PENN STATE EXTENSION WEBINAR MARKETING AND LOGISTICS OF NATURAL GAS LIQUIDS IN THE APPALACHIAN BASIN Nov. 17, 2016 THE RUN DOWN AGENDA ▸ Development of the Appalachia shales ▸ Natural Gas Liquids (NGLs) ▸ Advent & growth of NGL transportation options ▸ Broad overview of NGL markets and end uses 400 MILLION YEARS IN THE MAKING DEVELOPMENT OF THE APPALACHIA SHALES US SHALE PLAYS IN BRIEF THE BIRTH OF MARCELLUS NGL PRODUCTION ▸ First commercial shale: Barnett in North Texas ▸ Pennsylvania was “drilled up” ▸ First commercial Marcellus well: Nov 2004 ▸ Originally planned for dolomite (not shale) target ▸ First Marcellus gas processing plant: Dec 2008 ▸ C3+ fractionation (purity NGLs): 2010 STACKED IN OUR FAVOR PITTSBURGH REGION THE VERTICAL PORTION IS THE “FIXED COST” THE WELLS Old Current 2400’ lateral 5000’+ lateral 8 frac stages 25+ frac stages S H A L E APPALACHIA SHALE ECONOMICS ARE FORMIDABLE PRODUCTION TODAY PRODUCTION IS AN ARTIFACT OF PAST DRILLING EFFORTS PRODUCERS PRODUCE BAKER HUGHES INTERACTIVE MAP MARCELLUS/UTICA ACTIVE HORIZONTAL RIGS