Global Gas Shale and Unconventional Gas:

Unlocking Your Potential

Gas Technology InstituteFebruary, 2010

22

Unconventional Gas is . . .

“…a revolution”- WSJ and New York Times

“…a game changer”- United Press International

“…the biggest energy innovation of the decade”

- Wall Street Journal

“…a paradigm shift”- Energy Tribune

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The White House

“The potential for natural gas production in the U.S. from hydrocarbon-rich shale formations, known as “shale gas,” has grown dramatically in recent years due to technological advances.

The development of shale gas is expected to significantly increase U.S. energy security and help reduce greenhouse gas pollution.

The United States is not alone in having significant shale gas resources.”

- President Barack ObamaStatement on U.S.-China shale gas resource initiative17 November 2009

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What is all the hype about?

Unconventional Gas

55

Agenda

> Introductions and objectives

> GTI overview

> Global Gas Shales and Unconventional Gas

> What abundant natural gas makes possible

> What do you see as possible?

> Global Unconventional Gas 2010

66

Objectives

> Awareness of GTI

> Inform you of how unconventional natural gas has transformed America's energy outlook.

> Enable you to consider what’s possible for your countries.

> Enroll your support in making appropriate connections in your countries.

Overview of GTI

88

GTI solves important energy challenges, turning raw technology into practical solutions that create exceptional value for our customers in the global marketplace

Energy Solutions… Delivered

99

> Not-for-profit research, with 65+ year history

> Facilities ─ 18 acre campus near

Chicago─ 300,000 ft2,

28 specialized labs ─ $140 M installed R&D

and testing capacity

> $60 MM Revenue

> Staff of 250 > 1000 patents; 500

products> 13 spin-out companies

Energy & Environmental Technology Center

Flex-Fuel Test

FacilityOffices & Labs

Our Company at a Glance…

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LocationsHeadquarters

Des Plaines, IL(Chicago suburb)

GTI/Catoosa Drilling Test Facility

Catoosa, OK

Regional OfficeHouston, TX

California Project Development

SpecialistFolsom, CA

Process Research and Evaluation GroupBirmingham, AL

Washington OperationsWashington, DC

NGA Strategic Acct Executive

Needham, MA

11

Reducing carbon emissions to the environment

12

How GTI Works with Customers

Example: Creating synthesis gas from coal

Example: Reducing water demand from production activities

Example: Enhancing the competitiveness of industry

Example: Managing unconventional natural gas research program under RPSEA

Proprietary R&D

Industry Partnerships

Collaborative Programs

Government-Funded Initiatives

13

A Diverse Customer Mix

2008 New Business Awards

Global Gas Shales and Unconventional Gas

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Why Natural Gas?

• Secure• Abundant• Domestic• Clean• Versatile

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What is Unconventional Gas?

Unconventional gas is four natural gas sources:

• Tight gas sands• Coalbed methane (CBM) • Gas shales• Methane hydrates

1717

What is Unconventional Gas?

Conventional gas = harder to find, easier to produce.Unconventional gas = easier to find, harder to produce.

• Requires some type of stimulation (e.g., hydraulic fracturing) for economic production.

1818

Technology Enabled by GTI

> GTI’s Coal bed Methane Research Program (1982)

> Parallel research programs in Tight Sands and Gas Shales.

1919

Technology Enabled by GTI

> Hydraulic Fracturing• Microseismic

imaging• Hydraulic fracture

modeling software

> Horizontal Drilling

2020

A World of Abundant Supply

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A World of Abundant Supply

Source: Rogner’s 1997 “top-down” study of world hydrocarbon resources

2222

A World of Abundant Supply

Business Confidential 7Business Confidential 7

0

500

1000

1500

2000

2500

1960 1970 1980 1990 2000 2010

PGC

USGS

Mobil

Hubbert

Exxon

Hefner

Shell

Nehring

DOI

DOE

Enron

GTI

AAPG

NRC

EIA

NPC

Smith & Lindsky

Navigant

2008 Data point

Tcf

New Records!

