3 rd Shale Play Water Management Marcellus and Utica COLLABORATION CASE STUDY

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1 3 rd Shale Play Water Management Marcellus and Utica COLLABORATION CASE STUDY

2 Antero Resources Appalachia Overview

3 Antero Resources Appalachia Overview Antero Resources Current Operations:! 12 Drilling rigs operating in the Marcellus! 2 shallow rigs operating for top hole drilling! Approximately 460 MMcf per day of gross operated production or 365 MMcfe per day net! The net daily production figure includes approximately 1,500 Bbls per day of natural gas liquids (NGLs) and oil 3

4 Antero Resources Capital Budget ! $1.65 Billion Capital Budget for 2013! $1.15 billion for drilling and completion! $350 million for the construction of gathering pipelines and facilities! $150 million for water-handling infrastructure primarily in the Marcellus Shale! Currently building an 80-mile water sourcing and pipeline distribution system in West Virginia! Distribution system will reduce frac water costs from approximately $6.00 per barrel currently to approximately $2.00 per barrel 4

5 Antero Resources Water Management Goals Antero Resources Appalachia has worked closely with the WV DEP to implement a water management plan that will minimize the impact to local rivers and streams, minimize trucking on local roads, and prevent contamination of ground water sources from pits. Antero Resources Appalachia Water Management Goals:! 100% recycle and reuse of flowback water.! Minimizing costs and truck traffic through the construction of an 80 mile water pipeline network that will connect the West Fork River to the Ohio River and supply most pads in the operating areas in between.! Minimizing pits by managing all water through a network of freshwater impoundments and above ground storage tanks.! Minimizing trucking through a flowback recycling program and centralization of water facilities.! Accurately track water volumes and hauled loads using a iphone/ ipad application. 5

6 Collaboration Case Study

7 Water Recycling Collaboration Antero Resources has treated and reused ~ 100,000 barrels of flowback water from other operators:! Antero s aggressive completion schedule allows it to reuse water from other operators whose completion schedule may not allow for the storage of treated water for long periods of time between frac jobs.! Antero has a cost sharing arrangement in place with a major Marcellus operator to treat and reuse its water, in exchange for access to this operator s treated AMD water sources.! Sharing arrangements result in reduced trucking of water to Ohio disposal wells and lower freshwater usage by Antero for its fracs. 7

8 Other Collaboration Examples Antero Resources is currently constructing an an 80 mile water pipeline network that will connect the West Fork River to the Ohio River and supply a reliable source of water to most pads in the operating areas in between.! Worked closely with Pete Miller, Water Resources Manager at Range Resources, to glean lessons learned, permitting requirements, and best practices from Range s water pipeline from the Ohio River to Southwest PA.! Range allowed Antero representatives to tour its Ohio River pump station and speak with its engineering team for the project prior to Antero starting work on its own pipeline project, resulting in a more rapid timeline to construction.! Worked with a large Marcellus producer on a potential tie-in to Antero s pipeline from this producer s AMD treatment facility. 8

9 Future Collaboration Ideas Antero Resources is actively seeking collaborative opportunities with other Marcellus and Utica operators related to water management that can potentially lower production costs for all parties involved. Potential Collaboration Opportunities:! Centralized flowback/produced water recycling operations to service multiple operators in a particular operating area.! Sharing of freshwater sources and water withdrawal points.! Cost sharing on future pipeline projects from reliable water sources to lower per barrel frac water costs. 9

10 Centralized Recycling Facility Example Centralized Water Recycling Facility in Lycoming County, Pennsylvania

11 Chance Richie (412)