259’ Set top cement plug from 0 – 190’ Weld plate/monument on top of casing Plugging Certificate due December 19th

Ongoing activities Samples from 15 groundwater locations and 8 surface water locations collected on a weekly basis, includes public water supply wells and impacted home wells Hydrogeologic evaluation and sampling of monitoring wells on-going Department enforcement action still being developed

Planned Future Activities Permanently restore/replace impacted water supplies Resume operation of public water supply wells at request of water system operators after satisfactory testing results received A report will be submitted summarizing all activities once investigation is complete

Contact Dan Spadoni Community Relations Coordinator Department of Environmental Protection Northcentral Regional Office 208 West Third Street Suite 101 Williamsport, PA 17701 570.327.3659 dspadoni@pa.gov