Norse Energy: The Little Driller that Could

You have to admire Norse Energy Corp. (subsidiary of the larger Norwegian company of the same name). They rolled the dice by leasing most of their acreage for shale gas drilling in New York State, thinking there was no way it would take this long (now four years) for New York to begin high volume hydraulic fracturing. But it has taken this long, and Norse has tried to stay alive by selling off various assets, reducing staff, restructuring debt and in general doing whatever it takes to “hang in there.”

Just a few weeks ago Norse announced they were shuttering their Buffalo office and heading back to Houston (see this MDN story).

But the plucky Norse, not ready to throw in the towel quite yet, found encouragement in yesterday’s leaked trial balloon announcement that Gov. Andrew Cuomo may begin to allow very limited fracking soon (see this MDN story).

Via a press release, Norse said in essence, “Hey, even though fracking will be limited to The Lucky Five counties, most of our acreage is in those counties. We’re good to go.”

Here’s the press release issued by Norse yesterday:

Norse Energy Corp. ASA advises that a June 13 New York Times article referenced sources close to NY Governor Cuomo’s office expecting issuance this summer of the SGEIS for permitting of high volume hydraulic fracturing of Marcellus and Utica shale in New York State. Norse has previously advised of a similar timeframe for the anticipated release of the SGEIS.

The Times’ story indicated that certain areas of the state would initially be unavailable for development either due to proximity to fresh water aquifers, other setback restrictions or local bans on drilling. Fortunately for Norse, the Company estimates that only a small portion of its acreage position (~ six percent in central NY and ~ eight percent in western NY) would be impacted by such restrictions.

The Times’ article further indicates that development permits will be initially issued in certain counties, including Broome and Chenango Counties, where Norse holds a majority of its acreage. While the article focuses on the Marcellus Shale, Norse estimates that the Utica Shale contains even larger resource potential in these areas of New York State.

“In the areas of the state where we have traditionally explored for oil and gas, the local support has been substantial,” commented Norse CEO Mark Dice. “It is encouraging that the Governor’s office appears poised to now advance the SGEIS, allowing for the safe and environmentally sound development of this valuable natural resource”, concluded Dice.

Norse Energy now owns or leases approximately 130,000 net acres in New York State of which ~33,000 lies in the liquids rich shale fairways of Western New York, and the remaining ~97,000 net acres lies in the Marcellus and Utica natural gas fairways in Central New York.*

*Norse Energy Corp. (Jun 13, 2012) – Norse Energy Corp ASA: Norse Addresses NY Times SGEIS Update