Polish shale gas play 3Legs Resources (3LEG:AIM) crashes 96% to 0.75p as its EGM (25 Nov) confirms plans to return £15.9 million or 18.5p to shareholders.

Though opportunists should note that in order to qualify you needed to be on the shareholder register as of 6pm on 25 November - hence today's precipitous fall. The company decided to exit its unconventional acreage in Poland's Baltic basin – on which it was partnered with US giant ConocoPhillips (COP:NYSE) – after a key flow test failed to prove up the commercial potential. 3Legs had a one time right to exit once its net share of expenditure had reached $19 million and chose to exercise this right – leaving it without any other assets in its portfolio.

Rather than funnel its remaining cash into new projects the company has taken the unusual step (in the E&P sector at least) of cutting its losses and returning cash to investors – with the 18.5p payment expected on the 2 December. We included the company in our Plays portfolio on the basis it was trading close to its cash level once its spending in Poland had concluded, leaving little downside risk.

The company had also been seeking its 30% share of the working capital surplus in its joint venture with Conoco (equating to $1.64 million) but has concluded the cost of pursuing this sum could not be justified. 3Legs plans to put itself in voluntary liquidation by 31 March 2015 at the latest with a final cash distribution to be made on the completion of this process.

We think management should be applauded for admitting defeat and determining the money could be better spent by its shareholders rather than squandering it on a new project where the chances of success might well have been limited.

Issue Date: 26 Nov 2014