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Statoil Unconventional Gas Press BriefingAugust 25, 2010

Stavanger, Norway

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Agenda• What is unconventional gas?

• How is shale gas produced?

• Where is unconventional gas located?

• Why did Statoil invest in North American shale gas?

• Current status: Statoil’s JV with Chesapeake

• Next steps in Statoil’s unconventional gas journey

• Q&A

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What is unconventional gas?

• Many different types of unconventional resources

• Low permeability and porosity -difficult for gas and liquids to flow through it

Shale outcrop, Marcellus, New York

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Source Chesapeake Energy

How is shale gas produced?

• To reach the deep target gas, a normal well is drilled

• The bore is extended laterally to create a horizontal well

• The well is hydraulically fractured, allowing gas to flow

• At the surface gas enters pipelines that take it to market

• The well produces for 40 years

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How is shale gas produced?

A producing well pad

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How is shale gas produced?

A Frac Site

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EuropeResource: 145 tcfProduction: 0.0 bcfd

EuropeResource: 145 tcfProduction: 0.0 bcfd

AustraliaResource: 78 tcfProduction: 0.64 bcfd

AustraliaResource: 78 tcfProduction: 0.64 bcfd

Latin AmericaResource: 13 tcfProduction: 0.04 bcfd

Latin AmericaResource: 13 tcfProduction: 0.04 bcfd

AsiaResource: 203 tcfProduction: 1.32 bcfd

AsiaResource: 203 tcfProduction: 1.32 bcfd

AfricaResource: 83 tcfProduction: 0.0 bcfd

AfricaResource: 83 tcfProduction: 0.0 bcfd

Shale Increasing Attracts Investment Dollars

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Perc

ent o

f L48

CA

PEX

All Other PlaysShale Plays

North AmericaResource: 1,348 tcfProduction: 28.3 bcfd

North AmericaResource: 1,348 tcfProduction: 28.3 bcfd

Middle EastResource: 25 tcfProduction: 0.0 bcfd

Middle EastResource: 25 tcfProduction: 0.0 bcfd

Where is unconventional gas located?

Source: WoodMac

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Where is unconventional gas located?

Source: U.S. Department of Energy

U.S. Shale Gas Basins

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Why did Statoil invest in North American shale gas?

$3.38 $3.63 $3.68 $3.74 $3.79 $3.89$4.59

$5.04 $5.16 $5.30

$6.47 $6.48 $6.78 $6.86

$8.05

$8.87

$10.26

$3.08$3.43

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

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e Was

h Hori

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Haynesv

ille (C

ore)

Marcell

us H

oriz.

HuronBarn

ett (C

ore)Fay

ettev

illePine

dale A

nticli

ne

Haynesv

ille (E

. TX)

Wood

ford

UintaPice

ance

Marcell

us (V

ert.)

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alley

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dsU.S

. Ave

rage

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xtn.)

$ per MMBtu

Marcellus – low break evens

Source: Barcap

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Why did Statoil invest in North American shale gas?

Transforming the world’s biggest energy market:•Energy independence•More viable energy mix•Job and wealth creation for thousands of Americans

0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Conventional Shale Tight CBMSource: Wood Mackenzie

bcfd

US Gas Production by Type

Source: WoodMac

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Why did Statoil invest in North American shale gas?

Strategically positioned

• US unconventional industry is established

− Liquid market

− Existing industrial infrastructure

• Marcellus - world class shale play

− 7420 bcm of recoverable resources (US DoE)

− Attractive break evens

− Close to market and pipeline capacity

New York

Marcellus Area

Cove PointRe-gas terminal

Gulf of Mexico

Pipeline to Canada

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Current status: Statoil’s JV with Chesapeake

• JV with Chesapeake

• Organisation in place

• 50,000 boe/d in 2012

• Now 300,000 mcfd(44,000 boepd)

• 26 rigs in operation

• 118 wells

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The central importance of HSE

• Chesapeake proven track record

• Standards above and beyond

• Aligned on regulation, water management, testing and the disclosure of additives

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Next steps in Statoil’s unconventional gas journey

• Early entrant

• Learn and prepare

• Build infrastructure and competence

• Become a professionalunconventional operator

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Statoil Unconventional Gas

John KnightSenior Vice President, Global Unconventional Gaswww.statoil.com

Thank you