1. UNSM Spring Workshop, Yarmouth, Nova Scotia Some More Facts about Hydraulic Fracturing May 9, 2013 Andrew Blackmer, M.Sc., P.Geo, Dillon Consulting Ltd.

2. Introduction Dillon Consulting Limited Dillon Consulting Limited – Founded in 1946, 650 employees, 17 offices – Operating in Nova Scotia since 1974 – Municipal Infrastructure, Permitting and Approvals, Environmental Science, Sustainable Design Andrew Blackmer, M.Sc., P.Geo. Andrew Blackmer, M.Sc., P.Geo. – Professional Geoscientist, Partner with Dillon – 30+ years - water supply, groundwater studies, environmental site assessments - public & private – More recent involvement with energy/power sector - oil and gas and renewables

3. Agenda Exploration vs Development Protection of Groundwater Water Management NS Context – Kennetcook Exploration Wells What is NORM?? More Information available

4. Explorationand Development Exploration and Development Exploration Exploration – steps taken to identify and prove a reserve – Mapping – Seismic Testing and analysis – Exploratory Drilling and Testing Development Development – production, storage and transfer – Drill pad construction – Multiple wells per pad – Well head completion, separation of oil, gas, water – Stabilize and transfer to point of sale

5. Protection of Groundwater Exploration and development is not sustainable without protection of potable groundwater Key Points – Well Construction – multiple sealed casings – Geological separation – Handling of materials at surface Growing body of research supporting protection of groundwater

6. Horizontal Well

7. Methane (NG) in Groundwater Methane can naturally occur near ground surface and in the water table Biologically created by bacteria (biogenic) Where oil and gas bearing formations are near ground surface (thermogenic) Consider baseline testing before development

8. Water Management Exploration Reintroduce flow-back water to formation or Treat and dispose Minimize footprint Limit trucking, flaring Development Recycle and re-use fracking and flow-back water on next well Minimize need for water disposal Minimize need for fresh make-up water Triangle operator in Bakken play in N. Dakota is at forefront of technology

9. Nova Scotia Context

10. Triangle Petroleum - Kennetcook Exploration Wells Part of five well exploration program in East Hants – under license with Department of Energy and approval of NSEnvironment KC 1 and KC 2 KC 1 and KC 2 – Drilled in late 2007 early 2008 – Vertical exploration wells (1330 m and 1900 m deep) – Lined holding pond for make up water – Water withdrawal permits from NSE (Kennetcook River) – ponds being used to store flow-back water – Testing completed – formation brine returned

11. Triangle Petroleum - Kennetcook Exploration Wells KC 1 and KC 2 KC 1 and KC 2 – Options for management – reinjection (viable based on chloride content), treatment and disposal – NSE - no permission for reinjection at this time – part of current review – Treatment and disposal option approved by NSE, supported by Triangle – NSE requested testing for NORM – further disposal on hold until NORM considered – Conservative standards set based on human ingestion pathway. – NORM treatment process tested and in place and approved by NSE pending OK from Municipality of Colchester County

12. Hydraulic Testing of KC 1 and KC 2 Water Sand Surfactant and Friction Reducer – (sophisticated detergents) - used to improve injection into the rock formation. Material identification provided to Province

13. What is NORM? Naturally Occurring Radioactive Materials – Potassium, Radium, Thorium, Lead NORMs are everywhere in small concentrations They happen to exist in the rock that is being explored The KC pond water has low concentrations At the request of NSE pond water is being treated to below the HC guideline that is derived for drinking water

14. Putting NORM into Context Banana – 15 Bq Kg of coffee – 1,000 Bq Average person – 4,500 Bq Smoke detector (radioactive source) – 30,000 Bq Litre of KC 1/KC 2 water – Average Total - 7.4 Bq (Radium 226 – 4.7 Bq) – Treated – Radium 226 – 3 Bq HC unconditional derived release limit (UDRL) – 5 Bq/L (Radium 226)

15. Summary Technology – Continues to advance Exploration phase in NS – long way to go to test the resource – a “proof of concept program” Exploration and development need to be protective of groundwater, environment and societal needs If feasible, the resource could have a significant impact on the Nova Scotia economy.

16. Triangle - Open for Dialogue Triangle Petroleum has provided a brief summary of additional information about onshore natural gas. Hardcopies are available here today.