Clean Natural Gas: the Best Frac'ing Fuel

Jeramie Morschhauser – Cabot Oil & Gas CorporationRonnie Hughes – Baker Hughes InternationalGeorge Stark – Cabot Oil & Gas Corporation

Determining a Bifuel solution to meet operational needs

Jeramie Morschhauser Completions EngineerCabot Oil & Gas Corporation

• Bifuel – The ability of an engine to co-fire two different types of fuel.

• Bifuel engines utilized in Cabot operations co-fire Natural Gas and Diesel

What is Bifuel?

• Cabot had already……..

• Built a CNG facility

• Converted vehicles

• Ran drilling rig on CNG

Driving Force

Why the Frac’ing Delay?

• Needed a consistent fuel source to handle the hydraulic horsepower demand of a frac operation

• Typical frac requires 17,000 HHP

That’s enough HHP to power 253 homes…

• Bifuel engines meet the horsepower demands AND allow for the option to run ONLY on diesel

Natural Gas Fueling SelectionFueling Options Available:

1) Compressed Natural Gas (CNG)2) Liquefied Natural Gas (LNG)3) Line Gas

Considerations:

Is pipeline infrastructure in place? Gas Quality? Sufficient line pressure and

volume? Are there reliable refueling stations

for LNG and CNG in close proximity?

Why Cabot Chose Line Gas

• Logistics/Increased Efficiencies

• Reduction in Diesel and Emissions

• Economic Benefits

Logistics

• Infrastructure: Pipeline in place

• Sustained line pressure of 800+ psi

• No compression needed

• Consistent fuel supply

• Elimination of trucking from resupply of CNG or LNG

Line gas: Increased Efficiencies

• High quality natural gas: Dry 97% Methane 1030 BTU

• Increase in Bifuel Engine performance from high quality natural gas

Low Quality Medium Quality High Quality LNG

Gas Quality

Fu

el S

av-

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Reduced Diesel

2013Pads NG Stages HHP Gas Used Diesel Saved

3 Well Pad 39 57,3614 9,82 MCF 6,871 GAL

10 Well Pad 170 242,5063 15,025 MCF 105,176 GAL

2 Well Pad 45 70,3849 4,771 MCF 33,398 GAL

1 Well Pad 19 260,124 3,005 MCF 21,032 GAL

4 Well Pad 75 1,209,004 6,638 MCF 46,468 GAL

3 Well Pad 74 972,924 10,275 MCF 71,924 GAL

Total: 422 6,144,578 HHP 40,695 MCF 284,868 GAL

• Gallons of Diesel saved would allow a tractor trailer to circle the globe 80 times

• You could fill your car up 17,800 times

**Assuming $4.00/gal diesel & $4.00/MCF NG

$1,139,472In Diesel savings

$203,477In Natural Gas costs

$976,690 In total savings

Closer Look at Savings

$2,314Per Stage Savings of

Which breaks down into:

The Big Picture

Reduced Emissions

CO PM NOx0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Gathering Line

Meter Skid

Gas Processing Unit (GPU)

Feed Line

The “Handoff”

Baker Hughes International – providing solutions that work

Ronnie HughesDirector, Operational Efficiency for Pressure PumpingBaker Hughes International

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What are we going to cover?

▪Perfect HSE Days▪Safety & Environmental▪Job Details▪Bifuel basics▪Location Layout▪Conclusion

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Perfect HSE Day is a day with zero recordable injuries or illnesses, zero serious spills/releases, and zero motor vehicle accidents across the enterprise. A Perfect HSE Day means all

employees go home safely to their families and the environment is not harmed.

“In addition to the records set, this job included 28 Perfect HSE days,” said Phil Urlacher, District Operations Manager in Mill

Hall, Pa. “This achievement truly shines a light on Baker Hughes and demonstrates our ability to exceed our customer’s needs

through the use of our outstanding personnel”.

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Safety, Environmental & Efficiency

▪Baker Hughes worked with Cabot to ensure the components of the fracturing fluids used on these wells were reviewed using the SmartCare™ process.

