YATES PETROLEUM YATES PETROLEUM CORPORATIONCORPORATION

PRODUCED WATER PILOT PRODUCED WATER PILOT PROJECTPROJECT

HISTORY OF THE PROJECTHISTORY OF THE PROJECT

100,000 + bbls/day of Produced Water100,000 + bbls/day of Produced Water

Down hole injection only available disposal Down hole injection only available disposal methodmethod

VISIONVISION

GOALS FOR THE PROJECTGOALS FOR THE PROJECT

Find an economic alternative to down hole Find an economic alternative to down hole disposal disposal

Planned vs. Crisis Management of SWD Planned vs. Crisis Management of SWD assetsassets

Above Ground System – serviceableAbove Ground System – serviceable

Stay within regulatory guidelinesStay within regulatory guidelines

CHALLENGESCHALLENGES

Regulatory Constraints Regulatory Constraints New Mexico Oil Conservation DivisonNew Mexico Oil Conservation Divison

Disposal Site?Disposal Site?

Water Quality-<9,000 Total Dissolved Water Quality-<9,000 Total Dissolved SolidsSolids

Proven Process? – Large VolumesProven Process? – Large Volumes

LocationLocation

PILOT CONSTRUCTIONSPILOT CONSTRUCTIONS

Process Selection – ProprietaryProcess Selection – Proprietary

Site SelectionSite Selection

Permit AcquisitionPermit Acquisition

Environmental AwardEnvironmental Award

ENVIRONMENTAL MERIT AWARDENVIRONMENTAL MERIT AWARD20022002

Awarded to:Awarded to:

YATES PETROLEUM CORPORATION

CONSTRUCTION COMPLETECONSTRUCTION COMPLETE

PROJECT STATUSPROJECT STATUS

Limited SuccessLimited Success

Product DevelopmentProduct Development