Bakken Development: Pathway to Success, Roadmap to a New Tomorrow Torstein Hole SVP US Onshore, Statoil, United States

1. Bakken Development: Pathway to Success,
Roadmap to a New Tomorrow
Torstein Hole
SVP US Onshore, Statoil, United States
Lance Langford, John Plappert, Kent Evans, Michael Thibodeau,
Statoil, United States
Moscow, Russia | 15-19 June, 2014
Block 1: Exploration and Production of Oil and Natural Gas
Forum: F04 – Unconventional oil and gas exploration and production

2. Abstract
The Bakken unconventional resource play located in the United States, (Williston Basin, North Dakota, Montana, and parts of
Southern Canada) represents perhaps one of the largest oil deposits in the Western Hemisphere. Estimates suggest that 7 - 24
BBOE of technically recoverable resources lie within extremely tight reservoir rock sandwiched between organic rich “source”
shales. Historically, companies have struggled to produce hydrocarbons in economic quantities due to the very low permeability
and porosity characteristic of the Bakken formation. However the advent of new technology (horizontal drilling combined with
enhanced hydraulic fracturing), favorable commodity prices, and a relatively continuous and predictable reservoir have rendered
previously un-economic resources financially viable over an area covering approximately 520,000 square kilometers.
Today, numerous stakeholders are in an active stage of development with more than 200 rigs operating in the Williston Basin
and over 6,000 horizontal wells drilled to date. With Statoil’s prowess as a technical forerunner, the achievement of increased
production and reservoir optimization is a persistent goal.
In just six years, North Dakota’s oil production has grown from 100,000 BOEPD to over 800,000 BOEPD, as Statoil’s current
Bakken production is on the path to exceed 50,000 BOEPD. Yet, approximately 70 - 80 percent of the wells required to optimally
drain this resource remain undrilled. As such, despite meaningful achievements in total recoverable oil production, a significant
opportunity for future innovation remains and substantial growth is expected.
Ultimately the future pathway to continued success in unconventionals will involve technological breakthroughs and advances in
Improved Oil Recovery (IOR). Therefore; the roadmap to a new tomorrow starts with the global application of Bakken
innovations and operational expertise to unconventional, liquids-rich reservoirs throughout the world.
Moscow, Russia | 15-19 June, 2014
Block 1: Exploration and Production of Oil and Natural Gas
Forum: F04 – Unconventional oil and gas exploration and production

