Hardy Oil & Gas to take write-down after giving up Indian licence stake

24th Dec 2014 10:24

The share price of India-focused Hardy Oil & Gas plunged on Wednesday after the firm "consented to the relinquishment" of an exploration licence.The operator of the KG-DWN-2003/1 (D3) licence, Reliance Industries, had proposed the move concerning Hardy's 10% stake after India's government imposed access restrictions on the block last month.The restrictions ruled out further exploration and development activities in the impact zone area of D3 and stopped further work and investment in an unrestricted area of the block due to the "anticipated increase in cost and risk", Hardy said.The company said that the "untenable position" was worsened by uncertain natural gas pricing in India over the long term.Hardy said: "The relinquishment of the block will release Hardy from any further work programme liability including any further financial liability related to unfinished minimum work programme penalties."However, $22m of its intangible assets attributable to D3 "will be subject to write down in the current financial year".Hardy stressed that the release of liabilities associated with D3 means that it is now in a stronger working capital position.Hardy's shares were down 22.6% at 64.44p by 10:37.