1

Generate the Hydraulic Pressure

• 8,000 foot vertical depth well with 14,000 feet of measured depth.

• Fracturing fluid is fresh water. • 5 ½ inch monobore well casing. • Injection rate is 80 barrels (12.7m3) per minute.

2

Generate the Hydraulic Pressure

• Typical shales require 0.8-1.1 psi per foot of vertical depth to fracture. • With a fracture gradient of 0.9 psi/foot then 7,200 psi at

the formation is required. • The hydrostatic pressure of the water based fluid helps.

Just the water exerts 3,464 psi. • This leaves 3,736 psi required at the surface to pump the

fractures open. • However, friction from the drag of the water along the walls of

the steel well casing increase this pressure. • Water only would generate 725 psi per thousand feet of

pipe or 10,150 psi. • With friction reducer this would be about 215 psi per

thousand feet of pipe or 3,010 psi. • Pumping surface pressure is 7,200-3,464+3,010=6,746 psi.

3

Friction Pressure

4 4 Stage 1 – 11,568 bbl, 101.1 metric tons prop

5

This is not a frac rig!

6

Early Frac Pumps

• 1955 frac pump manufacturing. Remote controlled pumps powered by war surplus 1,475 horsepower Allison aircraft engines

JPT – December 2010

7

• Up to 20,000 psi and 2,500 bhp per pump • Triplex and quintuplex positive displacement pumps • Cummins QSK50-60, MTU 12V4000 and Caterpillar 3512C

most common engines • Allison, Caterpillar and Twin Disc transmissions

Modern Frac Pumps

Cat 3512C engine, Cat TH55 eight speed transmission, FMC WQ2700 quintuplex pump Weir-SPM Destiny TWS 2500 Pump

8

Frac Pumps in the UK – 1990s

• First started in UK in 70’s • Over 200 fracs performed on-

shore in the UK

Multi-stage, gelled water frac,

Cheshire, UK 1992

• Detroit 12v 149TI, Allison Transmission, Triplex pump, 1,200 horsepower

9

Frac kit availability

• North American frac fleet between 18 and 19 million hhp • Over 8,100 frac pumps with an average age of less than 5

years • European frac fleet - main players have about 114,000

hhp

10

Frac Suite on Preese Hall-1

11

Hydraulic Fracturing in Poland

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Hydraulic Fracturing in USA

13

Frac Boats in the North Sea

14

• Economics

15

Growing gas import gap

Indigenous gas production supplies a

decreasing share of UK demand

(Source: Department of Energy and Climate Change)

16

UK Energy – Electricity vital but only 20% of energy demand

The challenge is much more than “Keeping the Lights On”

Data Source – Dept. of Energy & Climate Change

From 2011 to 2012 Electricity Generation increased coal use from 29.5% to 39.3% And decreased gas use from 39.9% to 27.5%

Renewables 9.4%

Gas 39.9%

Nuclear 18.8%

Oil 1.0%

Coal 29.5%

Other 1.5%

2011 Shares of Electricity Generation

Renewables, 14.8%

Gas, 26.8%

Nuclear, 19.8%

Oil, 0.7%

Coal, 36.3%

Other, 1.5%

2013 Shares of Electricity Generation

17

18

55% of gas goes to heat and industry

• 36% gas goes to

heat

• 36% of gas goes to

electricity and

associated uses

• 19% to industry and

other final customers

• 9% other

(Source: Department of Energy and Climate Change)

19

Current Fuel Mix for National Electric Grid

(Source: http://www.gridwatch.templar.co.uk/)

05 May 2014

20

Growing gas import gap

Indigenous gas production supplies a

decreasing share of UK demand

(Source: Department of Energy and Climate Change)

21

Send Billions of £ to the exporters or…:

(Source: IoD calculations)

Potential contribution from Shale

22

On-Shore Gas Industry

• Meaningful unsubsidized private investment

– (Bowland alone £50B through 2039)

• Meaningful job creation (74K at peak)

• Meaningful energy security contribution

• Green completion standards

• Small industrial footprint

(Source: IoD calculations)

23

Community benefits

• Local authority to receive 100% of business rates

• Communities receive £100,000 for every exploration well

site that is hydraulically fractured

• Communities receive one per cent of revenues from future

shale gas production – Potentially, more than £1 billion over a 20 to 30 year shale gas production

timescale could be returned to Lancashire communities within the Bowland

Basin license area alone

• The above is (broad brush) paid 2/3 locally, 1/3 to the

county (many specifics to be worked out)

24

Thank you