– 70,000 gallons of Friction Reducer– 7,700 gallons of Scale inhibitor– 15,400 gallons of biocide– 210,000 gallons of HCL acid (42 transports)– 64.5 million pounds of sand - 1,290 sand deliveries– 1,358 tractor trailer loads

▪The Bifuel technology delivered significant benefits in terms of efficiency and environmental performance. All 10 wells were fractured in 27 days, including a record-setting nine stages in a single day.

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Baker Hughes SmartCare™

▪The Baker Hughes SmartCare™ qualified products, systems, and services minimize environmental impact during hydraulic fracturing. This family of superior chemistry and technology helps to ensure underground source drinking water remains safe during the well life.

▪SmartCare services’ 14-point checklist of environmental, toxicological, and physical categories evaluate chemical components. This is a scientific protocol for assessing and comparing potential product hazards within regulatory guidelines, enhancing limited regulations, or establishing a benchmark when regulations do not exist.

Benefits:• Enhanced environmental stewardship without sacrificing performance• Clear identification of environmental impact and risk• Optimized, systems and additives combined to meet exact reservoir conditions• Quantifiable and standardized method of comparing chemical components• Verified compatibility among qualified productsFeatures:• Credible scientific third-party protocol to evaluate human health, safety and environmental impact• Methodical evaluation of products and systems for performance, compatibility, and cost-

effectiveness for optimal fracturing and stimulation

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Cabot - Susquehanna County, Pa.

▪ The Baker Hughes Rhino™ Bifuel Frac pumps were able to replace as much as 70% of the engine’s diesel fuel supply with natural gas with no loss in hydraulic horsepower. Baker Hughes provided an entire fleet of 14 Rhino Bifuel pumps to stimulate the 10 wells and 170 stages in Susquehanna County, Pa.

▪ The field gas was piped in from some of the customer’s producing wells to a gas processing unit (GPU) near the fracturing

pumps. The GPU removed water and other impurities from the field gas to avoid engine performance problems. Upon reducing gas pressure, the gas was piped to a manifold and distributed to the Rhino Bifuel pumps.

▪ Wellsite emissions: – 50% reduction in nitrogen oxides– 70% reduction in particulate matter– 100% reduction in carbon monoxide

▪ The substitution of cleaner-burning natural gas for diesel lowered the wellsite’s emissions considerably. Cabot calculated the use of the Baker Hughes Bifuel fleet allowed it to offset about 110,000 gal of diesel and save a substantial amount in fuel costs.

▪ The Bifuel pumps allowed the operator to significantly reduce the number of diesel resupply runs, simplifying logistics and

reducing the amount of traffic at the wellsite and through neighboring communities. HSE risks related to refueling operations also were minimized.

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Bifuel equals Dual Fuel– Blending diesel fuel and natural gas in the combustion chamber– No loss of Hydraulic Horsepower– Up to 70% substitution of diesel– Requires low pressure natural gas supply (2-5 psi) @ about 8 scfh/kW

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Supply Manifold and Gas Train

FilterDual SolenoidShutoff Valve Low Pressure

Regulator

Manual Valve Regulator

Methane Detector

Regulator

Supply Line

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Rhino Bifuel Pumps

▪Converted from the current Rhino™ pump

– 2,250HHP/15,000 psi

▪No compromise to HHP and/or frac performance vs. diesel pumps

▪Exceeds all U.S. EPA emission standards– Carbon Monoxide (CO): Effectively zero output

– Nitrogen Oxides (NOx): Up to 50% Reduction

– Particulate Matter (PM10): Up to 70% Reduction

▪Substitution rates as high as 70/30

▪Fuel flexibility

– LNG, CNG, or line/field gas

– 100% diesel (when needed)

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Increases Efficiency, Reduces HSE Risks

▪Bifuel pumps can operate continuously twice as long as diesel-powered pumps

▪Hence– Reduces “hot fueling” by over 50%– Minimizes spill & fire risks– Improves efficiency

of frac operations – Reduces number of fuel trucks

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The Value of the BiFuel Service

