ByR.Combs,R.Boans–HFNRC.Chavez,E.J.S.Graham–EMNRDOCD

GWPCNewOrleans,LASeptember12,2018

RefineryWastewaterReuseandFreshWaterPreservationinNewMexicotoSupportOilfieldProduction

HollyFrontierNavajoRefining

*  HollyFrontierNavajoRefining*  Beganin1920s*  HollyCorp1969

*  HollyFrontierCorporation*  OneoffiveHollyFrontier

refineries*  Totalrefiningcapacityof

460,000bpd*  HeadquarteredinDallas,TX

*  Navajo–Artesia/Lovington*  100,000bpdcrudecapacity*  LocalPermiangathering

PublicPolicyinNM:https://ballotpedia.org/Fracking_in_New_MexicoBakerHughesRigCount-http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother

Artesia

Artesia

*  Permitting*  POTW–Citiesof

Artesia&Lovington*  NMEnvironment

Department*  NMOfficeofState

Engineer*  OilConservation

Division

RefineryRegulatory

RefineryandOilfieldActivityLocation

*  Aridlocation*  AnnualAverage

Rainfall*  Limitedsurface

waterfordemands

*  Limitedfreshwaterrights*  Competingdemandforwater*  Municipal*  Agriculture*  Oilfield

*  Heavilydependentonwater*  Integratedprocesses*  Internalrecyclestreams*  RefineryPerformance*  Evaluatingfurtherreuseoptionstoimproveefficiency

RefineryWaterUse

MakeupWater

RefineryDisposalOptions

Refinery

CrudeOil

WaterMake-upCityofArtesia,

OSE

RefinedProducts

POTWCityofArtesia

UICWells

OCD

WaterSales

BenefitsofReuse

*  E&P*  Reducecosts*  Pipeline/ContinuousDelivery*  Preservefreshwaterresources*  Refinery*  Longevityforrefinery*  Newpartnerships*  Revenue

OilfieldDemand

*  OilandGaswelldrillingfluids*  Hydraulicfracturing*  Downholeoperations

*  Volumes:*  1.1MG/well(EddyCty)–avgfracvolume

Artesia

OCDOnline:http://www.emnrd.state.nm.us/OCD/education.htmlBakerHughesRigCount:http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother

*  Demand–willthetrendcontinue?

*  Refineryliability*  Waterquality

*  Veryconsistent*  Discharge–Batchoperation*  Regularqualitytesting

*  Delivery*  Plantupset,mechanicalfailure,etc.*  Weather

*  ContractsandProcurement*  Definepurchaserresponsibilities*  Payment

*  PurchaserResponsibilities*  Partnerswithgoodpracticesand

financials*  Brokertothirdparties*  Commitment

ReuseConsiderations

*  Duediligenceofpurchaser*  Regulatory*  NMOCD*  Permitting*  Oilfieldnon-exemptnon-

hazardouswastewaterstream

*  CityofArtesia*  OSE

*  Contracts

RefineryEvaluationandTasks

*  Regulatory-Purchaser*  Managingrefinerywaste

stream*  NMOCD*  Permitting–Reuse/Recycling*  Reporting*  ReleaseNotification*  Investigation/cleanup

*  Disposal*  Rightsofway–surfaceaccess*  Deconstruction/demobilization

PurchaserResponsibilities

InSummary

*  Beneficialreuseprogram*  Pollutionandwasteminimization*  ImplementationFormoreinfo,contact: RobertCombs–HollyFrontierNavajoRefiningLLC

robert.combs@hollyfrontier.com,575-746-5382 CarlChavez–EMNR–OCD CarlJ.Chavez@state.nm.us,505-476-3490