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Dear royalty owner,
WELD COUNTY
In recent weeks, we've continued to see significant media coverage surrounding COMMISSIONERS
America's relatively new abundance of energy from shale, particularly regardingle vier A II: 02
and proven practice of hydraulic fracturing. Though it is encouraging to see the Mibilit
taking a real interest in the vital role that energy plays in all of our lives, it is p
disheartening to see these transformational shale opportunities that create jobs, bole•CE I V E D
our nation's struggling economy, enhance our energy security and offer a cleaner
alternative, continue to fall victim to political misrepresentations.
Much of the recent coverage centers around a draft report from the U.S. Environmental
Protection Agency (EPA) on water contamination near the town of Pavillion, Wyoming.
Although we have no operations in the area, we believe it is important to understand the
scientific story in Pavillion so as not to be misled by irresponsible journalism and
political activism. Most do not dispute that water contamination has occurred in the small
community. However, no one knows the cause, and the work by the EPA failed to
provide clarity. Wyoming Governor Matt Mead has called the EPA's study "scientifically
questionable," while others have voiced even stronger criticism calling it, "shoddy
scientific analysis."
Encana, the company that operates near Pavillion, issued the following response to EPA's
report:
• The EPA report ignores well-known historical realities with respect to the Pavillion field's
unique geology and hydrology.
• The EPA drilled two deep monitoring wells(depth range: 783—981 feet)into a natural gas
reservoir and found components of natural gas,which is an entirely expected result.The results
in the EPA deep wells are radically different than those in the domestic water wells(typically
less than 300 feet deep),thereby showing no connection.Natural gas developers didn't put the
natural gas at the bottom of the EPA's deep monitoring wells,nature did.
• There is unacceptable inconsistency between EPA labs' analysis for numerous organic
compounds reported to have been found in the EPA deep monitoring wells.Data is not
repeatable and the sample sets used to develop these preliminary opinions are inadequate.
• Several of the man-made chemicals detected in the EPA deep wells have never been detected in
any of the other wells sampled.They were,however,detected in many of the quality control
(blank)samples—which are ultra-purified water samples commonly used in testing to ensure no
contamination from field sampling procedures.These two observations suggest a more likely
connection to what it found is due to the problems associated with EPA methodology in the
drilling and sampling of these two wells.
• The EPA's reported results of all four phases of its domestic water well tests do not exceed
federal or state drinking water quality standards for any constituent related to oil and gas
development.
Perhaps most striking in our view is that EPA issued the report before subjecting it to
scientific peer review.
Anadarko strives to be on the forefront of responsible and prudent operations. Our teams
have been directly involved in authoring the recent report from the National Petroleum
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Council, which recommended Regional Councils of Excellence to ensure best practices
are implemented on a regional basis to enhance our industry's excellent environmental
and safety record. We continue to work with state and regional regulators, as well as
, Qtheratakehplders and peer companies, to develop recommended standards and practices.
We were also instrumental in the creation of Fracfocus.org, an online public registry
where we.are among the most active participants in sharing information, on a per-well
basis; regarding the fluids used in our wells. We've leveraged this commitment to
Fracfocus.org as a means to work cooperatively with regulators in Colorado and Texas,
which recently adopted some of the most stringent hydraulic fracturing disclosure laws in
the nation. Our commitment to safety, sound environmental practices and prudent
development of U.S. onshore resource plays is widely recognized from Pennsylvania to
Texas, Colorado, Wyoming and Utah, and we will always strive for continuous
improvement.
We are grateful for the partnerships we have with you as royalty owners and will
continue to communicate with you regarding operations and opportunities as appropriate.
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