U.S. Technically Recoverable Gas (Tcf)

2323

A World of Abundant Supply

European Gas Shales:Vienna Basin – Mikulov Shale

The deep Jurassic Mikulov Shale in the Vienna Basin:

• The University of Vienna has a study, funded by OMV, to characterize these shales.

• Preliminary estimate for the unrisked resource endowment is 240 Tcf (7 Tcm)

• with a risked recoverable resource of 30 Tcf (1 Tcm).

Source: Vello A. Kuuskraa and Scott H. Stevens, Advanced Resources International. WORLDWIDE GAS SHALES AND UNCONVENTIONAL GAS: A STATUS REPORT

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A World of Abundant Supply

China and India

China and India have numerous gas shale basins that are only now starting to be evaluated. Recently, Shell and PetroChina announced plans to jointly evaluate and develop the gas shales in Sichuan Province.

Other Countries

Gas shale exploration is underway in many other parts of the world, including Australia, New Zealand and Southern Africa where Statoil, Chesapeake and Sasol recently announced joint plans.

Source: Vello A. Kuuskraa and Scott H. Stevens, Advanced Resources International. WORLDWIDE GAS SHALES AND UNCONVENTIONAL GAS: A STATUS REPORT

What Abundant Natural Gas Makes Possible

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Energy Independence

Supply Security

• Over 100-year supply projections of natural gas, expected to grow.

• Impacts global energy trade balance.• Importers may become producers.

2727

Reducing Climate Change Risk

Source: EnCana 2009

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Reducing Climate Change Risk

“Electricity from natural gas will account for 57% of new capacity through 2030, more than all other sources combined”

Source: Ray Walker, Range Resources. According to EIA Annual Energy Outlook 2009 Reference Case Presentation -- December 17, 2008

Gas is the future, says EIA.

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Lowest Cost Supply Alternative

$80

$95

$101

$111

$114

$142

$264

$396

Source: Ray Walker, Range Resources. According to the Institute for Energy Research, in Fall 2009 issue of “Technology Review, published by M.I.T.”

3030

Economic Impact: Wealth, Investment and Jobs

2010• $9 billion impact and 110,000 new jobs• $800 million in state/local tax revenue

2020• $13.5 billion impact and 175,000 jobs• $12 billion state/local tax revenue,

cummulative

Marcellus Shale report from economists and industry experts at Penn State University

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So What’s All the Hype About?

Centuries worth of supply Energy security and independence Reduces climate change risk Hundreds of thousands of new jobs Hundreds of $ billions in annual

economic impact and tax revenue Investment attraction and retention Enables renewable energy Clean, affordable, home grown,

abundant energy More stable prices

Energy Efficiency

What do you see as possible?

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Coming Soon in 2010

For more information, visit http://www.gastechnology.org/gug2010

Appendix Slides

3535

Gasification and Renewable Gas

> Developing efficient gasification systems that convert fossil and

renewable fuels into synthesis gases for power generation,

hydrogen, liquid fuels and chemicals

Advanced Gasifiers> Fluidized-bed technologies> Entrained-flow slagging

gasifiers> Catalytic gasification

reactor

Gas Processing Solutions

> Sour gas upgrading

> Syngas—contaminant removal, separations, catalysis, synthesis

Pilot-scale systems engineering and evaluations

Process simulation andTechno-economic evaluations

Engineering support for commercial project

deployment

3636

Exploration and Production

> Be a catalyst for new technology development and commercialization to expand the supply of affordable, abundant and clean-burning energy

Flow-back & Produced Water

> Water processing> Conservation> Public outreach

Reservoir Characterization

> Unconventional Gas> Methane Hydrates> Geothermal> CO2 sequestration

GTI Catoosa Test Facility> Drilling technologies> Well completion

technologies> Down-hole procedure

testing

Well Construction & Completion

> Laser energy applications

> Coiled tubing drilling> Innovative completion

methods

CNXGas

and .

GTI as technology

partner

ADT