HYDRAULIC*FRACTURING* Prepared by: PRESENTATION* Prepared by May, - PowerPoint PPT Presentation

HYDRAULIC*FRACTURING* Prepared by: PRESENTATION* Prepared by May, 2012

WHO*ARE*WE?* Lochend*Industry*Producers*Group*(LIPG)*is*a*collaboraGon*of* five*CalgaryLbased*oil*and*gas*companies*that*operate* independently*in*the*Lochend*area*of*Rocky*View*County.** LIPG*companies*include: ** • Equal*Energy*Ltd.* • NAL*Resources*Ltd.** • PetroBakken*Energy** • Tamarack*Valley*Energy* • Tri*Oil*Resources*Ltd.*

OUR*PURPOSE* The* purpose* of* the* LIPG* is* to* collaborate* on* oil* and* gas* infrastructure*and*stakeholder*engagement*efforts*in*order*to:* • Create*opportuniGes*to*engage*the*community*and*gather*input* • Inform*about*area*acGviGes** • Educate*and*provide*operaGonal*informaGon** • Minimize*impacts*on*the*community*and*environment* • Build*trusGng*relaGonships* • Invest*in*the*community*

OUR*COMMITMENT* • The* Lochend* Industry* Producers* Group* is* comprised* of* reputable* companies* that* have* a* proven* track* record* and* are* commi%ed( to( integrity,(safe(and(fair(prac3ces,(partnering(with(the(community(for( responsible(resource(development.( • We( are( accountable( for( our( ac3ons( and( operate( in( a( safe( and( responsible( manner( to* protect* the* environment* and* miGgate* disturbance*to*impacted*stakeholders.* • We(work(closely(with(regulators,(community(leaders(and(impacted( landowners * to* ensure* we* comply* with* regulaGons* and* address* concerns*in*an*honest*and*Gmely*manner.* • Community* investment,* employment* and* tax* revenue* are* an* important*part*of* adding(value(and(benefit(to(the(community .*

LOCHEND**** R4 R3 R2W5 ACTIVITY*MAP* WELL LEGEND Licensed 22 23 24 19 20 21 22 23 24 19 20 2 Not Drilled Drilled HZ "Pad Well" 17 16 15 14 13 18 17 1 15 14 13 18 Gas to TriOil T28 T28 5-11-29-4W5 LIPG*member*companies*have* • 10 11 12 7 8 9 10 11 12 7 8 9 6 approximately*45*drilled*in*the* 6 7 y 5 4 3 a 2 1 6 5 4 3 2 1 6 w h Lochend*area* g i H 34 35 36 31 32 33 34 35 36 31 32 3 LIPG*collecGve*drilling* • 29 28 30 29 2 27 26 25 30 27 26 25 Highway 22 projected*for*2012*is* 22 23 24 19 20 21 22 23 24 19 20 2 T27 T27 approximately*40*locaGons* 3-20 Battery 18 16 15 13 18 17 1 15 14 13 17 14 The*target*zone*is*a*formaGon* 12 7 8 9 10 11 12 7 8 • 10 11 called*‘Cardium’* 1 6 5 3 2 1 6 5 4 3 2 Highway 567 34 35 36 31 32 33 34 35 36 31 32 The*Cardium*formaGon*is* • Big Hill Springs 27 26 25 30 29 27 26 25 30 29 28 approximately*2200m*below* T26 T26 22 23 24 19 20 21 22 23 24 19 20 the*surface* 15 17 16 15 14 13 18 17 14 13 18 • Produces*a*mixture*of*sweet* 10 11 12 7 8 9 10 11 12 7 8 (zero*hydrogen*sulphide*H2S)* R4 R3 R2W5 natural*gas*and*crude*oil*

LIFE*CYCLE*OF*A*WELL* The*life*cycle*of*a*well* begins*long*before*the* drilling*rig*breaks*ground* and*is*not*fully*complete* unGl*the*disturbed*area*is* returned*to*its*natural*state.** Through*each*stage*of*the* life*cycle*acGviGes*are* ongoing*in*the*areas*of* stakeholder*engagement,* regulatory*compliance,* health*and*safety*as*well*as* evaluaGng*and*miGgaGng* environmental*impacts.*

WHAT*IS*HYDRAULIC*FRACTURING? Fracturing*in*its*simplest*form:* • CreaGng*a*crack*in*the*rock*(1L2*mm)* • Filling*the*crack*with*sand*(also*called* proppant)* • Create*pathways*for*oil*producGon*to* flow*more*easily* Fracturing*(frac)*is*a*well*sGmulaGon* process*performed*to*improve*producGon* from*geological*formaGons*where*natural* flow*of*hydrocarbons*are*restricted.* Source:*ERCB*

WHAT*IS*A*FRACTURE?* Fractures*are:* • Cracks*in*the*rock* • Normally*verGcal* • IniGate*at*the*wellbore*and* grow*away*from*the* wellbore*in*two*dimensions* • Grow*verGcally*unGl*they* can*no*longer*crack*rock* (barrier),*and*grow* horizontally*away*from*the* well* (This&happens&at&the&same& -me)& Source:*Norm*Warpinski*Hydraulic*Fracturing* Technology*Conference*2007*

WHAT*IS*FRAC*FLUID?* • Both*water*and*hydrocarbon*based*fracing*fluids*may*be*used* based*on*the*rock*characterisGcs.*Currently*water*fracs*are* being*conducted*in*Lochend.* • Water*based*fracture*fluid*is*99.6%*water* • Use*of*guar*bean*as*a*viscosifyer*(thickener)*by*mixing*it*dry* on*site*(no*carrier*fluids*or*addiGves)* • Biodegradable*(green)*chemical*addiGves*are*being*used* regularly*and*diesel*has*been*eliminated*and*replaced*with* clean*mineral*oil*in*fracture*operaGons*in*the*Lochend*area.**

