Gulfsands Petroleum will no longer pursue the Moulay Bouchta petroleum agreement in Morocco will start winding down its activities in the country immediately.
Gulfsands said this would enable it to focus its management and capital resources in the Levant region.
The Moulay Bouchta contract expired in June after Gulfsands had received an extension of the duration of the initial phase of the exploration period from Office National des Hydrocarbures et des Mines from two years to three years, together with a revised work programme.
At that time, Gulfsands noted that ONHYM had indicated a willingness to extend the initial phase further, from three years to four years through to June 2018.
It said: 'The Group's decision to pursue this extension, and indeed its ongoing participation in Morocco, was conditional upon it finding an appropriate partner to help take the project forward, as Morocco is non-core to the Group's business strategy.
'The Group has been unable to find a partner and so has now informed ONHYM that it does not wish to continue further with discussions to extend the Moulay Bouchta contract.
'As a result of this decision, we understand that ONHYM intends to call in $1.75 million of restricted cash held as performance guarantees under the Moulay Bouchta contract.
'Further possible penalties could apply, and have been provided for in the Group's subsidiary, Gulfsands Petroleum Morocco Limited.
'Now that the Group no longer has any operating assets in Morocco, it intends to proceed with winding down its Moroccan operations and exiting the country.'