New Zealand Oil & Gas has handed back the deep-water Barque exploration permit, off the Canterbury coast, to the government after its partners agreed it was too risky.
The Wellington-based company has returned the PEP 38259 after "an extensive technical review" with its joint venture partners and an unsuccessful search for farm-in partners, and determined the risk profile was too high, it said in a statement.
NZOG held a 40 per cent stake with the permit, with Beach Petroleum (NZ) holding 35 per cent and AWE New Zealand 25 per cent. It had to make a "drill or drop" choice by the end of August.
It acquired the operatorship of the Barque licence in January this year, creating tight deadlines if it was to find farm-in partners.
The decision, announced after the stock exchange closed for the week, comes after NZOG chief executive Andrew Knight said the farm-in search had been difficult.
Part of the issue with the permit was that it exhibited signs of being an undersea extinct volcano, rather than an oil and gas reservoir.