Europa Oil & Gas is relinquishing it Moroccan licence, which it acquired in 2019, after failing to find a partner.
The company said the extension to the initial period of the Inezgane licence had come to an end and it would not opt to move into the first extension.
Europa expects to receive a US$315,000 bank guarantee following its decision.
Europa CEO Simon Oddie said it had been a “difficult decision” not to move into the next phase at the 11,228 square km Inezgane. The licence offers “significant opportunity”, he said.
“However, 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 continued.
“We have been working tirelessly with advisors to secure a farm-in partner but the market appetite for offshore deepwater oil exploration is currently very low and we have ultimately been unsuccessful.”
As the news broke, Europa’s share price fell, but investors seem to have shrugged off the impact of the Moroccan loss.
Europa has said there are around 30 prospects and leads on the Inezgane licence, with potentially up to 10 billion barrels of unrisked resource. The company has picked out two prospects, Falcon which may have 827 million barrels of oil equivalent and Turtle, with 204mn boe.
The future will see Europa focus on exploration, appraisal and production in the UK and Ireland.
Oddie said the company would continue to “explore potential development and exploration opportunities to expand our portfolio wherever they become available”. Such options would need to offer “acceptable commercial terms and within the transition context. We have a healthy balance sheet on which to execute on our stated strategy.”
Shell drilled a well on the Inezgane licence in 2004, while BP and Kosmos drilled another in 2014.