Jupiter drops $77m oil acquisition

West Perth-based Jupiter Energy is looking for a potential farm in partner for its oil project n Kazakhstan as it drops plans to buy a nearby oil field valued at $77 million.

In a shareholder update today, the company said the acquisition of the North West Zhetybai oil field in Kazakhstan was not feasible in current market conditions.

"The company has put a good deal of effort into understanding the NWZ oil field and the board hopes that in time JPR will be able to get some return on the investment it has made in compiling that information," Jupiter said.

In August the company entered into an agreement to purchaser the oil field for $US50 million ($A77 million), and said it was working with Macquarie Bank over a debt package.

The debt package combined with an equity raising was to cover the initial payment of $US28 million for the oil field.

Today the company said it had cash reserves of around $3 million at the end of November. Jupiter has previously said it has instigated cutbacks, mainly in the area of remuneration, across the company in a bid to reduce cash outflow.

"... these cuts will be in place until there is resolution with regards [to] the source and amount of the 2009 funding program for Block 31," Jupiter said.

The Block 31 oil project is currently Jupiter's main focus, and it said it had been in talks with a number of interested parties which wanted to become involved in the project.

Jupiter said most of the discussions have revolved around the potential farm in whereby the third party would be involved in the ongoing development of the project.

Shares in Jupiter closed unchanged at 1.4 cents.