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Producer Drops Plans to Drill in Pennsylvania Township

A Michigan operator that wanted to drill for oil and gas in Bucks County, PA, is abandoning the effort and bringing a six-year-long legal battle to a close.

Terry Beia, manager of Traverse City, MI-based Arbor Resources Inc., told NGI's Shale Daily on Wednesday that local officials in Nockamixon Township "made it nearly impossible for us to do business there, with their regulations.

"Instead, we're going to focus our efforts on the Midwest -- in Michigan, Ohio and Indiana. We have plenty to do right here." Beia said the company would target the Antrim, Upper Devonian and Utica-Collingwood shales.

Nockamixon, an upscale, ex-urban community north of Philadelphia, lies above the South Newark Basin, a formation the U.S. Geological Survey said is likely to hold at least 363 Bcf of natural gas, and 1 million bbl of natural gas liquids (see Shale Daily, June 21, 2012).

"We've invested a tremendous amount of time, energy and resources to this," Beia said. "It's unfortunate because we had 250 landowners with 6,000 acres leased. I feel sorry for them because we had a pretty good idea that we had decent natural gas reserves there."

Arbor faced several obstacles to drilling in the township. Pennsylvania enacted a moratorium on drilling into the South Newark Basin in July 2012 (see Shale Daily, July 3, 2012). The Delaware River Basin Commission also has a moratorium on drilling there, under the pretext that one is necessary to protect water quality in the basin, which includes Nockamixon (see Shale Daily, Nov. 21, 2011).

Nockamixon is also one of seven municipal governments that filed a legal challenge to Act 13, Pennsylvania's omnibus Marcellus Shale law (see Shale Daily, April 2, 2012).

Jordan Yeager, an attorney with the Morrisville, PA-based law firm Curtin & Heefner LLP, who represented Nockamixon in the Arbor and Act 13 cases, said a dialogue between the company and the township intensified in 2007 and 2008. He said the company received a permit from the Pennsylvania Department of Environmental Protection to drill an exploratory well in Nockamixon in November 2007.

"People oversimplify these things," Yeager said Wednesday. "The township's position has always been ‘if you respect our ordinances, the way every other property owner and business is expected to respect our ordinances, you can carry out your business.’ Arbor wanted to be able to play by a different set of rules, and the township was not willing to let them do that. But it wasn't a blanket [statement that] 'we don't want drilling.'"

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