Water Reuse for Unconventional Oil and Gas Operations

1. Water Reuse for Unconventional Oil and Gas Operations Prepared for Energy Summit Loveland, Colorado July 10, 2014

2. Outline of Presentation • Introduction to AECOM • Importance of Water to Unconventional O&G Development • Integrated Wellfield Water Management • How Technology Can be part of the Solution

3. Introduction to AECOM • Safety is the foundation for everything we do • With approximately 45,000 employees in more than 140 countries, AECOM serves all segments of the oil and gas industry • Integrated Solution Provided for Oil and Gas • Transportation • Environment • Building/Housing • Water/Wastewater • Power • Global delivery of program and project services from our operating locations in +140 countries • Comprehensive services across the oil and gas asset life cycle

4. Importance of Water During Unconventional Oil and Gas Development • Water is critical to developing unconventional oil and gas resources (approx. 5 million gallons per well in Colorado) • Public perception is that hydraulic fracturing may stress limited water resources or presents risks to water quality • Water supplies are finite and regulations only get more stringent • Responsible water resources management is part of an operator's Social License to Operate • Importance of water management and regulatory pressures will increase over time

5. Changing View of Water in O&G Operations • Historically water was viewed as a by-product or waste • Handled through disposal or reinjection • Currently – Water is being viewed as part of economic value chain • Water is an operational requirement for well development (fracking) • Need to manage wisely to maintain regulatory compliance and public trust • Cost – Handling and distribution is approximately 2/3 of overall water cost; largely driven by trucking • Opportunity to enhance Social License to Operate • Recycle, re-use and community engagement on water issues Capital Costs Verses Operational Expense • Cost reductions may be realized by investing in pipelines to minimize trucking

6. Water Management Solutions for Shale Gas Development • Opportunities exist for developing integrated well field and regional water management strategies associated with unconventional oil and gas development • Water recycling (during development) • Becoming an industry standard • Requires a minimal level of treatment (known technologies – DAF) • Is largely a logistics issue (having water available when you need it) • Combination of mobile units and fixed water treatment infrastructure • Beneficial Re-use (after drilling and during operation) • Industrial • Agricultural • Requires a more advanced level of treatment including solids removal • Reverse Osmosis

7. Market Oil Gas CPF Multi-well Pad Multi-well Pad Fluids pipeline Fluids pipeline Mobile treatment Mobile treatment Produced Water Stage 1 Treatment (TSS Removal) Multi-well Pad Storage Reservoir Multi-well Pad Storage Reservoir Water pipeline Water pipeline Multi-well Pad Multi-well Pad Stage 2 Treatment (TDS Removal) Disposal (Brine) Irrigation Other Industries Beneficial Re-use Stream Discharge Aquifer Recharge

8. Permits-to-Production (P2P) orProgrammatic Infrastructure Management • Components: • Permits (land use/env) • Planning • Community relations • H&S services • D/B drilling pads • Infra/road design • Power/energy services • Construction/CM • ENV monitor/reporting • Water management • Produced water treatment • Emergency response • Restoration/reclamation Project Drivers PM CM

9. Technology Can Provide Solutions, But You Need to Ask • Regulatory Drivers • Statewide regulation mandating water recycle/re-use • Scarcity Drivers • Lack of available water makes recycling more attractive • Social License to Operate • Companies decide that its in their best interest to manage water in a socially responsible manner • Long-term Financial Outlook • Investments in infrastructure are financially attractive when viewed over a longer time frame or when shared between operators • Combination of the Above

10. Example from Australia – Regulatory Driven • Beneficial reuse of associated (produced) water from Coal Seam Gas production • Integrated water management and treatment facilities • Long-term water management strategy to support beneficial re-use (agriculture)

11. Scarcity Driver – Toilet to Tap (California) • Orange County residents get their water from a massive underground aquifer, which, since 2008, has been steadily recharged with billions of gallons of purified wastewater

12. Summary • Water plays a critical role in developing unconventional O&G • Managing water for recycle or re-use is best accomplished on a well field or regional basis • Requires planning and investment • Competitive financially when viewed over the long term • Technological solutions for re-use exist today • Non-technological drivers play a critical role in driving re-use • Regulatory • Scarcity • Social License to Operate • Financial • Technology can provide solutions, but you need to ask…..

13. Thank You David Ellerbroek – AECOM david.ellerbroek@aecom.com 720.563.1291 July 10, 2014