Find out more about... Hydraulic fracturing (fracking)

Did you know?

Both state and federal government in Australia strictly

regulate fracking and fracking fluid.

Fracking has been used in Australia for over 50 years

without incident.

Fracking fluid contains 99 per cent water and sand and only small

quantities of common chemicals1.

Fracking was first used commercially in the U.S. in 1949.

Fracking is a proven and accepted technology used worldwide to make oil and gas wells more productive.

A U.S. EPA report on fracking concluded that it “poses little or no threat to underground sources of drinking water”2.

+ Hydraulic fracturing is a proven technology used globally for over 60 years.

Santos Sustainability Report 201322

Understanding hydraulic fracturingHydraulic fracturing has been used since 1947 to enhance the permeability of hydrocarbon reservoirs. We have used fracture technology in the Cooper Basin for nearly 50 years without incident.

Wells are constructed to best industry practice, linedwith steel casing and cemented in place to isolateaquifers overlaying the reservoir. Pressure tests ofcasing and cement are conducted prior to fracturestimulation to guarantee the integrity of the well.

Well integrity

Fluid is pumped into the well at high pressureand forced through perforations to createfractures. Sand stays in the reservoir to keepthe fractures open, allowing the gas to �ow through to the well.

Hydraulic fracturing process

Geological integrityThe length of a fracture is carefully monitored.Santos measures downhole pressure data onsite, in real-time, to ensure the fracturing process pressuresignature matches planned modelled pressures.

The majority of fluids are recovered and any waste isdisposed of appropriately. Any fluid that remains in thereservoir post completions process will be recoveredduring normal production.

Waste water treatmentand recovery

Confining layers

Confining layers

Schematic: not to scale

Production zone

Aquifer

Conductor casing and cement

Surface casing and cement

Intermediate casing and cement

Production casing and cement

Fracturing can be conducted circa 500 to 3,500 metresbelow the surface

What is hydraulic fracturing?Hydraulic fracturing, or fracking, is used to increase the flow of oil or natural gas from a well. It has been used safely around the world since 1949 in over two and a half million wells3.

Santos has used fracking to produce oil and gas in South Australia and Queensland for nearly 50 years. It has also been used in other industries to increase the flow of water wells or to clean up hazardous waste sites4.

In over 60 years of operations, there has not been one proven case of water contamination as a result of fracking5. Studies in the United States6, United Kingdom7 and here in Australia have concluded that fracking can be undertaken safely.

How does hydraulic fracturing work? A well is drilled into an underground layer that contains oil or gas. The well is surrounded by steel and concrete to ensure there is no link between the oil or gas layer and other underground layers, such as aquifers.

Fluid is pumped into the layer containing oil or gas at high pressure. The pressure of the fluid fractures the layer to produce tiny cracks. The fluid contains sand, which remains underground to hold open the tiny cracks. This creates pathways for oil or gas to flow more easily, increasing the productivity of the well.

The rest of the fluid is pumped back to surface and stored in specially designed dams or tanks. The fluid is then reused in hydraulic fracturing, treated or disposed at an approved facility.

Why do you need to use fracking?Fracking enables extraction of oil and gas trapped in tight underground layers that were not previously accessible. In this way, the increased use of fracking is providing more energy to meet growing global demand and keep prices reasonable for consumers.

Because fracking increases the flow from a well, it also means fewer wells need to be drilled to deliver the same amount of oil or natural gas. This is good news for landholders and for the environment.

See next page for industry references to more information

Santos and frackingSantos has been fracking wells in Australia safely for almost 50 years. Most of these wells have been conventional oil and gas wells. Contrary to popular misconceptions, fracking is not widely used in Coal Seam Gas (CSG). Of the 1,844 CSG wells drilled in Australia over 15 months during 2012 and 2013, only 6 per cent were hydraulically fractured.10

At Santos, we’ve used fracking to prolong the life of depleted reservoirs in the Cooper Basin. In NSW, the CSG underpinning the Narrabri Gas Project is unlikely to require fracking. Horizontal drilling is the preferred method of developing NGP coal seams.

How is underground water protected?According to the CSIRO, groundwater contamination from fracking fluids is considered a low risk8.

The underground layers containing gas are geologically separated from other underground layers and all wells are surrounded by steel and concrete. This ensures no movement of fracturing fluid into aquifers.

Even in the highly unlikely event that there was some connection between fracturing fluid and an aquifer, the CSIRO concludes that the risk of contamination would be minimised because during production water would flow away from the aquifer and towards the well9.

TAS

VIC

NSW

QLD

SA

NT

WA

Australian Gas Reserves – conventional, unconventional & coal bed methane

What’s in fracking fluid?Fracking fluid is 99 per cent water and sand. A very small amount of chemicals are also used to reduce friction, remove bacteria, dissolve some minerals and improve the transportation of sand.

The chemicals are not unique to the oil and gas industry and are found in many household products such as toothpaste, baked goods, ice cream, food additives, detergents and soap.

Detailed information about the chemicals used in Santos’ operations is available at www.santos.com/coal-seam-gas/hydraulic-fracturing.aspx.

90%

9.5%

0.5%

Water

Sand

Chemical additives

Registered and Head Office Ground Floor, Santos Centre 60 Flinders Street Adelaide South Australia 5000

GPO Box 2455 Adelaide South Australia 5001

Telephone: 61 8 8116 5000 Facsimile: 61 8 8116 5050 www.santos.com

Santos – an Australian PioneerAn Australian energy pioneer since 1954, Santos is a leading oil and gas producer, supplying Australian and Asian customers. With over 3,000 employees across Australia and Asia, Santos’ foundations are based on safe, sustainable operations and working in partnership with host communities, governments, business partners and shareholders.

Industry references1. What is hydraulic fracturing?, CSIRO, 2012

2. Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs, US EPA, June 2004a

3. Hydraulic fracturing 101, Society of Petroleum Engineers, 2012 (http://www.kgs.ku.edu/PRS/Fracturing/Frac_Paper_SPE_152596.pdf)

4. A Citizen’s Guide to Fracturing, US Environmental Protection Agency, 2001

5. Just the facts, Energy In Depth, 2015 (http://energyindepth.org/just-the-facts/). The US Department of the Interior, US Environmental Protection Agency and regulators in 11 US States have confirmed no proven water contamination from hydraulic fracturing.

6. Hydraulic fracturing 101, Society of Petroleum Engineers, 2012 (http://www.kgs.ku.edu/PRS/Fracturing/Frac_Paper_SPE_152596.pdf)

7. Shale gas extraction in the UK: a review of hydraulic fracturing, Royal Society & Royal Academy of Engineering, 2012 (https://royalsociety.org/~/media/policy/projects/shale-gas-extraction/2012-06-28-shale-gas.pdf)

8. Frequently asked questions on coal seam gas extraction and fracking, GISERA (CSIRO & APLNG), 2011 (http://www.gisera.org.au/publications/faq/faq-csg-extraction-fraccing.pdf)

9. What is hydraulic fracturing?, CSIRO, 2012

10. Hydraulic fracturing background review, Australian Department of Environment, June 2004.

Interested in learning more about natural gas?Visit santos.com for more fact sheets on a wide range of gas-related topics.