3. Moscow, Russia | 15-19 June, 2014
An unconventional journey
Forward-looking statements
This presentation material contains certain forward-looking statements that involve risks and
uncertainties. In some cases, we use words such as "aim", "ambition", "believe", "continue", "could",
"estimate", "expect", "focus", "intend", "likely", "may", "outlook", "plan", "potential", "strategy", "will",
"guidance" and similar expressions to identify forward- looking statements. All statements other than
statements of historical fact, including, among others, statements regarding future financial position,
results of operations and cash flows; changes in the fair value of derivatives; future financial ratios
and information; future financial or operational portfolio or performance; future market position and
conditions; business strategy; growth strategy; future impact of accounting policy judgments; sales,
trading and market strategies; research and development initiatives and strategy; market outlook and
future economic projections and assumptions; competitive position; projected regularity and
performance levels; expectations related to our recent transactions, projects and discoveries, such as
discoveries in the Bay du Nord prospect in the Flemish Pass Basin offshore Newfoundland as well as
on the NCS; the termination of the full-scale carbon capture project at Mongstad; Statoil's interest in
the OMV-operated Wisting Central oil discovery in the Hoop area; completion and results of
acquisitions, disposals and other contractual arrangements; reserve information; future margins;
projected returns; future levels, timing or development of capacity, reserves or resources; future
decline of mature fields; planned maintenance (and the effects thereof); oil and gas production
forecasts and reporting; domestic and international growth, expectations and development of
production, projects, pipelines or resources; estimates related to production and development levels
and dates; operational expectations, estimates, schedules and costs; exploration and development
activities, plans and expectations; projections and expectations for upstream and downstream
activities; oil, gas, alternative fuel and energy prices; oil, gas, alternative fuel and energy supply and
demand; natural gas contract prices; timing of gas off-take; technological innovation, implementation,
position and expectations; projected operational costs or savings; projected unit of production cost;
our ability to create or improve value; future sources of financing; exploration and project
development expenditure; effectiveness of our internal policies and plans; our ability to manage our
risk exposure; our liquidity levels and management; estimated or future liabilities, obligations or
expenses and how such liabilities, obligations and expenses are structured; expected impact of
currency and interest rate fluctuations; expectations related to contractual or financial counterparties;
capital expenditure estimates and expectations; projected outcome, objectives of management for
future operations; impact of PSA effects; projected impact or timing of administrative or governmental
rules, standards, decisions, standards or laws (including taxation laws); estimated costs of removal
and abandonment; estimated lease payments and gas transport commitments are forward-looking
statements. You should not place undue reliance on these forward-looking statements. Our actual
results could differ materially from those anticipated in the forward-looking statements for many
reasons, including the risks described above in "Financial Risk update".
These forward-looking statements reflect current views about future events and are, by their nature,
subject to significant risks and uncertainties because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that could cause actual
results and developments to differ materially from those expressed or implied by these forward-
looking statements, including levels of industry product supply, demand and pricing; price and
availability of alternative fuels; currency exchange rate and interest rate fluctuations; the political and
economic policies of Norway and other oil-producing countries; EU directives; general economic
conditions; political and social stability and economic growth in relevant areas of the world; Euro-
zone uncertainty; global political events and actions, including war, terrorism and sanctions; security
breaches, including breaches of our digital infrastructure (cybersecurity); changes or uncertainty in
or non-compliance with laws and governmental regulations; the timing of bringing new fields on
stream; an inability to exploit growth or investment opportunities; material differences from reserves
estimates; unsuccessful drilling; an inability to find and develop reserves; ineffectiveness of crisis
management systems; adverse changes in tax regimes; the development and use of new
technology; geological or technical difficulties; operational problems; operator error; inadequate
insurance coverage; the lack of necessary transportation infrastructure when a field is in a remote
location and other transportation problems; the actions of competitors; the actions of field partners;
the actions of governments (including the Norwegian state as majority shareholder); counterparty
defaults; natural disasters and adverse weather conditions, climate change, and other changes to
business conditions; failure to meet our ethical and social standards; an inability to attract and retain
personnel; relevant governmental approvals (including in relation to the agreement with Wintershall);
industrial actions by workers and other factors discussed elsewhere in this report. Additional
information, including information on factors that may affect Statoil's business, is contained in
Statoil's Annual Report on Form 20-F for the year ended December 31, 2012, filed with the U.S.
Securities and Exchange Commission, which can be found on Statoil's website at www.statoil.com.
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot assure you that our future results, level of activity, performance or
achievements will meet these expectations. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of the forward- looking statements. Unless we are
required by law to update these statements, we will not necessarily update any of these statements
after the date of this report, either to make them conform to actual results or changes in our
expectations.

4. Moscow, Russia | 15-19 June, 2014

5. Embrace transparency Stimulate new ideas
Execute with rigour Commit passionately to HSE

6. Moscow, Russia | 15-19 June, 2014
Our presence in North America
Beaufort Sea
Kai Kos Dehseh
St. Johns
Marcellus
Eagle Ford
Gulf of Mexico
Stamford
Washington D.C.
Grand Banks
Anchorage
Houston
Mexico City
South Riding Point Terminal
Grand Bahamas
Calgary
Bakken
Austin
Williston
Chukchi Sea
Statoil Office Statoil Asset
2013
2012
2011
2010
2008
2007
2004
1996
1987
Eagle Ford Operations
Marcellus Operations
Bakken 1st US Onshore Operations
Eagle Ford
Alaska and Marcellus
Oil Sands, Canada
Deepwater GoM
Grand Banks, Canada
Oil trading, New York

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Statoil: premium portfolio in core onshore plays
Bakken Eagle Ford Marcellus

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Unconventional reservoirs: how tight is tight?
0.0000001 D 0.01 D 1 D+0.1 D0.001 D0.000001 D
Permeability (Darcy)
Extremely
Tight
Very
Tight Tight Low Moderate High
ConventionalTightTighter than tight
Eagle Ford, Bakken
Marcellus
0.00001 D 0.0001 D
Very High
Norwegian Continental Shelf,
Samotlor, Ghawar
Unconventional

