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Shelby Township — Officials with the exploration company behind a controversial oil well in one Shelby Township residential subdivision have announced they are pulling out of the project.

The news spread quickly through the community late Tuesday, just hours before township officials were to vote on extending an oil and natural gas drilling moratorium. For roughly a year, residents have faced the prospects of having a fully operational well producing oil just 500 feet from some homes.

Jim Mattison, president of the neighborhood's homeowners association, described the mood as "absolute jubilation" after hearing the news.

"I'm sure Steiny's, our local watering hole, will be crowded after the meeting tonight," he said.

Traverse City-based West Bay began digging its well in the neighborhood just north of the 25 Mile/Dequindre intersection a year ago, a move that caught most locals off guard. Township officials responded by passing their drilling moratorium, which kept the issue in limbo.

Earlier this month, Michigan's Department of Environmental Quality gave West Bay the go-ahead to start up a completion well to determine if there is enough oil at the site. The township board opted to wait for the results instead of attempting to enforce its moratorium.

On Tuesday, that choice appeared to pay off. West Bay Vice President Pat Gibson said the completion well had failed to produce as hoped.

"As I've said before, even with technology (as advanced) as it is today... until we actually drill the well, there's no way to know for sure what you've got ... ," he said.

In February, the DEQ introduced a spate of rules calling for advance notification and certain precautions that oil and gas companies must adopt when looking to site new wells in Metro Detroit. Gibson said had the notification rules been in place when West Bay arrived, the contentiousness might have been avoided.

"If that had happened in this situation, those folks that are in that neighborhood would have had the chance to voice their opposition to the project before we'd reached a point where we couldn't halt the drilling," he said.

But in some circles, those rules were seen as not strong enough.

"Unfortunately, West Bay Exploration utilized a loophole in state zoning law that allowed them to set up a well site so near our residents and their homes," said Shelby Township Supervisor Rick Stathakis in a statement late Tuesday.

Bills introduced in Lansing late last year to give communities more say in their fate were defeated. On Monday, state Rep. Peter Lucido, R-Shelby Township, said he plans to draft legislation that will avoid the pitfalls of earlier bills.

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