Helis Oil & Gas halts St Tammany Parish drilling project

By Chevel Johnson, Associated Press

Helis Oil & Gas Co. has abandoned its plans to drill in St. Tammany Parish.


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."

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