WHAT*IS*FRAC*FLUID?* • A*typical*frac*fluid*requires*certain*addiGves*depending*on*the* reservoir;* • Viscosifiers*or*FricGon*Reducer* • Viscosity*Breaker* • Clay*Stabilizer*(sea*water*subsGtute)* • Flowback*Enhancer** • Scale*Inhibitor* • Bactericide*(for*natural*occurring*bacteria*in*water)* • pH*Control*(to*enhance*effecGveness*of*viscosifier)* • Water*used*in*the*frac*process*is*tested*and*either*transferred* to*the*next*well*locaGon*for*reuse,*or*disposed*of*at*an* Alberta*licensed*disposal*facility.**

COMPOSITION*OF*A*FRAC*FLUID*

COMMON*FRAC*FLUID*ADDITIVES* Ingredient * Common Name * Frac Fluid use * Common use * Gellant * Guar bean gum * Water viscosifier, forms gel to Thickener used in cosmetics, suspend sand * toothpaste, and sauces * Water viscosifier (thickener) to Thickener for cosmetics and Gellant * Cellulose polymer * suspend sand * household products. * Crosslinker * Borate salt * Increases gel viscosity * Used in laundry detergents, hand soaps and cosmetics * Gel breaker to lower viscosity Laundry detergent and Gel Breaker * Sodium borate salt * for efficient cleanup * pharmaceuticals * Cellulase/Hemicellulase * Gel breaker (enzyme) to Used in commercial food Gel Breaker * lower viscosity for efficient processing, laundry cleanup * detergents, and pharmaceuticals. * Polyacrylamide * Minimizes friction between Flocculant for water Friction Reducer * fluid and pipe * treatment, soil conditioner for farming * Clay Control * Choline compound * To prevent clay swelling when Additive for feed/farming * contacted by water * Surfactants * Promotes the return of fluid Cosmetics * Flowback from the formation to the Enhancer * wellbore *

COMMON*FRAC*FLUID*ADDITIVES* Scale Inhibitor ( Phosphonate ( Prevents scale from forming Pharmaceuticals, water on pipes ( treatment, desalination systems. ( pH Control ( Sodium or potassium Maintains effectiveness of Used in washing soda, gel crosslinker * soap, hot tubs and water carbonate * softeners * Mineral oil * Carrier fluid for powdered Cosmetics, Carrier Fluid ( additives * pharmaceuticals, lubrication electric components * Kills bacteria in mix water * Cooling tower treatment * Bactericide ( DBNPA (amide) * Pre-Frac well Hydrochloric Acid * Cleans and dissolves scale * Cleaner (muriatic acid), stomach acid * treatment ( Carrier Fluid Propylene Glycol * Freeze proofing of water Pharmaceuticals (cough based carrier fluids * syrup), food processing * Antifreeze ( Foams water and Nitrogen * Hand Soap * Foamer/Gellant ( Surfactant * Additive carrier fluid * Rubbing Alcohol * Carrier for Foamer ( Isopropanol * Oil and water soluble solvent * Enhances oil flow in fracture * Unique non-hazardous Mutual Solvent ( formulation *

CONTROVERSIAL*FRAC*ADDITIVES* No(Benzene,(Toluene,(Ethylbenzene(Xylene((BTEX)(in(water( based(fracs(fluids.( • BTEX*is*naturally*occurring*in*crude*oil,*coal*and*gas*and*is* brought*to*surface*and*handled*appropriately*through* government*regulaGons,*equipment*use*&*employee/contractor* training.* • BTEX*does*occur*in*hydrocarbon*based*frac*fluids*along*with*the* produced*oil.* • Produced*BTEX*is*found*in*paints,*rubber,*adhesives,*inks,* cosmeGcs*and*pharmaceuGcal*products*and*vehicle*exhaust.* • Other*natural*sources*of*BTEX*include*emissions*from* volcanoes,*forest*fires*

FRACTURING*MODELING* A*fracturing*model*encompasses:** • microseismic*data*(if*available)* • rock*properGes* • potenGal*fracturing*systems* • proppant*type**** Lochend*fracs*are*designed*to*grow*approximately*120*m*from* either*side*of*the*wellbore*and*be*approximately*40L50m*in* height*and*less*than*2mm*in*width.* Models(are(a(very(accurate(predic3on(of(( the(fracturing(proper3es(

FRACTURING*MODELING Fracing*modeling*designs*implemented*in*the*Lochend*area* stem*from*a*number*of*compiled*studies;* Lab*analysis*of*the*rock*cukngs* • from*the*drilling*operaGon* Lab*tesGng*of*the*rock*cukngs* • reacGon*to*various*fracturing* fluids* Micro*seismic*studies*done*during* • fracture*operaGons*(not* conducted*for*every*well*–*usually* one*per*area)* Rock*compressive*strengths,* • reservoir*size*and*modeling* simulaGons*

MODELING*FRACS*

MONITORING*FRACS* • Technology*used*to*monitor*and*measure*the*frac*height,* length*and*orientaGon*of*the*fracture*is*called*microseismic** • Microseismic*can*only*be*conducted*when*there*is*a*verGcal* well*in*close*proximity*so*that*the*monitoring*equipment*can* be*lowered*into*the*well*to*detect*the*sound*waves** • Several*wells*have*been*monitored*using*microseismic*in*the* Cardium*formaGon*in*Central*Alberta*

MONITORING*FRACS*

EXAMPLE*–*MICROSEISMIC*DATA* Source:*SPE*145949*Hydraulic*Fracture*–*Height*Growth:*Real*Data*