Husky Energy has withdrawn its application to horizontally drill and frack up to four wells in the Sahtu region of the N.W.T.

In a short note to the Sahtu Land and Water Board, the company said it has decided to postpone drilling for two years. It had intended to start drilling this coming winter.

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Gregor Harold McGregor, mayor of Norman Wells, N.W.T., says Husky's decision to withdraw its fracking application isn't good news for the region's economy. (CBC)

The decision is a disappointment for businesses in the region that were hoping to capitalize on the project.

"I'm in a state of shock at the moment," said Gregor McGregor, mayor of Norman Wells.

"I wasn't expecting it. It sure isn't good news for the area, for the region. The economy here is very fragile, I've said that many times. I guess we're about to find out just how fragile it is."

Husky's decision comes a week after the Sahtu Land and Water Board delayed making a decision on the project. The board wanted more information about the project.

Earlier this year, ConocoPhillips — the other big energy player in the region — announced it will not be drilling in the region next winter.