Recycling and Conservation

May 22, 2014

Kieran Barrows – Facilities Engineer Chip MacLaughlin – Water Resource Engineer

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Not to scale Represents ~5,000 ft

Stratigraphic Display of 4 Stack Development

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Integrated Water Resources/Facility

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4 Stack Pad and Facility Layout

Water

LP Gas

Oil

3 Phase FWKO

3 Phase Heater Treater LP Gas

Oil

Water

LP Gas

HP Gas for GL ~1100 psig LP Fuel Gas ~150 psig

Well Well Future Well

Future Well

Future Well Well Well

Future Well

Metered GL gas Well Pad

LP Fuel Gas to Rig ~150 psig

Metered GL gas

LP Fuel Gas to Rig ~150 psig

Well Pad

Oil

Intermediate Pad

To Central Tank Battery

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Typical Production Corridor

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Water Resource Requirements for 4 Stack, 4 Rig Development Corridor

Average Frac Rate (per well): 100 bbl/min

Total Water Used (per well): 300,000 bbl

Average Drill Time (per well): 25-30 days

7500’ Laterals

1 Rig for 4 Stack Lateral Water Usage:

1.2 MM bbl/month/pad

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Water Sources:

Brackish Waters Flowback water Produced Water Fresh Water

GOAL:

A 50% reduction of fresh water usage by 4Q 2016.

Recycle Water Availability

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

0 4 8 12 16 20 24 28 32 36 40 44 48

BB

L o

f Fr

ac W

ate

r

Month

4 Drilling Rigs - 4 Fracs per Month

Flowback Water Recovery Other Water Sources

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75,000 BPD at Capacity

34 Acres 75,000 BPD via 12” pipeline

and truck unloading 825 HP pumping capability Qty. 3 – 300,000 bbl double

lined pits with leak detection SCADA connected Water treating to slick water

frac standards

Recycle Plant Treatment Facility

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Closing Thoughts

Laredo is striving towards the goal of 100% use of flowback and produced water for drilling and completing operations.

To achieve a sustainable water supply system to support exploration and production efforts, water resources must be viewed in an integrated fashion, including

Development of water pipelines in production corridors

Connection of multiple high volume frac pits across large production areas

Recycle facility connectivity to production corridors

Development of non-potable water resources