Talisman holds about 250,000 hectares on the New York side of the Marcellus and 100,000 hectares in Pennsylvania, the company's chief financial officer told a CIBC investor conference Friday."To date we've focused all of our efforts on Pennsylvania because it's been a much more receptive place to drill in. And New York had actually banned horizontal drilling," Scott Thomson said.New York is working on a framework to regulate energy development in the state, and Talisman has participated in the consulting process."For 2010 we're not putting any capital towards New York," Thomson said.
I read the article as communicating that Pennsylvania is more environmentally lax than New York. The issue of water supply for populous areas is raised, but there are parts of New York State where that shouldn't be a primary concern (e.g. Southern Tier).
As long as the margin for drilling remains paper thin, New York looks to be at a competitive disadvantage. In financial terms, that's $1 billion invested in Pennsylvania and $0 in New York for 2010. In other words:
Talisman has made the development of shale gas a key plank of its strategy. In addition to the Marcellus, it has holdings in promising northeastern British Columbia shale plays.The company is set to open up an office in Pittsburgh later this year, with activity in Pennsylvania set to ramp up significantly.
The rush is on.