Liquid Petroleum Gel (LPG) Fracturing

Presented by:Shannon Mendoza, Mong Dao, Charles Heldridge, Frances Carter, Josh

Johnson, Steven Reese

Olympia EnergyMaking energy better.

Protect new energy production Barnett Shale gives stable resource Prevent water contamination and ground destabilization

LPG Fracturing

Tim, Christine, and their 10-year-old daughter Reilly

Lived in Wise County, Texas, for 6 years

On Sept. 16, 2009, lives turned upside down

Aruba Petroleum started to drill 2 wells on property

The Ruggieros

Tim – loss of feeling in his extremities Christine – skin rashes, nausea, and

some memory loss Reilly – diagnosed with asthma

The Ruggieros’ Health

Drinking water contaminated Some say just buy fresh drinking water,

but they raise horses also Horses have to drink from local supply,

which may cause long term health problems

The Ruggieros’ Water

Located in the Fort Worth Basin

Discovered in the 1950s Estimated to hold 30 trillion

cubic feet of natural gas Commercialized in the late

1980s

Barnett Shale

Oil Production vs EarthquakesNatural Gas Production at Barnett Shale

From 1993 to 2013

Year

1997 2002 2004 2006 2008 2009 2011 2012 20130

5

10

15

20

25

30

35

40

Number of Eathquakes at The Barnett Shale Affected Counties From 1997 to 2013

Year

Nu

mb

er o

f E

arth

qu

akes

Source: The U.S. Geological Survey and City-dataSource: Texas Railroad Commission Production Data Query System

Hydraulic Fracturing Water Cycle

Arsenic levels exceeded federal limits

Highly concentrated heavy metals in water near the wells

Some are radioactive

Source: environment and science technology

Water Contamination Level at Barnett Shale

LPG Fracturing

Liquid Petroleum Gel No water used

◦Saves 3.5 million gallons/well LPG fracturing replaces water with gel

Problems Solved

Water contamination◦No water contaminated during process◦No water disposal

Earthquakes◦Disposal wells eliminated

Advantages Created

No water necessary Easily reusable (unlike water) No disposal required

Project Supervisor Andrew Shultz, Olympia Energy senior

regional manager for the DFW area 30 years of experience Oversee transportation of LPG wells Oversee installation of LPG wells

Based in Canada Started in 2007 Uses patented waterless Liquid Petroleum

Gas gel◦Yields higher reservoir production◦Eliminates concerns over water use in

fracturing Recently made headway in the Eagle Ford

shale of South Texas

Partnership with GasFrac Energy Services, Inc.

Human Resources GasFrac is providing 2 senior engineers

◦ Each with 25+years of experience Will help Mr. Shultz with the installation of

LPG wells Will give a formal training program to our

employees◦GasFrac’s LPG wells are designed for LPG

fracturing, not adapted

Installing LPG Wells 40 workers per well needed to uninstall

hydraulic and reinstall LPG 4 wells from GasFrac 160 workers total Project is estimated to be completed in 3

months

Community Impact Olympia Energy’s transition to LPG

fracturing will improve environmental and living conditions in energy affected areas

Protect Employee Livelihood◦Employees will take pride in their work◦Bettering the environment◦Protecting the people of DFW

Will provide:◦Drilling equipment◦Field engineers◦Patented LPG technology and training

In return:◦Provide entry into Barnett Shale◦Percentage of revenues

Partnership with GasFrac Energy Services Inc.

Revenue: $20 million Operating Expenses: $15 million Average cost per well: $2.38 million Net income: $5 million

Olympia Energy Financials, 2013

Replacing 4 hydraulic fracturing wells◦$12 million

Retraining current employees◦$3 million

Total cost: $15 million◦Does not include yearly operating expense◦Total expenses estimated to be over $30

million

Cost of Switching

1st year of operation: $4 million in net income

GasFrac’s Net Income

2008 2009 2010 2011

-4000000

-3000000

-2000000

-1000000

0

1000000

2000000

3000000

4000000

5000000

6000000

GasFrac's Net Income from 2008-2011

Year

Net Income

Hydraulic fracturing contaminates the water it uses with harmful chemicals

Cabot Oil & Gas reported spending $109,000 on systems to remove methane from well water for 14 households

Taxpayers receive biggest burden

LPG fracking avoids this issue

Community Impact

We request $15 million from the Chamber of Commerce to cover:◦$12 million in construction costs◦$3 million in retraining costs

We will cover operating expenses totaling an additional $15 million

LPG gel has no additional long-term cost in comparison to hydraulic methods.

Benefits to the DFW area will more than compensate for initial costs.

Proposal Summary

LPG fracking will:◦ Eliminate water contamination◦ Prevent fracking-related earthquakes◦ Produce natural gas efficiently

Partnership with GasFrac will aid transition

Proposal Summary

Oil and Gas Journal, (2014). Barnet Shale. Retrieved from:

http://www.ogj.com/unconventional-resources/barnett-shale.html

Texas Rail Road Commission (2014). Barnett Shale information. Retrieved from:

http://www.rrc.state.tx.us/barnettshale

Fontenot, B., Hunt, L., Hildenbrand, Z., Carlton , D., Oka, H., Walton, J., Hopkins, D.,

Osorio, A., Bjorndal, B., Hu, Q., and Schug, K. (2013). An Evaluation of Water

Quality in Private Drinking Water Wells Near Natural Gas Extraction Sites in the

Barnett Shale Formation. Environnemental Science Technology, 47 (17), pp

10032–10040. DOI: 10.1021/es4011724

References