Quadrise PLC (AIM:QED) said authorities in Utah had turned down a large-scale unitisation plan put forward by partner Valkor Technologies for the Asphalt Ridge oil sands project
Valkor and project sponsors Heavy Sweet Oil and AC Oil wanted to drill 119 wells at Asphalt Ridge to produce heavy oil.
The State of Utah's Board of Oil, Gas and Mining, however, denied the order on the basis that without a producing well in place there was not yet sufficient evidence of an oil deposit to support the unitisation plan at this time.
Valkor can still go ahead and drill four pilot wells already granted a permit by the Board in December 2022.
Quadrise said it is working with Valkor to assess and clarify any impact on the conditional site licence and supply agreement for its emulsion fuel technology announced on 12 June 2023.
That deal encompassed a site licence and supply agreement with Valkor for its carbon-reducing technology.
Under the deal, Quadrise's alternative shipping fuels MSAR and bioMSAR will be produced and sold from Valkor’s heavy oil asset in Utah for 10 years.
Shares in Quadrise dropped 0.22p to 0.87p.