Deltic Energy PLC on Tuesday said it was unable to secure a farm-out at the Pensacola discovery in the UK North Sea.

Shares in the London-based natural resources investor, focused on assets in the southern North Sea, fell 19% to 9.75 pence each on Tuesday afternoon in London.

Deltic said the only appropriate course of action is to withdraw from the licence ‘prior to further liabilities being crystallised’.

Deltic said: ‘Despite an exhaustive process, deteriorating sentiment towards the oil and gas industry as a result of ongoing fiscal volatility and negative political rhetoric in the run-up to the July election have resulted in Deltic being unable to secure a farm-out or an alternative funding solution which would allow the company to commit to its future commitments with respect to the Pensacola appraisal well.’

Chief Executive Officer Graham Swindells added: ‘Despite our disappointment at not remaining involved in Pensacola, the technical and commercial skills and experience demonstrated on the asset will be critical as we now focus on the Selene opportunity and similar infrastructure-led projects such as Syros and Blackadder. We believe these can be brought onstream more quickly, help maintain the viability of existing infrastructure and defer decommissioning of key production hubs which continue to generate interest despite the general malaise affecting the UK exploration & production industry.’

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