Water Management at Ascent Stephanie R. Timmermeyer, Consultant for Ascent Resources

March 30, 2017

Company Overview

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Who we are… •  Ascent Resources is a leading upstream E&P oil and gas company •  Our assets are located in the Appalachian basin with premier acreage in the southern Utica shale •  Highly experienced and talented organization

How we got here… •  Ascent Resources’ roots go back to 2013 •  Utica acreage was acquired primarily in 2013 and 2014

through acquisitions from RHDK, EnerVest, Hess, XTO and SWEPI

Where we are… •  Headquartered in Oklahoma City, OK ~ 180 employees •  Field office in Cambridge, OH ~ 60 local Ohio employees

Ascent Resources Cambridge Ohio Office

Table of Contents

1)  Before Reuse a)  Challenges for Reuse b)  Problem Solving

2)  Execution a)  Economics b)  On-site Treatment c)  Planning/Logistics Requirements

3)  Results/Savings

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Before Reuse

•  All managed water was sent to injection wells for disposal

•  Specific per barrel price for each Ohio county we operated in which included hauling and disposal

•  Dispatch was managed by a third party company

•  Ascent decided to undertake a review of our water management practices

Source:fractracker.org

Challenges

•  Use of vendors, lack of control

•  Anticipating potential safety concerns in advance

•  Friction reducer effectiveness •  Requires closely monitoring pressure spikes

•  Frac company would need samples of production water to change the chemical design for each well utilizing reuse.

Problem Solving

•  Reviewed Needs for logistics, compliance, safety •  Internalize dispatch •  Water Tracking Software •  Reuse Program on frac

•  Reuse management onsite •  Condensate Avoidance

•  Reviewed Economics •  Refine Operational Areas for better pricing •  Bid disposal and hauling separate •  One price for injection regardless of fluid

weight

EXECUTION

Economics

•  Broke operational areas into Zones •  Based on water production volume and proximity of other pads

•  Hauling prices were gathered from each Zone to several injection locations as well as to any other Zone (for reuse costing comparison)

•  Because most injection wells in Ohio are located on the Western edge of our operational area, transportation would most always be cheaper to another Zone for reuse instead of injection.

Cost Savings Per Pad

cost for injection + hauling > cost of onsite treatment + hauling

On Site Treatment

•  Mechanical Filtration

•  We trialed several different mechanical filtering options

•  Implemented a filter pod system like the picture attached here.

Reuse Program

•  CURRENT •  We are currently blending about 10-15% reuse water on our fracs •  Our first priority in reuse is production water •  We add in rainwater and processed drilling water as available

•  FUTURE •  Flowback reuse will require more logistics (higher solids and oil is present) •  Planning for a similar setup as the next step in our reuse program

•  SAMPLING •  Freshwater •  Reuse Water

Planning/Logistic Requirements

•  Reuse requires a lot more upfront planning and logistics coordination.

•  Internal Dispatch must constantly monitor the field.

•  Effective vendors needed onsite to manage and mitigate potential hazards with incoming production water.

•  Pad layout design

•  Different mindset for the company

Completion Questions/Concerns

•  Which type of well would use more reuse water? •  Required daily tracking and several trials on dry

gas and wet gas pads •  Dry gas pads responded better to reuse than

wet gas pads

•  Communication between teams

•  When pressure began climbing, consultants first reaction was to cut reuse water

•  Required management commitment to prioritize reuse

RESULTS/SAVINGS

Savings – Injection vs Reuse

•  On Site Treatment costs are up to 70% lower than disposal at local injection facilities at pre-bid prices

•  Reuse by Ascent and other companies took a huge amount of water off the disposal market every day

•  This resulted in a drop in injection prices. •  ~30% savings on disposal costs when not going

to reuse.

Savings - Hauling

•  Hauling costs to disposal dropped 50% on average

•  Hauling costs to reuse saved us as much as 65% on pre-bid prices because of the shorter distance to reuse than to disposal

Soft Costs

•  Training programs

•  Tank cleaning at the end of a reuse

•  Containment and Spill Avoidance/Response

•  LEL/H2S Monitoring

Questions?