Norse Energy, the Norwegian company that had hoped to cash in on a natural gas drilling boom in the Marcellus Shale in New York State and create dozens of jobs in the Buffalo Niagara region before falling into bankruptcy late last year, is shutting down.
Norse officials said the company has converted its bankruptcy case from a Chapter 11 filing that has been attempting to reorganize the business into a Chapter 7 case that will liquidate its remaining assets.
The shutdown, which eliminates the company’s five remaining jobs at its Hamburg office, is an unhappy ending for a business that had hoped to ride a wave of shale gas drilling across New York to become a fast-growing business that would provide dozens of jobs in the Southtowns.
But New York’s 5-year-old moratorium on hydraulic fracturing, or “fracking,” the key drilling technique used to tap into the natural gas trapped in shale formations, caused a severe cash drain on Norse, which had invested heavily to acquire leases on 130,000 acres, mostly in Central New York, but was never able to drill there.
Norse, which initially filed for a bankruptcy reorganization in December, had an office in the Gateway Building in Hamburg. The company tried to sell its land holdings through a Bankruptcy Court-sanctioned sale last August. But with the drilling moratorium still in place, Norse was unable to sell its holdings when the bids came in lower than expected.
Funds from the company’s bondholders, lenders and shareholders that had been funding Norse’s operations, ran out this month.
At its peak, Norse had 35 to 40 workers at its office in the Gateway Building and about 16 in Central New York, where the company has most of its land holdings.