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Cuadrilla Resources Responds to

Report on Shale Gas Drilling in
Lancashire
Thursday, January 20, 2011

Below is Cuadrilla's preliminary response to the Tyndall Centre report, which the company had the
chance to review earlier this week. No one from the Tyndall Centre approached us for any information
as part of their research process. This is disappointing as we are currently the major UK player in this
field and could have addressed and answered all the points made in the Co-operative's press statement.
Since the publication of the report we have extended an invitation to the Co-Op to visit our sites and
are hopeful they will take us up on this offer.

As a responsible company, Cuadrilla is committed at all times to ensuring that our operations are
designed to be totally safe. With around 200 years of cumulative experience, including involvement in
the drilling and/or fracture stimulation ('fracing') of more than 3,000 wells, Cuadrilla's management
team is implementing industry leading health, safety and environmental risk mitigation practices across
all its shale gas activities.

The potential risks associated with shale gas exploration are not unique and are common to all
hydrocarbon exploration. Shale gas exploration techniques, including directional drilling and fracing, are
conventional and have been used across the wider oil and gas industry (including previously in the
UK) for many decades.

Cuadrilla has given a categorical assurance that it is doing everything possible to manage the risk of a
health, safety and environmental incident occurring at its operations. We have received full local and
national approvals from all the appropriate bodies (including the Department of Energy & Climate
Change and the Health & Safety Executive) to explore for natural gas at each of our sites. As well as
fulfilling all regulatory requirements, Cuadrilla is implementing industry leading processes, procedures
and controls at its projects acquired from many decades of experience.

The Tyndall Centre report discusses the risk of contamination of drinking water by fluids used in the
fracture stimulation ('fracing') process associated with many forms of oil and gas exploration, including
shale gas exploration. As of 2009, out of hundreds of thousands of fracing operations that have taken
place in the United States, US regulators have confirmed no cases of hydrocarbons or fracing fluid
leaking into shallow water aquifers as a result of fracing. Cuadrilla is not aware of any incidents since
2009.

Fracing is an extremely common practice in the oil and gas industry, particularly in North America. It
involves pumping fluid, more than 99% (in Cuadrilla's case 99.85%) composed of water and sand,
under high pressure to open up millimeter sized gaps or cracks in shale rock formations found at
depths greater than 5,000 feet - several thousands of feet below shallow water aquifers containing
water used by humans, animals and vegetation. Other than water and sand, the fracing fluid Cuadrilla

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is using at its sites contain just two additional ingredients - firstly a friction reducing compound
commonly found in contact lens solution and in soil sealant at construction sites and, secondly, a
highly diluted, mildly acidic compound used in many household applications including bleach and
other cleaning fluids. These chemicals, which are very commonly used and well understood, are used
by Caudrilla in extremely low concentration (just 0.15% of the fracing fluid).

Cuadrilla cannot comment directly on the claims made in the Gasland film, which has recently been
released in the UK. However we note that the US-based American Natural Gas Alliance has
undertaken a comprehensive, fact-based rebuttal of several of the most high profile claims contained in
the film, including the sink lighting scene, on its website. This includes a number of rebuttals by
federal and state government officials following thorough environmental investigations.

The Tyndall Centre report discusses implications of potential UK shale gas discoveries on UK energy
policy. In Cuadrilla's view, shale gas can offer a „triple win' for people in the UK: (1) helping to
ensure energy security through new domestic energy supplies, (2) lowering the cost and price
volatility of energy to consumers and, like all natural gas, (3) reducing greenhouse gas emissions if
burned to create electricity instead of burning coal - natural gas-fired power produces around half the
carbon emissions of coal-fired power. Thus, natural gas can play an important transitional role in the
development of a low-carbon energy system, an ongoing process that will take many decades.

Shale gas exploration and production sites typically occupy a small geographical footprint and their
visual impact can easily be minimised and the carbon footprint minimised.

Cuadrilla also recognises the potential for an emerging shale gas industry to create new jobs and inject
investment into communities. By being a first mover in shale gas, the UK could be at the forefront of a
potentially significant new European energy industry, bringing multiple economic benefits for the
north-west of England and for UK Plc.

There are no grounds for a moratorium on this proven and long-standing technology. We are confident
that no issues will occur in our activity in the north-west of England which would cause any local or
national concerns on which to base the introduction of a moratorium on on-shore drilling activity.

Review all our Gas Shale news releases .

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