Bradford Drilling Sues Partner Norse Energy for No Drilling
Norse Energy Corp, the U.S. subsidiary of the Norwegian energy company, owns leases for 180,000 net acres in New York State, 130,000 of those acres being in the Marcellus and Utica Shale plays. Norse bet the farm on New York allowing shale gas drilling long before now, and they lost (NY is still months, if not years away from allowing shale gas drilling). Norse has put their New York acreage on the auction block, looking for another company to buy it.
In the meantime, one of Norse’s drilling partners is suing them for lack of drilling according to their agreement. That agreement had nothing to do with shale gas, but instead was drilling in the Herkimer formation, a limestone-type layer in central New York. Norse seems to indicate they may restart Herkimer drilling at some point. From the Norse press release:
Norse Energy Corp. ASA (“NEC” ticker Oslo Stock Exchange, Norway; “NSEEY” ticker U.S. OTC) announces that Bradford Drilling has filed a lawsuit concerning a joint venture program to drill Herkimer formation natural gas wells with Norse in central New York. The program was halted in early August 2011, as was previously advised, and has yet to resume.
Bradford Drilling is seeking a return of $7.65 million of the $9 million which they provided to the Company under the terms of the Drilling Program Agreement. The Company recently advised Bradford that approximately $3.5 million remained to be allocated to the program and anticipates allocating those funds when the program resumes or as needed to address ongoing program expenses. Bradford also seeks $10 million in punitive damages. The Company is of the opinion that it has acted in conformance with its contractual obligations and does not anticipate any liability beyond its obligation to disburse funds in accordance with the terms of the Drilling Program Agreement.*
*Norse Press Release/Business Wire (Dec 12, 2011) – Norse Energy Corp ASA: Norse Announces Lawsuit with Bradford Drilling