NZ Oil and Gas has ditched plans to drill for oil off the coast of Patea in South Taranaki.
The company says economic conditions don't support drilling at Kaheru-1, which is about 12 kilometres off the Patea River mouth.
NZ Oil and Gas and its partners Tag Oil and Beach Energy made a commitment to begin drilling this autumn, but they are now expected to talk to the Crown about their options.
When that commitment to drill was first made oil prices were about $100 a barrel, but are currently a little over $30.
The decision not to go ahead at Kaheru-1 comes after NZ Oil and Gas reported a $27.6 million loss for the six months ended December 2015, compared to a $7.7 million loss a year ago.