9. Moscow, Russia | 15-19 June, 2014
~100m
Upper Bakken Shale
Middle Bakken
Lower Bakken Shale
Three Forks
Bakken petroleum system
~150km

10. Moscow, Russia | 15-19 June, 2014
150km
250km
150km
North Dakota Horizontal Drilling Activity
Source: IHS Enerdeq
Year 2006 – 150 wells Year 2014 – 8,800 wells

11. 0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Barrelsperday
WellCount
Moscow, Russia | 15-19 June, 2014
1 2 3 4
5
6
2 First horizontal Bakken well (1987)
6 Oil production exceeds 1,000,000 barrels per day (2014)
5 First multi-stage, long-lateral (2009)
4 First lateral isolation using swell packers (2006)
3 First horizontal well with hydraulic fracture stimulation (2000)
1 First vertical Bakken well (1953)
North Dakota historical production and well count
BAKKEN

12. Moscow, Russia | 15-19 June, 2014
Technical evolution
Images courtesy of CBP Engineering and Momentive
BAKKEN
Contact with the reservoir
Stimulation method
Proppant selection
Fluid systems

13. Moscow, Russia | 15-19 June, 2014
Vertical well, no frac
Reservoir contact area
~10 square meters
Short horizontal well, no frac
Reservoir contact area
~500 square meters
Single, uncontrolled frac
Reservoir contact area
~10,000 square meters
Multi-stage frac
Reservoir contact area
~100,000 square meters
Improved multi-stage
Reservoir contact area
~1,000,000 square meters
Surface area contact with reservoir
Long horizontal well, no frac
Reservoir contact area
~1,000 square meters
Top view
Side view
BAKKEN

14. Moscow, Russia | 15-19 June, 2014
Frac Sleeve Stimulation Method Plug & Perf Stimulation Method
vs.
Stimulation method
BAKKEN Plug & Perf completions improve
wellbore-to-fracture connection and
reduce pressure losses in each fracture
3 – 4 fracs per stage1 Frac per stage

15. Moscow, Russia | 15-19 June, 2014
Increased strength
and conductivity
increased costs
despite
Higher recovery and
profitability
yields
Natural
Sand
Resin Coated
Sand
Ceramic
High Strength Particles with uniform size and
shape deliver increased conductivity in the
fracture system
Natural Sand with irregular shape and poor
sorting in the proppant pack results in reduced
conductivity in the fracture system
Proppant types and selection
Images courtesy of Carbo Ceramics, Inc., CBP Engineering, and Momentive
BAKKEN

16. Moscow, Russia | 15-19 June, 2014
Fluid types and characteristics
Images courtesy of Momentive
BAKKEN
Cross-linked Gel Fluid System
• High viscosity
• High proppant
transport capabilities
Slickwater Fluid System
• Low viscosity and
friction pressures
• Less damage to
formation
Hybrid Fluid System
• Slickwater initially, tail-in with Cross-linked Gel
• Incorporates benefits of both fluid systems

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2005 – 2006 Single, Uncontrolled Frac
Completions
Frac optimization drives economic success
30km
BAKKEN
Williams County, North Dakota

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Star denotes artificial lift installation
2009 First 20-Stage Plug & Perf CompletionWilliams County, North Dakota
Frac optimization drives economic success
BAKKEN
30km

19. Moscow, Russia | 15-19 June, 2014
Conclusions and Path Forward
Apply best practices
Take risks and adapt quickly
Embrace new technology
Assess and monitor success around you
Design strategic evaluation projects (pilots)
Remain focused on how we deliver

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21. Moscow, Russia | 15-19 June, 2014
Torstein Hole
SVP US Onshore
Statoil, United States
Author Biography
Torstein has been with Statoil since 1985 and has
held a range of operational and development roles in
the upstream organization. More recently as Senior
Vice President for Finance, Strategy and Business
Development in Exploration and Production and,
prior to moving to Houston in October 2011, the
Senior Vice President of Operations South on the
Norwegian continental shelf.