Energy major Equinor (NOR:EQNR) will leave the joint venture with Valeura Energy (VLU) on a potentially major gas project in Turkey that underpinned it as an investment proposition.
The Canadian company’s share price crashed 15 per cent on the news to 25p, after it was trading as high as 200p in September. Valeura did not detail why Equinor did not see a future in the project. The joint venture agreement saw Equinor funding exploration and holding a stake in several licences in the Thrace Basin project.
Panmure Gordon analyst Colin Smith said the exit sent a “very negative signal about the commercial value of the deep gas play”. Finding another partner would be a long shot, Mr Smith said. Valeura said the two companies had not yet worked out how Equinor would untangle itself from the gas play.
Valeura listed in London in April hoping to attract more investors away from the natural resources-heavy Toronto Stock Exchange, although liquidity was limited because no new shares were issued at the time.
The company said it would use its $37m (£28m) in working capital to keep exploration going at its Thrace Basin holdings. Its working capital is now above its valuation of $30m.
Chief executive Sean Guest said the company remained “encouraged about the long-term potential for the play”.
Equinor has been contacted for comment.
