Beach Energy has been left in the exploration lurch for the second time this year after Woodside Petroleum advised it did not want to pursue the second stage of the pairs’ Tanzanian joint venture.

Beach told the market that Woodside had decided not to enter the next period of the exploration program relating to the Lake Tanganyika South production sharing agreement (LTS PSA) after farming out the block to the oil and gas major last July.

Following Woodside’s decision to relinquish its 70% holding in the permits, Beach said it would retain 100 per cent ownership of LTS PSA and would remain operator, but would go back to the drawing board.

“Beach is currently assessing all options for the Lake Tanganyika South Block,” Beach said in a statement.

Under the farm-out deal struck last year, Woodside would have had the option to become operator of the Tanzanian permits if it elected to proceed beyond the seismic operations phase.

During the March quarter, Beach continued processing and interpretation of data from a 2-D seismic survey in the oil prospective East African Rift region of Tanzania, with completion of data processing and interpretation expected by the end of fiscal year 2015.

Woodside’s withdrawal highlights the company’s shift away from funding capital intensive, high risk exploration drilling in favor of pursuing near-term growth projects in a lower oil price environment. Just last month, Woodside decided against committing additional funds and taking on the role of operator at a Moroccan well it had shared with AIM-listed Chariot Oil & Gas.

Woodside’s decision not to proceed with Beach in Tanzania will no doubt be disappointing for Beach as it marks the second exploration setback for the company this year.

In March, Chevron decided against proceeding with the next phase of Beach’s Nappamerri Trough Natural Gas project in the Cooper Basin, despite the US oil and gas major spending about US$190 million on the first stage.

Shares in Beach were trading 0.4% lower to $1.14 on Wednesday afternoon while Woodside was down 0.1% to $36.63.

Lauren Barrett can be reached at lbarrett@hartenergy.com.