1. Moving Beyond Misinformation: Education and Engagement

2. The Process

3. Misperception: Hydraulic Fracturing is Injecting Fluids into Groundwater

4. Drilling Distance Wells Fargo Center ~700 ft 7000 ft. Aquifer 400-800 ft.

5. Casing  Multiple layers surrounding the aquifer  Cement  Conductor Casing  Cement  Surface Casing  Drilling Mud/Cement  Production Casing  Production Tubing

6. Surface Casing  Purpose Protect ground water Provide stable wellbore during drilling operation Provide well control during drilling  Depth Requirements Set by State and BLM regulations Extends below the aquifer  Cement Helps Protect casing from corrosion Provide zonal isolation Support casing in wellbore

7. Production Casing  Purpose Provide zonal isolation Provide well control Well path to productive intervals  Cement Requirements Set by State regulations Set by BLM regulations Operator requirements  Cement Helps Protect casing from corrosion Support casing in wellbore

8. Misperception: Hydraulic Fracturing is Not Engineered

9. Fracture Design  Data Required  Petrophysics/Formation properties  k, Φ, ν, E, σ, Pp, BHT  Fluid properties  Multitude of fluid types  n’, K’, μ, break profile, Pf,  Proppant properties  Variety of proppant types  β, sg, size, CD Predict-K 3.0

10. Pump Schedule  A pump schedule is required for the simulator to determine the predicted fracture geometry Fluid and proppant volumes Treatment rate Additive rates Frac Job

11. Treatment Graph Frac Job

12. Misperception: Drilling is Getting Riskier

13. Fractured Contact

14. Footprint 1 Well Pad or 32?

15. Misperception: Drilling and Hydraulic Fracturing Uses Too Much Water

16. Colorado Water Use Total (Million gallons/Day)Total (Billion gallons/Year) Irrigation (crop)12,3224497 Irrigation (golf course)4114 Public-supply864315 Domestic3412 Industrial14252 Livestock3312 Mining218 Thermo-electric12345 Total withdrawals13,5814957 Source: USGS 2005 Estimated Withdrawals and Use of Water in Colorado, 2005

17. Horizontal Well Activity  2011  517 Horizontal wells permitted  2009-2011  220 Horizontal wells spud  Example:  1,000 wells x 5M gal = 5B gal  0.11% of Colorado annual irrigation water use  0.10% of Colorado annual water use

18. Estimate All Well Activity  2010  2098 wells completed  2011 Estimate Water Use  1000 horizontal wells (5M gal)  1500 vertical wells (1M gal)  Conservative Estimate:  0.14% of Colorado annual irrigation water use  0.13% of Colorado annual water use

19. Water Requirements  Natural gas has one of the lowest water usage rates per MMBTU

20. Misperception: There is No Data Showing Groundwater is Protected

21. COGCC  Groundwater complaints  Hundreds of complaints  No verified instances of hydraulic fracturing harming groundwater in Colorado  Water sampling  Since 2000, baseline and periodic water sampling for over 2,000 water wells in the San Juan Basin  Independently verified; no significant increase in chemical concentrations

22. Meaningful Engagement and Education

23. FracFocus Website 23 http://fracfocus.brocodev.com/hydraulic-fracturing-process http://fracfocus.brocodev.com/

24. HF Disclosure Example

25. Baseline Water Sampling  Pre and Post-drilling water samples taken around new well starts  Increased transparency & accountability for industry

26. COGA Fast Facts

27. Resources  Hydraulic Fracturing Fact Sheet  COGCC Gasland Correction Document  COGA’s The Truth About Gasland  Other Fact Sheets Natural Gas Facts Socioeconomic Benefits Produced Water Natural Gas Supply www.coga.org

28. Questions? Thank you for your interest in Colorado’s oil and gas industry! www.coga.org