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Classification: External 05-23-12

Tweaking the Frac. Russell Rankin | Bakken BU | May 23, 2012. Classification: External 05-23-12. Forward Looking Statements.

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Classification: External 05-23-12

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  1. Tweaking the Frac Russell Rankin | Bakken BU | May 23, 2012 Classification: External 05-23-12

  2. Forward Looking Statements This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "believe", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements.  All statements other than statements of historical fact, including, among others, statements such as those regarding: plans for future development and operation of projects; reserve information; expected exploration and development activities and plans; expected start-up dates for projects and expected production and capacity of projects; the expected impact of USD/NOK exchange rate fluctuations on our financial position; oil, gas and alternative fuel price levels; oil, gas and alternative fuel supply and demand; the completion of acquisitions; and the obtaining of regulatory and contractual approvals are forward-looking statements. These forward-looking statements reflect current views with respect to future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand and pricing; price and availability of alternative fuels; currency exchange rates; political and economic policies of Norway and other oil-producing countries; general economic conditions; political stability and economic growth in relevant areas of the world; global political events and actions, including war, terrorism and sanctions; the timing of bringing new fields on stream; material differences from reserves estimates; inability to find and develop reserves; adverse changes in tax regimes; development and use of new technology; geological or technical difficulties; the actions of competitors; the actions of field partners; the actions of governments; relevant governmental approvals; industrial actions by workers; prolonged adverse weather conditions; natural disasters and other changes to business conditions. Additional information, including information on factors which may affect Statoil's business, is contained in Statoil's 2010 Annual Report on Form 20-F filed with the US Securities and Exchange Commission, which can be found on Statoil's web site at www.statoil.com. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements.  Unless we are required by law to update these statements, we will not necessarily update any of these statements after this Capital Markets Day, either to make them conform to actual results or changes in our expectations. 2 -

  3. Agenda Evolution of the frac Evolution of Statoil in the W.B. Pilot programs Applying other technologies HSE Background 3 -

  4. Statoil - 40 years of growth COUNTRIES OPERATING 36 HEADQUARTERS Norway EMPLOYEES WORLDWIDE 21,300 MARKET CAPITALISATION OF ABOUT * USD 88 billion Listed on New York and Oslo stock exchanges * Updated March 23, 2012 4 -

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  6. NORTH AMERICA Statoil’s Onshore Portfolio Statoil’s Onshore Portfolio Driving Growth Bakken - Oil • Statoil acquisition of Brigham, Dec 2011 • ~375,000 net acres across • 17 operated rigs • Resource potential: ~300-500 million boe Eagle Ford – Wet Gas • Joint development with Talisman since 2010 • ~82,000 net acres across • 8 Talisman operated rigs • Resource potential: ~640 million boe Marcellus – Dry Gas • Joint development with Chesapeake since 2008 • 665,000 net acres • 24 Chesapeake operated rigs • Resource potential: 2.5-3.0 billion boe 6 -

  7. Objective is zero harm to areas where we operate Statoil expects its operators and suppliers to follow relevant regulations and best practices Actively manage environmental risks and employ advanced technology to mitigate impact “Good Neighbor” STATOIL IS RECOGNIZED FOR HSE & Integrity Focus #1 ranked in sustainability amongst O&G companies in 2011 7 -

  8. ENGINEERING EVOLVES OVER TIMEEvolution of the Frac 1947 – Stanolind Oil, Hugoton field, Kansas * Photo credit: JPT Online, Hydraulic Fracturing: History of an Enduring Technology 8 8 -

  9. ENGINEERING EVOLVES OVER TIMEEvolution of the Frac 2012 – Statoil, Williston Basin, North Dakota 9 9 -

  10. ENGINEERING EVOLVES OVER TIMEEvolution of Completions in the Williston Basin ~EUR(2) Late 1980’s 152,000 Boe Bicentennial / Elkhorn Horizontal Drilling 2,700’ Lateral, Upper Bakken Shale, Openhole 2001-2005 Introduction of Fracture Stimulation 304,000 Boe Elm Coulee (MT) 9,500’ Lateral, Single-Uncontrolled Frac 2006 123,000 Boe North Dakota 9,500’ Lateral, Single-Uncontrolled Frac 2006 354,000 Boe Swell Packers Parshall / Austin / Sanish 5,000’ Lateral, 7 Frac Stages ~715’/interval 431,000 Boe 1st Long Lateral High Frac Stage Completion 2009 9,500’ Lateral, 20 Frac Stages ~475’/interval 600,000 Boe More Fracs/Smaller Frac Intervals 2012 9,500’ Lateral, 30-38 Stages ~250’ - 300’/interval 10 -

  11. Reservoir Contact in Tight Rock is Critical • Propped fractures touch more rock than multi-lateral wells • It is more effective to touch rock with a fracture than with a drill bit • Simple, single laterals designed for stimulation • With 150 fracs, estimate ~6,000,000 ft2 of contact 5 laterals drilled from one wellhead Propped fractures *Overhead, map view h = 50 ft L = 200 ft Half-length f Tiny frac, perhaps 20,000 lbs of proppant at 1 lb/sq ft 2 wings * 2 faces * 200 ft * 50 ft = 40,000 ft² of reservoir contact Multi-lateral: 15,000 ft of drilled length in 5 laterals = <24,000 ft² of reservoir contact 11 -

  12. Field Results Learned from Short Laterals • Smaller dataset • Similar lateral length and close proximity >10 Stages <10 Stages 12 -

  13. SETTING A BASELINE FOR OLD TECHNOLOGYField Results D D C B C B Single stage fracs gave low, but remarkably similar production. A Single stage well IPs ~150 to 300 Bopd Corroborates vertical well control indicating consistent reservoir attributes across ~19 miles in Study Area A 13 -

  14. COMPLETING A WELL WITH SWELL PACKERS & 20 STAGESField Results D D E C B C B Operator’s first 20-stage completion: IP: 1,200 BOPD A Well E: 20-stage completion 4x - 9x IP 14 -

  15. APPLYING RESULTS FROM SHORT LATERALSIncreased Stages in Long Laterals 15 -

  16. Pilots Bakken / Three Forks Density Pilot Bakken Density Pilot Increased Proppant HiWay Frac Multi-port Frac Sleeves Mountrail North Dakota Williams Roosevelt Montana Missouri River Richland McKenzie 16 -

  17. Hi-Way Frac Study C B Hi-way frac D Plug & perf frac A A B D C 17 - * Downtime removed

  18. New Technology Frac Sleeves Study New technology frac sleeves Plug & perf frac Put map in here. 18 - * Downtime removed

  19. Increased Proppant Volume Study 350 Lbs/ft of lateral 250 Lbs/ft of lateral D B G A B C D A F F E C E G H H 19 - * Downtime removed

  20. Microseismic Preliminary Results Well B Well A Surface location • 90% of the microseismic events occur within ~330’ of the lateral for both wells • Nearly twice as many microseismic events were recorded in Well B (increased proppant) vs. Well A Well B 350#s per ft Well A 250#s per ft BHL 398 Events 762 Events Number of Events BHL Distance to Lateral 20 -

  21. UNLOCKING VALUE BY APPLYING TECHNOLOGY Above & Beyond Tweaking the Frac Smart pad development Fluids management Integrated operations Gas lift Using natural gas as a fuel Infrastructure efforts 21 -

  22. Statoil Russell Rankin Bakken Business Unit E-mail address: rrankin@bexp3d.com www.statoil.com 22 -

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