Shale Plays. Baker Hughes. Adam Anderson, VP, US Land Operations Completions Fred Toney, VP, Pressure Pumping Services.

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1 Shale Plays Baker Hughes Houston, Texas Adam Anderson, VP, US Land Operations Completions Fred Toney, VP, Pressure Pumping Services 2010 Baker Hughes Incorporated. All Rights Reserved.

2 Forward Looking Statements Except for the historical information set forth in this document, the matters discussed in this document and presentation are forward-looking statements that involve certain assumptions and known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially. Our expectations regarding our business outlook and business plans; the business plans of our customers; oil and natural gas market conditions; costs and availability of resources; economic, legal and regulatory conditions and other matters are only our forecasts regarding these matters. All of our forward-looking information is subject to risks and uncertainties that could cause actual results to differ materially from the results expected, including, but not limited to, general economic and business conditions; global economic activity; oil and natural gas market conditions; and political and economic uncertainty. Additional factors that may affect future results are contained in: Baker Hughes Annual Report on Form 10-K for the year ended December 31, 2010; the forward looking statement section of our news releases; and those set forth from time to time in our other filings with the Securities and Exchange Commission (the SEC ), which are available at the SEC s web site at Except as required by law, Baker Hughes does not intend to update or revise statements contained in these materials based on new information, future events or otherwise Baker Hughes Incorporated. All Rights Reserved.

3 Shale Gas Overview

4 Conventional Formations vs. Shale Plays Conventional plays Progressively smaller size Good conductivity (5 1,000 md) Vertical wells with little to no stimulation will generally deliver profitable wells Risk in identifying and discovering fields Unconventional plays Massive geographic size Very tight conductivity (nano-darcies) Conventional vertical wells will deliver little to no rate Risk is in ability to exploit formations Known about but never considered producible until

5 Technology Enablers Horizontal drilling Exposes substantially more reservoir area Staged hydraulic fracturing Exposes substantially more reservoir area

6 Shale Basins

7 Haynesville

8 Bakken Source: Brigham Exploration

9 Woodford Source: Continental Resources

10 Eagle Ford Source: EIA

11 Eagle Ford Thickness and Stratigraphy 11

12 Gas Price Required for 15% Returns Hub Price for 15% After Tax ROR Powder River CBM Cotton Valley Vertical Cotton Valley Horizontal Piceance Basin Valley Fayetteville Shale Haynesville/Bossier Shale - NE TX Haynesville Shale - Core LA / TX Woodford Shale - Arkoma Huron Shale Barnett Shale Barnett Shale - Southern Liquids Rich Barnett Shale - Core Horn River Basin Pinedale Cana Woodford Shale Marcellus Shale - NE Marcellus Shale - SW Marcellus Shale - SW Liquids Rich Eagle Ford Shale - Dry Gas Eagle Ford Shale - Liquids Rich Granite Wash - Horiz. Granite Wash - Liquids Rich Horiz. $0.00 $0.35 $5.55 $5.11 $6.18 $4.85 $4.77 $4.60 $5.21 $4.54 $4.36 $4.06 $3.96 $3.06 $4.33 $3.63 $2.66 $4.08 $5.74 $7.52 $7.43 $7.81 Oil Price: $80 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 ($/MMBtu) Source: Credit Suisse

13 Efficient Well Placement for a Successful Completion Hitting the target Rotary steerable systems with RNS enables accurate placement of the wellbore in the target zone while improving borehole quality Completion design Identify high sand content / more brittle zones to initiate and maintain fracture conductivity Improving completion deployment Lower dog leg severity / more competent wellbore leads to higher success in landing completion at depth Reservoir Navigation System Baker Hughes Incorporated. All Rights Reserved.

14 AutoTrak Curve Rotary Steerable System High build rate, fully integrated land-based drilling system Increases drilling performance vs. conventional motor systems Eliminates orienting / sliding for steering Saves trips to change bottomhole assembly for different directional profiles Fastest growing segment of the drilling systems market Rate of penetration improved by a factor of three 5 /100 ft Conventional RSS 15 /100 ft AutoTrak Curve

15 Plug and Perf Industry standard technique stages common Key considerations Simple Most common methodology Multiple entry points in each stage Fracture initiation with perfs Cement Isolation between zones Time consuming Baker Hughes Incorporated. All Rights Reserved.

16 Multi-Stage Completion Systems Primary method in select basins 40-stage system installed and fractured Key considerations Most efficient method Conventional system single entry point for fracturing Emerging multiple entry point systems Substantial potential to improve frac equipment efficiency / utilization Baker Hughes Incorporated. All Rights Reserved.

17 Multi-Port System Conventional plug and perf provides multiple entry points for each frac stage, but is time-intensive Multi-Port system provides numerous entry points but at great time savings

18 OptiPort Baker Hughes Ported Collar and Custom Pup Joints Annular Frac BHA Packer EasyTag CCL Unlimited number of stages Coil tubing activated Reduced fluid usage Used extensively in Canada

19 Next Generation FracPoint Completion System Electrochemical reaction controlled by varying nano-scale coating within the composite grain structure Openhole fracturing market: $1 billion in to 2011 anticipated 6% increase in Baker Hughes market share with INtallic technology Baker Hughes Incorporated. All Rights Reserved.

20 Time Savings with Baker Hughes Time per Frac Stage Plug and Perf FracPoint Multi-port 0 min 50 min 100 min 150 min 200 min 250 min 300 min

21 Eagle Ford Frac Fleet in Action

22 Pressure Pumping Today's Necessary Resources Fleet size People Support Systems Facility requirements Competitive advantage

23 Gorilla Fleet in the Eagle Ford

24 Baker Hughes Asset Life Approach to Shales Exploration Appraisal Development Production Rejuvenate Geomechanic models GMI Reservoir and Economic Analysis Gaffney Cline Reservoir Characterization RDS Reservoir Simulation Epic Fracture Modeling Meyer and Associates Shale Technology Group (PP) Magnitude/Vsfusion BHI GeoScience Formation Evaluation Baker Atlas Wireline Logging Baker Hughes INTEQ MWD, directional drilling and coring Drilling Optimization Hughes Christensen bits Baker Hughes Drilling Fluids (Nemsco) Baker Oil Tools Completion Systems, Fishing BJ Services Pumping Baker Atlas Wireline Logging Baker Hughes INTEQ MWD, directional drilling and coring Hughes Christensen bits Completion Optimization Baker Hughes Drilling Fluids (Nemsco) Baker Oil Tools Completion Systems, Fishing and Whipstocks BJ Services Pumping Baker Petrolite Total Chemical Solution Unconventional Reservoir Consulting Baker Atlas Production Logging and Monitoring Production Optimization Baker Hughes Pressure Pumping Baker Petrolite Well Remediation Baker Oil Tools Wellbore Intervention

25 Microseismic and Frac Analysis Understanding and predicting the effectiveness of your fracs Where the most horsepower goes is not necessarily where the gas flows Rates measured by PLT 5 months later Enhanced prediction over simple type curve used by most of the industry

26 Blue Well Bore Water Reclamation Production Recovery Production Chemicals Wireline Pressure Pumping Completion Systems Drilling Systems Drilling Fluids Drill Bits Reservoir Development Services

27 Shale Plays Baker Hughes Houston, Texas Adam Anderson, VP, US Land Operations Completions Fred Toney, VP, Pressure Pumping Services 2010 Baker Hughes Incorporated. All Rights Reserved.