NEW ORLEANS (AP) — Helis Oil & Gas Co. has abandoned its plans to drill in St. Tammany Parish.
Following a lengthy review of the geologic, engineering and other data from its exploratory well in rural St. Tammany Parish, Helis has concluded that it will not proceed with further operations at the site northeast of Mandeville, the company said in a news release Tuesday.
"Helis has determined that the prospect lacks appropriate commercial viability so the company will not pursue the project any further. Helis intends to permanently abandon the well and secure the site in accordance with regulatory requirements and its leases," said Greg Beuerman, a spokesman for the New Orleans-based privately owned oil and gas exploration company.
The decision means shelving a project that has racked up more than $20 million in production costs and legal fees.
At the start of the project, Helis estimated the project's potential for commercial success — being a viable producer of oil — at up to 35 percent. The company had planned to use a process called fracking to extract oil from the ground. When a well is fracked, water, sand and chemicals are injected deep underground at high pressure, creating fissures in the rock through which oil and natural gas can be extracted.
Opponents of the process have blamed it for problems such as contaminated drinking water and respiratory problems. Proponents say the method has helped reduce U.S. dependence on imported oil and is a boon to the local economy.
Had the results shown more promise, Helis would now be working with regulating agencies, parish officials and its contractors to move the project toward completion and production later this fall, the company said.
Tuesday's decision brings an end to 2½ years of wrangling over the project, which many in St. Tammany opposed due to environmental concerns.
"While we are disappointed the well was unsuccessful, exploratory projects such as this one involve a substantial risk of failure which we accept as part of our business," said Helis President David Kerstein. "We can terminate this project knowing that we conducted our operations without a single complaint regarding noise, traffic or environmental impacts."
Parish President Pat Brister thanked Helis, in a statement Tuesday, for "being a responsible corporate citizen during exploratory drilling, and throughout the entire permitting process."
– by AP Reporter Chevel Johnson
Helis Oil & Gas released the following statement:
Helis Oil & Gas would like to thank the many residents of St. Tammany Parish and others who voiced their support for our energy project.
While the project has been terminated due to a lack of commercial viability, we remain committed to helping America achieve energy independence while protecting the health, safety and environments of the communities we are privileged to serve.
Following a lengthy review of the geologic, engineering and other data from its exploratory well in rural St. Tammany Parish, Helis Oil & Gas has concluded that it will not proceed with further operations. "Helis has determined that the prospect lacks appropriate commercial viability so the company will not pursue the project any further. Helis intends to permanently abandon the well and secure the site in accordance with regulatory requirements and its leases," said Greg Beuerman, spokesperson for Helis Oil & Gas.
The company has suspended the air, water quality and noise monitoring it voluntarily instituted prior to beginning work on the site. The results of that monitoring will still be available to the public through the state Office of Conservation.
Had the results shown more promise, Helis would now be working with regulating agencies, parish officials and its contractors to move the project toward completion and production later this fall. At the inception of the project Helis estimated the potential for commercial success at 30%-35%.
Helis President, David Kerstein, has personally reached out to appropriate parish officials to notify them of the company's decision to terminate the project, as well as to business and civic leaders who voiced their support for the project and in many cases withstood significant strong criticism from vocal opponents of the project and to St. Tammany's prospective role in securing American energy independence.
"While we are disappointed the well was unsuccessful, exploratory projects such as this one involve a substantial risk of failure which we accept as part of our business. We can terminate this project knowing that we conducted our operations without a single complaint regarding noise, traffic or environmental impacts," said Kerstein. "Throughout this long and often arduous process, Helis Oil & Gas set a new standard for proactively addressing even the most unfounded concerns, expending far more time and money than required to reassure the public of our ability to conduct our work safely, protect the environment and parish quality of life. To the letter, Helis employees and contractors conducted themselves professionally and helped the company keep its commitments to the people of St. Tammany," Kerstein said.
Despite some vocal opposition, Kerstein notes that "It is important to recognize that many community leaders expressed their support for the company, the project and the energy industry, understanding full well that we could and would conduct the project with the highest degree of transparency and safety. We are grateful for their support."
