Europa Oil & Gas (Holdings) PLC (AIM:EOG) said it has opted to exit the Inezgane licence offshore Morocco after time ran out on partnering efforts.
The company, in a statement, told investors that the initial phase of the licence has now come to an end and it has not taken up its option to extend into the ‘first extension period’.
Europa chief executive Simon Oddie described it as a difficult decision, as the asset represented significant potential, but noted that industry interest in deep water exploration has been very low.
“Progressing to the next stage would have required Europa to commit to drilling an exploration well, which we could not justify without obtaining another partner,” Oddie said. “We have been working tirelessly with advisors to secure a farm-in partner but the market appetite for offshore deep water oil exploration is currently very low and we have ultimately been unsuccessful.”
Oddie added: “Europa is committed to creating shareholder value by building a balanced portfolio of exploration, appraisal and production assets in the UK and Atlantic Ireland.
“Our balanced portfolio of assets at various stages of the development cycle, including production and appraisal, ensures that Europa remains well-placed to deliver affordable energy.
“We will continue to explore potential development and exploration opportunities to expand our portfolio wherever they become available, provided that these can be acquired and developed on acceptable commercial terms and within the transition context.
“We have a healthy balance sheet on which to execute on our stated strategy."