▪Helps meet regulatory requirements on gas emissions

▪Reduces global carbon footprint

▪Minimizes spill and fire risks (eliminates hot-fueling)

▪Simplifies logistics

▪Potentially cuts flaring activities

▪Promotes natural gas consumption

▪Improves industry image

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14 Bifuel frac pumps, 10 well heads

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Spill Mats and vacuum connection

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Dryer skid, odorizer and distribution manifold

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Clean & Simple Rig up on Natural Gas Hoses

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Conclusion

• BHI completed 170 stages on 10 wells in 27 “Perfect Days”• Used SmartCare products to help protect the environment• 50% reduction in nitrogen oxides• 70% reduction in particulate matter• 100% reduction in carbon monoxide • Replaced 110,000 gallons of diesel with natural gas

Communicating Operations – Connecting your content

with your audience

George StarkDirector, External AffairsCabot Oil & Gas Corporation

Process• Defining your audience & goals

• Understand your topic

• Putting things into perspective

• Choosing the best way to communicate

Defining Your Audience & Goals

Who do I want to communicate with…

LANDOWNERS EMPLOYEES INVESTORS

REPORTERS ENVIRONMENTALISTS COMMUNITY MEMBERS

STUDENTS SHAREHOLDERS ANGRY PUBLIC

ELECTED OFFICALS INDUSTRY MEMBERS CONTRACTORS

…and what do they want to know?

• The story may be the same, but the points of focus will differ

• What your landowners may care about most in your story will not always be the same as what your employees care about

• No matter who you are talking to, if they do not find value in it they will not listen

• Irrelevant information can convolute the message

• Determine how you can look at your story from different angles

Cabot & Baker Hughes Partner to use natural gas completions fleet to fracture

10-well pad

• 10-well pad has incredible production

• Utilized natural gas which means cost savings

• Natural gas is cleaner burning vs. diesel

• Less trucks of diesel on the road refueling during ops

• First use of entire natural gas fleet for Cabot

• Cabot will move towards more natural gas production

Understanding Your Topic

• Versus being looped in at the end you…

• Will have a better grasp of the overall topic

• Can start to think in terms of communicating with different audiences from the beginning

• Can identify areas on which you’ll need more background info

• Can start shaping messages early and make sure you remain consistent

• Get approved numbers/specs to work with early on in the process

Work closely with operations individuals from the beginning

• Research

• Has anyone done something similar before?• YES

• How did they do it? • What worked/didn’t work? • What new ideas can you bring to this topic?• How can you build off of this in the future?

• NO • How can you make this stand out? • What are your important messages? • How can you build off of this in the future?

Look to see how others communicated similar ideas or stories

Putting Things Into Perspective

• Combine all of your research• You know what your topic is, what’s important, what you

want to make sure you talk about• You have identified the audiences you want to target

Simply put: Step 1 + Step 2 = Step 3

Information

Target Audience

Communication

Approach

• What do you want the takeaway message to be?

• What kind of format will best reach your audience?

• How do you break down information in easy-to-understand pieces?

• Will it spark interest in them?

• Will they then use it to spark interest in others?

Think like your audience

• Topic:• Cabot produces 1 BCF of natural gas per day out of the

Marcellus operations*

• Audience: • General public – elected officials – students – landowners

• Communications approach: • Put the production numbers into something easy to

understand.

What is 1 BCF of gas?

*1.5 BCF as of 12/13

What is 1 BCF of gas?

Cabot & Baker Hughes Partner to use natural gas completions fleet to fracture

10-well pad

How else do you communicate topics?

Channels to communicate

Some stats to consider:

• What kind of audience are you reaching with your traditional media outreach?

• Newspaper • More than circulation, what are the demographics?

• Trade magazines• Is this reaching your targeted audience?

• Radio interviews• Is there someone out there who cares?

• Direct mailers• Are they hitting the geographical area you need?

But it’s not just social media…

•Define your audience & goals

•Understand your topic

•Put things into perspective

•Choose the best way to communicate

QUESTIONS?