Upland Resources said it could terminate a previous agreement to invest in the UK's Wressle oil project, after authorities upheld a ruling that blocked the discovery's development.
Upland had signed a conditional farm-in agreement for 10% of Wressle, which is being developed by operator Egdon Resources.
The Planning Inspectorate, however, upheld two planning refusals by North Lincolnshire County.
"In the event of rejection of any of the planning appeals, Upland UK may terminate the Wressle farm-in agreement at any time following the result of the appeals being known, without having to wait until 28th February 2018," Upland said.
"Its £160,000 deposit will then be returned to Upland UK and Upland UK will have no further payment obligations under the Wressle Farm-in Agreement."
"Upland will now review the situation and provide a further update in the near future."
At 8:22am: (LON:UPL) Upland Resources Limited share price was -0.07p at 1.31p