Sterling Energy has decided to surrender the Ntem concession off the coast of Cameroon.
The surrender will be effective by the end of December this year and the company does not expect to incur any material costs associated with it.
Sterling Energy's chief executive officer Eskil Jersing said: “We are disappointed that we have been unable to reach an acceptable solution for all parties to advance operational activity on the Ntem Concession.
“Given the declaration of force majeure in May 2014, the remaining potential on the block and the challenging macro landscape, we have made the decision to formally surrender the Ntem Block."
The company further plans to focus on securing transformative, exploitation-led M&A opportunities.
Situated in the southern Douala Rio Muni Basin, the Ntem concession area is a deep water block and is located next to the northern maritime border of the Rio Muni province of Equatorial Guinea. Water depths in the concession range from 400m to 2,000m, east to west across the block.
In 2015, operations within Ntem were suspended under the force majeure provisions of the licence owing to an overlapping maritime border claim between Cameroon and Equatorial Guinea. In November 2011, Sterling completed a farm-out agreement and assigned a 50% working interest in and operatorship of the Ntem concession to Murphy Cameroon.
Sterling retained a 50% non-operated working interest and Murphy was proposed to fully fund Sherling's share of the costs of drilling one exploration well.
In January 2014, the joint venture partners and Société Nationale des Hydrocarbures, the national oil company of Cameroon, agreed to lift the declaration of force majeure to commence exploration activities.