1. © Copyright 2013 by K&L Gates LLP. All rights reserved. UNIVERSITY OF PITTSBURGH SCHOOL OF LAW 2013 ENERGY LAW & POLICY INSTITUTE Changing laws and best practices in shale gas development Michael G. Zanic – Energy, Infrastructure & Resources Practice Area Leader K&L Gates, Pittsburgh August 2, 2013 This presentation is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.

2. klgates.com Overview and Contents Development of Best Practices  Background/Context  Marcellus Shale Coalition (http://marcelluscoalition.org/category/library/recommened-practice/)  Det Norske Veritas (http://www.dnv.com)  Center for Sustainable Shale Development (http://www.sustainableshale.org/performance-standards/)

3. klgates.com Overview and Contents (cont.) Recent Oil & Gas Case Law (PA, OH, WV)  Robinson Township v. Commonwealth (PA: Act 13)  Butler v. Charles Power Estate (PA: Dunham Rule)  Humberston v. Chevron U.S.A. Inc. (PA: surface impoundments)  Caldwell v. Kriebel Resources Co., LLC (PA: lease obligations)  In re: Powell (PA: rejection of lease in bankruptcy)  Harrison v. Cabot Oil and Gas Corporation (PA: extension of lease term)  Schychuck v. Chesapeake Appalachia, LLC (PA: federal court jurisdiction)

4. klgates.com Overview and Contents (cont.)  Antolak v. Solid Rock Energy, Inc. (OH: federal court jurisdiction)  State ex. rel. Morrison v. Beck Energy Corp. (OH: Ohio preemption)  Bilbaran Farm, Inc. v. Bakerwell, Inc. (OH: implied covenants)  Martin v. Hamblet (WV: surface owner rights)  Stone v. Chesapeake Appalachia, LLC (WV: rule of capture)  Cain v. XTO Energy, Inc. (WV: pooling)

5. klgates.com Overview and Contents (cont.) Who Will Regulate Shale Development?  Feds v. States  Identification of key issues

6. klgates.com Overview and Contents (cont.) Pennsylvania Legislation  Oil and Gas Lease Act (eff. Sept. 9, 2013)  Future issues?  Act 13 fallout  Minimum Royalty Act  Water and wastewater impoundments  Wastewater injection wells  Severance tax and/or other related taxes (for general or specific purposes)  Enchanced chemical disclosure  Continued best practices regulation