Plans to drill for offshore oil near the Isle of Wight have been scrapped in favour of onshore exploration, UK Oil & Gas Investments (UKOG) has confirmed.
The area off Freshwater has "high environmental sensitivity" meaning the costs involved "merited no further commitment", the company said.
It added the decision was made so it could focus on an oil discovery in and around the island village of Arreton.
UKOG said it planned to undertake "appraisal drilling" in early 2019.
An independent report published in 2016 suggested there was 15.7 million barrels of recoverable oil in the Arreton area.
Stephen Sanderson, UKOG's executive chairman, said: "The Arreton discovery on the Isle of Wight remains a key element of the company's 2018 and 2019 growth strategy and plans."
Keith Taylor, Green Party MEP for the South East of England, said campaigners would oppose the Arreton drilling "tooth and nail".
He said the "destructive plans" would erode "the beauty of this island" as well as contributing to climate change.