Mosman Oil’s (LON:MSMN) acquisition of the South Taranaki Energy Project (STEP) in New Zealand from Origin Energy has been called off.
STEP no longer met its investment criteria at current oil and gas prices, Mosman said.
Origin has agreed to repay the deposit of NZ$500,000 which will be transferred back to Mosman shortly.
The joint venture arrangement with High Peak Royalties Limited will be terminated; and the Ridge Royalty Limited royalty agreement will not proceed.
Mosman issued a Review Notice on the deal in January after the Brent oil price dropped below US$40 per barrel.
John W Barr, Mosman’s executive chairman, said after months of work it was extremely disappointing that the state of the global economy and specifically the oil price has led to this outcome.
Mosman added it remains in a sound financial position with in excess of A$5mln in current assets and a portfolio of exploration projects but, given the current oil and gas price, the board has decided to review all budgets and work programmes.
Shares fell 44% to 1.33p.