Hydraulic Fracturing

Overview

The Fundamentals Horizontal Drilling Hydraulic Fracturing Water Management Produced Water Baseline Sampling Disclosure Questions and Answers

The Fundamentals

Definition The use of fluids to create a crack by hydraulic

pressure The continued injection of fluids into the created

crack fracture to make it grow larger The placement of small granular solids into the

crack to ensure the crack remains open after the hydraulic pressure is no longer applied

Why HF a Well?

Increase the Rate at which the well is capable of producing oil or gas

Most unconventional formations Require hydraulic fracturing to be economic

Does not increase total Reserves

Why HF a Well? Electronic Microscope Image of Rock

Magnification: 1000X Filename: S0178.tif

Width of a human hair

100 µm

Fractured Contact

“HydraFrac” Process July of 1947 - Stanolind Oil and Gas

• 1st Job: Klepper No. 1 gelled kerosene/gasoline mix• Hugoton Gas Field, Kansas

Late 1948 - Patent issued, 23 wells H.F. before commercial application began

In 1949, The Halliburton Oil Well Cementing Co. was granted an exclusive license to pump the new “Hydrafrac” process• 332 wells were treated first 12 months• 75% success rate

Drilling

Drilling Distance

Wells Fargo Center ~700 ft

7000 ft.

Aquifer 400-800 ft.

Casing

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

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

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

Drilling Depths (feet)

DJ Basin: 7,000-8,000 Piceance Valley: 7000 Piceance Mesa:

12,000 Raton Basin: 2,000

Hydraulic Fracturing

HF Fluids

HF Fluids

Additive Main Compound Common Use Diluted Acid Hydrochloricor, Muriatic Acid Swimming Pools Biocide Glutaraldehyde Dental Disinfectant Breaker Ammonium Persulfate Bleaching Hair Crosslinker Borate Salts Laundry Detergents Iron Control Citric Acid Food Additive Gelling Agent Guar Gum Biscuits Scale Inhibitor Ethylene Glycol Antifreeze Surfactant Isopropanol Glass Cleaner Friction Reducer Polyacrylamide Water and Soil Treatment

HF Fluids Depending on the fluid system being pumped various

additives are used:

Additives are transported in concentrated form Typically injected at less than 3 gallons per 1,000 gal of

water (0.3%) All additive injection rates are controlled. The purpose of any additive is to help improve the

overall process

Polymers Crosslinkers

Surfactants Clay Control

pH Control Gel Breakers

Bacteria Control Fluid Loss Additives

Frac Fluids

Water Management

Sources of Water Use of Water Must be Legally Allowed

Municipal lease/purchase (industrial uses) Changed water rights (e.g. temp agricultural to

industrial) Fully consumed water (leased/purchase

effluent) Produced water (non-trib or decreed trib &

augmented) Non-tributary (landowner & operator agreement)Source - COGCC

Amount of Water The amount of water needed depends on the

geologic basin, the formation, and the well. Raton Basin, approximately 50,000 to 300,000 gallons

may be for a shallow coalbed methane well Piceance Basin, approximately 800,000 to 2 million

gallons for a deeper tight sand gas well. DJ Basin, approximately 250,000 gallons may be used

to frac a vertical well, while up to 5 million gallons may be used to frac a horizontal well.

Source - COGCC

Colorado Water Use  Total (Million gallons/Day) Total (Billion gallons/Year)

Irrigation (crop) 12,322 4497

Irrigation (golf course) 41 14

Public-supply 864 315

Domestic 34 12

Industrial 142 52

Livestock 33 12

Mining 21 8

Thermo-electric 123 45

Total withdrawals 13,581 4957Source: USGS 2005 Estimated Withdrawals and Use of Water in Colorado, 2005

Colorado Water Use

Estimated Water Use

2015: 0.10% of total water use

Source: COGCC

One Acre Foot is Approximately 326,000 Gallons

Water Requirements

Natural gas has one of the lowest water usage rates per MMBTU

Produced Water

Produced & Flowback

Produced water is naturally-occurring (“connate”) water that exists in the formation and is “produced” along with hydrocarbons

Flowback water is recovered water from HF use that returns to the surface

Disposal

60% Underground Injection Wells 20% Lined Open-Air Pits 20% Surface Discharge: rivers and

streams, dirt roads

Disposal Regulation

Rule 907 - Management of Exploration and Production (E&P) Waste

Rule 908 - E&P Waste Management Facilities Regulation

Rule 325 - Underground Injection of Water

Baseline Water Sampling

Concept

Pre and Post-drilling water samples taken around new well starts

Increased transparency & accountability for industry

Allows public to search all public records on COGCC

Analytical results on a timely basis

Program

COGA, Hickenlooper, Dept. of Natural Resources, and COGCC

93% Participation

Program Details

Samples collected on new wells and new expansions

In accordance with COGCC Sampling and Analysis Plan

Post-Drilling sampling conducted within 1-3 years

½ mile radius of well pad surface location Sample collected within 48 hours of

notified complaint

Program Details Cont.

Samples sent to certified lab Landowners notified of results along with

education materials Samples available to public via database

on COGCC website Annual review of program implementation

and results

HF Disclosure Registry

New HF Rule

Requires public disclosure of HF chemicals using FracFocus.org Well-by-well Basis

Trade Secret Protection File with COGCC

48 hour advance notice from Operator to the Commission is required of intention to hydraulically fracture a well.

HF Disclosure Registry Initiated by the Ground Water Protection Council

(GWPC) and Interstate Oil & Gas Compact Commission (IOGCC)

Website Development Committee: Industry, State, & GWPC

Industry has unanimously supported the Registry ANGA (American Natural Gas Alliance) AXPC (American Exploration & Production Companies) API (American Petroleum Institute) IPAA (Independent Petroleum Association of America) NGSA (Natural Gas Supply Association) INGAA (Interstate Natural Gas Association of America)

Concept of the Registry Web interface where operators voluntarily register HF

chemicals Timely, consistent data Centralized upload area for operators Secure information

Web interface where public finds more information on the HF process

Well site search tool Allow public to search for individual HF wells Query by state, county, API number, production type, lease

name or well number From 2011 forward

FracFocus Website

39

Improved Search

HF Disclosure Example

Questions?

Thank you for your interest in Colorado’s oil and gas industry!

www.coga.org