(Alliance News) - Baron Oil PLC and Andalas Energy & Power PLC on Friday said that their joint venture group has decided not to accept the petroleum licence in Poole, southern England, offered by the UK oil regulator.
Shares in both companies fell sharply in London on Friday morning. Baron shed 21% at 0.063 pence each and Andalas was 11% lower at 0.15p.
Due to a demarcation change of the areas under offer by the UK Oil & Gas Authority, Blocks 98/11b and 98/12, which were initially awarded to the joint-venture, are now no longer part of the areas offered.
Baron said: "The revised blocks now being offered are no longer adjacent to the Colter South discovery and no longer include the primary targets that had been identified as part of the application process.
"As a result, the joint-venture group has decided not to accept the petroleum licence offered over the remaining, seaward parts of blocks 98/11b and 98/12 as it does not fit with the partners' strategy for developing Licence P1918."
Baron added that this does not affect the existing Colter and Colter South Prospects in Block 98/11a.
Andalas Chief Executive Simon Gorringe added: "We believe that the joint venture group's decision not to proceed with taking up the OGA's offer is the correct one. The joint venture may bid for the areas adjoining Colter South in the future in which case Andalas will review the opportunity at the time."
The blocks were initially awarded as part of the regulator's 31st licensing road.
The joint-venture is operated by private UK oil and gas exploration Corallian Energy Ltd.
By Eric Cunha; ericcunha@alliancenews.com
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Baron Oil (BOIL)