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NY DEC: Norse's Marcellus Permit Application 'Premature'

Although Norse Energy Corp. ASA has applied for a permit to drill an unconventional gas well in New York's portion of the Marcellus Shale, the state Department of Environmental Conservation (DEC) said the company's application is premature.

DEC spokesperson Emily DeSantis told NGI's Shale Daily that Norse's application for one well in the town of Smyrna, which is in Chenango County, is the first and only one the department has received since it unveiled its preliminary draft permit rules on hydraulic fracturing (fracking) on June 30 (see Shale Daily, July 5).

"Unless an applicant completes a site-specific supplement to the 1992 GEIS [generic environmental impact statement], high-volume hydraulic fracturing applications remain on hold until the final SGEIS [supplemental generic environmental impact statement] is complete," the DEC said. "It is premature for companies to submit applications for high-volume hydraulic fracturing under the SGEIS as no final decision on high-volume hydraulic fracturing has been made, including what the final requirements and permit conditions would be if such activity is allowed in New York state."

Norse, a Norwegian company, said it submitted the application on July 14.

"While drilling permits will not be issued until the SGEIS becomes final, Norse believes that it is important to have applications ready for approval once that process is completed," Norse CEO Mark Dice said. "I am excited to be taking this important step toward development of Norse's potentially abundant Marcellus and Utica Shale resource."

Cherie Messore, spokesperson for the Independent Oil and Gas Association of New York, told NGI's Shale Daily that it was not unusual for Norse to apply for a permit. "Certainly other oil and gas companies have also applied," Messore said Friday. "Everything goes into a queue and nothing will be acted upon until such time when they can move forward. I would imagine that the Norse application is part of a fairly lengthy queue by now."

Norse said it had total contingent resources of 3.9 Tcf, or about 700 million boe, at the end of 2010. The company holds a land position of 180,000 net acres in New York and owns a natural gas marketing business and operates gathering and transmission pipeline systems in New York and Pennsylvania.

The company sent notices of force majeure to landowners covering its leased acres on Jan. 10 and said it would continue to pay delay rental and royalties through the force majeure as a form of pre-payment (see Shale Daily, Jan. 18). However a district court judge ruled in April that producers may not declare a force majeure over the state's de facto moratorium on fracking (see Shale Daily, April 11).

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