Exploration company Providence Resources says it has decided not to complete the deal to buy 40% of the Kinsale Head Assets.
It says that the investment now required is at a 'significant variance' to the original proposal and added that the economics of the deal have changed materially.
An option, exercised last September with an initial cash deposit of $3.8m, gave Providence the right to buy up to a 40% interest in the 100% operated Kinsale head Area and up to a 40% interest in the 86.5% operating producing Seven Heads gas field.
Providence said the deposit will now be refunded in full.
'Whilst the long term economics of gas storage are compelling, and Kinsale represents a unique world class asset, the short term market erosion in gas prices, combined with a different planned capital structure going forward, led us to withdraw,' commented Providence CEO Tony O'Reilly.
Providence shares closed down 20% at three cent in Dublin.
