Cluff Natural Resources (CLNR) has vowed to reclaim a southern North Sea licence it relinquished earlier this year.
London-listed CLNR searched for a partner to help pay for the development of licence P2248 for years.
The company initially secured the acreage in the 28th bidding round in 2014 and received extensions from the Oil and Gas Authority to give it more time to reach a deal.
But founder and chairman Algy Cluff said today that the preferred bidder had failed to show that it had enough financial clout to move the project forward.
The licence, which contains the Cadence prospect, was handed back to the OGA with effect from March 29, 2019.
But CLNR believes the licence still has lots of potential and intends to re-apply for it under more favourable terms in the 32nd round, expected to get under way mid-2019.
The company provided the update in its full-year results announcement, which showed pre-tax losses of £1.66 million in 2018, widening from a deficit of £1.59m the previous year.
Founder and chairman Algy Cluff, who will retire after CLNR’s next annual general meeting, said the firm had “substantially fulfilled” its objectives for the last 12 months.
In February 2019, CLNR made a major breakthrough with its efforts to develop licence P2252 — also awarded in the 28th round.
Oil major Shell agreed to acquire 70% of the acreage, which contains the Pensacola Prospect, in return for covering costs of a new seismic shoot along with the processing and petro-technical studies needed to support an investment decision on the drilling of a well.
Shell also received an option to acquire 50% of licence P2437 by the end of this month.
CLNR said it was working closely with Shell to ensure the option can be activated.
CLNR also revised upward the resource estimates for the Dewar oil prospect in licence P2352.
It is now thought to hold up to 270 million barrels of oil in place with prospective resources of 39.5m barrels.
A farm-out process should start towards the end of the first half of 2019.
North Sea pioneer Mr Cluff, who was involved in the discovery of the Buchan field in the 1970s, said there was “no question” that the North Sea was experiencing a “revival of fortune”, especially in the context of natural gas.
He said: “There is the market, an infrastructure and a need which will conspire to keep the North Sea up the agenda of the UK oil and gas industry for another generation.”
Mr Cluff, who will be replaced as chairman by Mark Lappin, a non-executive director at CLNR since 2016, added: “Since stepping down as CEO last year, the company’s executive management team, with significant input from Mark, has produced a tremendous platform for the next stage of activity and growth via the successful award of six additional licences in the UK’s 30th Licensing Round and delivering a transformational farm-out with Shell on one, and possibly two of the company’s licences.
“As a result of the farm-out with Shell, there is now a clear transition into a period of intensive oil and gas operations which will see, inter alia, the acquisition of 3D seismic in the summer of this year to support an investment decision for the drilling of at least one and potentially two wells.
“This is therefore the ideal time to pass the chair to Mark whose wealth of operational experience, particularly in the North Sea, is perfectly suited to guide the business through this next exciting phase of its development.”