ROCHESTER – Norse Energy Inc.’s move last week to cancel its current sandstone gas drilling program in Chenango County will have a significant effect on local jobs and tax receipts, according to Chenango County’s economic development consultant to the natural gas industry.
The announcement, made late last week from the Norwegian company’s headquarters in Oslo, cited Norse Energy’s need to preserve cash for more profitable Marcellus and Utica shale drilling in the future, pending permitting through the New York State Department of Environmental Conservation.
The company has a significant land position of 180,000 net acres in New York State, mostly in Chenango and Madison counties, with total contingent resources of 3.9 trillion cubic feet of natural gas at the end of 2010. Norse Energy, formerly Nornew Inc., began its Herkimer Sandstone drilling campaign about five years ago and had planned for 30 wells this year alone.
Norse Vice President Dennis Holbrook said Monday that only a quarter of the wells planned this year were actually completed and online. About 25 wells, located primarily Smyrna, Preston and Plymouth, are already producing and connected to the company’s 40 miles of pipeline in Chenango County. Norse’s long term strategy was to eventually develop the shale potential within those and future wells.
The move will initially put anyone who was doing work for Norse out of a job, said Steven J. Palmatier, the county’s paid consultant and a member of Commerce Chenango’s Governmental Affairs Committee. He said Norse’s one-year contract signed with Braden Drilling last fall would expire, and local workers employed by them and Weatherford International – a company that supplied drilling pad services and products – would be affected.
“Those are two drilling-related companies which hired local workers who have moved out of the area already,” Palmatier said, adding that independent contractors in auto mechanics, surveying and trucking would also take a hit.
A third company that moved into the greater Norwich area to conduct seismic testing for Norse, Dawson Geophysical, relocated to Wyoming last fall.
