• Water is essential to developing natural gas from shale formations.

• Contrary to many misconceptions, the natural gas industry uses a nominal amount of water when compared to other industries.

• Southwestern Energy designs and builds our own water collection and transfer system to: 1) collect rainwater runoff; 2) minimize the need for water from public sources; and 3) reduce the number of water-hauling trucks on the road.

• SWN is committed to water resource enhancements through our wetland mitigation and restoration efforts. According to the U.S. Army Corps of Engineers, SWN is a leading example in mitigation, restoring wetlands that will endure for generations to come.

Water UseFour Things You Need to Know

SWN has designed and constructed an elaborate water collection and transfer system to ensure water availability for our operations and minimize the need to use water from public sources.

This system creates the water resources we use by collecting and retaining rainwater in storage ponds that we construct and enhance, and transfers water from those resources through pipeline to our operational locations.

SWN partners with local

landowners to construct and use ponds as water sources. The design and construction of the ponds we build are held to the highest standards in Arkansas, which allow for the pond’s value to last long after our utilization of that water source is complete.

To date, we have built more than 160 ponds, which we believe will provide lasting benefits for generations to come.

Here is a closer look at the construction features of a typical SWN pond.

Sustainable Water Sourcing

TOPSOIL over the compacted earth embankment ensures vegetation will grown and create a natural pond habitat. No plastic is used to line the ponds we construct.

THICK CLAY layer is placed as necessary to protect the integrity of the dam.

ROCK LAYER

COMPACTEDEARTH EMBANKMENTserves as a dam to filter sediment and control water levels.

CREST LEVELRIPRAP prevents erosion by providing a surface foundation and slowing water flow.

SPILLWAY controls overflow when the pond is full.

CONCRETE OR STONE ‘SPEED BUMPS’ are placed at the top of the dam spillway to dissipate energy caused by water movement.

NEW TREES AND GRASS help prevent erosion and enhance beauty.

SWN Water ResourcesSWN’s strategic water collection, transfer and recycling system allows for sourcing water from:

Streams

Private Ponds

SWN Ponds

Recycled Water from

SWN activities

Scrs17% 26%

36%

21%

BEFORE, Coy Bryant Mitigation Area AFTER, SWN-Constructed Coy Bryant Stream

PICTURED ABOVE are before-and-after images of the Coy Bryant Consolidated Mitigation Area located in Conway County, Ark., where natural stream function was restored from land that was once a hayfield.

Facts about Aquatic Stewardship

Water Use (continued)

Hydraulic Fracturing Water Usage

Based on a development schedule of 500-600 wells per year, SWN uses approximately 6.6 million gallons (157,500 bbls) of water every day in our operations, with the majority of that water designated for hydraulic fracturing or “fracing.”

How does our water use compare to other major industries? According to a U.S. Geological Survey report on water usage and a Department of Energy study, approximate benchmarks include:

• Irrigation for agriculture and horticulture uses 128 billion gallons per day nationwide.

• The average state uses 2.9 billlion gallons on a daily basis to produce electricity from power plants.

• In terms of energy resource production in the U.S., natural gas uses significantly less water than nearly all other fuel sources to generate the same amount of energy, including coal and nuclear sources.

Innovative Transportation

Our water transfer system leverages gravity and uses pumps to transport water by pipeline from permitted sources to storage ponds or well locations to use for fracing (completions). Using this system instead of water-hauling trucks allows us to eliminate a significant amount of traffic from SWN activities, which reduces road maintenance and our environmental footprint.

Water Recycling and Reuse

At different stages during and after the fracing process, water flows back out of the well to be recycled, properly treated or disposed of at permitted injection facilities. SWN currently recycles 100 percent of the water produced immediately after fracing, allowing for the water to be reused in fracing another well. This water is able to be recycled over and over again throughout the lifetime of our operations.

Habitat Protection

Pond, stream and river withdrawals are state regulated and permitted. These regulations monitor the water supply for other users, aquatic-life habitat, recreational resources, agricultural and municipal use.

Mitigation and Renewal

As with any other entity that involves displacement of natural habitat, SWN is required to mitigate or “lessen” our impact on the environment by rehabilitating lost wetlands or creating a new habitat.

To date, SWN has completed two full-scale mitigation areas that meet the Army Corps of Engineers’ requirements, with four additional projects in progress.

Our current projects have restored 135 acres of aquatic habitat in Arkansas to historical conditions. Nearly 18,000 native trees and shrubs have been planted and almost 8,000 linear feet of streams have been enhanced and restored. These habitats are federally protected and will remain in perpetuity for natural preservation of the environment.