TAP OIL will not proceed with an option to acquire a 10 per cent interest in an Otway basin exploration permit wholly owned by WHL Energy.

The company bought the option to acquire the Vic P67 permit stake from WHL Energy in 2013, agreeing to pay up to US$2.95 million of the year two commitment seismic study costs over the permit.

In an announcement, Tap said it would pay the final seismic costs – of under US$2.8 million – by the agreed date of 31 March, but that it would have no further obligation or liability to the permit after this date.

WHL managing director David Rowbottam said in his announcement that he was disappointed Tap would not be participating in the project.

“Recent press articles regarding the capital constraints of major operators in the Otway Basin has meant the decision was not surprising,” he said.

“The impact of the current market dynamics has meant delays in efforts to further farm out the VIC/P67 opportunity while Tap’s current focus is clearly on the Manora oilfield development offshore Thailand.”

“We would like to thank Tap for their support and their professional contribution to the significant progress that has been made in upgrading the potential of VIC/P67, which remains a very valuable asset,” he said.

The news comes after AWE subsidiary Peedamullah Petroleum elected not to proceed with a farm-in to the permit in late December, 2014.