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SWN suspends drilling program in N.B., applies for long-term license

FREDERICTON – SWN Resources has suspended drilling plans scheduled to begin this spring in New Brunswick.

In a letter obtained by Global News, SWN’s Executive Vice President of Corporate Development, Jeff Sherrick, said the company has a desire to continue their work and investment in the province, but cannot continue that investment because of a moratorium on hydraulic fracturing.

Hydraulic fracturing, commonly known as fracking, is a controversial method used in the extraction of shale gas.

“[T]he commitment to a moratorium has forced us to suspend our drilling plans and rededicate resources to projects in other jurisdictions,” the letter read.

“This is not to say that we do not want to invest in New Brunswick, but we need to be able to assess the long-term effects of the moratorium, once implemented and if lifted.”

Read the letter below

The letter was written Dec. 16, two days before Premier Brian Gallant introduced the bill to impose the moratorium.

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READ MORE: Groups say N.B. moratorium should only last 6 months

At that time, Gallant said they can continue with exploration — which could include seismic work or wells being drilled, but the wells cannot be fracked.

“The understanding that I have is that if there is a moratorium on hydraulic fracturing even some of the operations that you would do in the exploration phase, you may not undertake them because of the cost without ensuring that you would be able to hydraulically frack when the time would come,” Gallant said.

The Dept. of Energy and Mines received four Environment Impact Assessment (EIA) applications from SWN to drill four exploratory wells, two near Rexton and two near Chipman.

The EIAs were approved, but the department had not yet issued the licenses.

READ MORE: SWN Resources hopes to drill four test wells in N.B.

Sherrick also acknowledged the company’s application for a long-term extension of their Licenses to Search.

The Dept. of Energy and Mines confirmed they are reviewing SWN’s application to extend its exploration license.

SWN has 32 licenses to search in the province, scheduled to expire March 16. They won the bid to explore on March 17, 2010. As a part of that winning bid, the company committed to spending $47 million on exploration projects.

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As of November, SWN had completed about two-thirds of their planned exploration work commitment.