Norse says fracking moratorium won't affect its strategy
BUFFALO - The New York State Senate’s move to suspend hydraulic fracturing of gas reservoirs in New York State until May 15, 2011 will not affect Norse’s strategy of developing its estimated 500 billion cubic feet Herkimer natural gas field.
The moratorium bill passed Tuesday night halts hydraulic fracturing in all formations, including sandstone wells. Of its 130,000 acreage position, Norse presently holds approximately 26,500 acres, mostly in the Herkimer Sandstone in Chenango and Madison counties. Present estimates of the company’s Herkimer drilling program are for a doubling of acreage held by production by the end of 2012.
The purpose of the bill is to ensure adequate time to review and analyze the effects on the environment of drilling with hydraulic fracturing. The New York State Assembly and then the Governor still have to stamp their approval of the measure before it can become law.
“Actually, if anything, it (the bill) could improve our strategic position as I anticipate a time limited moratorium on hydraulic fracturing shale permits would extend our lease term under the force majeure clause and allow us to hold more land with our ongoing Herkimer activity,” the Norwegian company’s Chief Executive Officer Oivind Risberg stated.
The company’s drilling program is fully financed and drilling on its seismically identified Herkimer locations in the second half of the year will proceed as planned, he said.
The Senate proposal allows more time for the New York State Department of Environmental Conservation to finish writing updated regulations for hydraulic fracturing, a process that began two years ago and is now expected to be completed in January.
“Norse continues to expect the SGEIS to be finalized later this year. The anticipated processing time for permits to be issued in New York State has typically been two to three months. Therefore a postponement to May 15, 2011 in the issuing of permits for hydraulic fracturing is a slight delay during a time of year when drilling would not be taking place due to frost restrictions. Since the bill is prospective only, Norse’s existing Utica Shale permits for its recently announced pilot program are unaffected by the Senate bill,” commented Risberg.
Continued development of the Herkimer formation allows Norse the opportunity to hold, by way of mainly Herkimer gas production, rights to produce from any other formations such as Marcellus and Utica.
Norse’s first Herkimer well was drilled in 1961 and is still in production.
The moratorium bill passed Tuesday night halts hydraulic fracturing in all formations, including sandstone wells. Of its 130,000 acreage position, Norse presently holds approximately 26,500 acres, mostly in the Herkimer Sandstone in Chenango and Madison counties. Present estimates of the company’s Herkimer drilling program are for a doubling of acreage held by production by the end of 2012.
The purpose of the bill is to ensure adequate time to review and analyze the effects on the environment of drilling with hydraulic fracturing. The New York State Assembly and then the Governor still have to stamp their approval of the measure before it can become law.
“Actually, if anything, it (the bill) could improve our strategic position as I anticipate a time limited moratorium on hydraulic fracturing shale permits would extend our lease term under the force majeure clause and allow us to hold more land with our ongoing Herkimer activity,” the Norwegian company’s Chief Executive Officer Oivind Risberg stated.
The company’s drilling program is fully financed and drilling on its seismically identified Herkimer locations in the second half of the year will proceed as planned, he said.
The Senate proposal allows more time for the New York State Department of Environmental Conservation to finish writing updated regulations for hydraulic fracturing, a process that began two years ago and is now expected to be completed in January.
“Norse continues to expect the SGEIS to be finalized later this year. The anticipated processing time for permits to be issued in New York State has typically been two to three months. Therefore a postponement to May 15, 2011 in the issuing of permits for hydraulic fracturing is a slight delay during a time of year when drilling would not be taking place due to frost restrictions. Since the bill is prospective only, Norse’s existing Utica Shale permits for its recently announced pilot program are unaffected by the Senate bill,” commented Risberg.
Continued development of the Herkimer formation allows Norse the opportunity to hold, by way of mainly Herkimer gas production, rights to produce from any other formations such as Marcellus and Utica.
Norse’s first Herkimer well was drilled in 1961 and is still in production.
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