Chevron Corp. (NYSE: CVX) announced Wednesday evening that it would abandon its plans to drill in the Arctic. The company released this information in a letter sent directly to Canada’ top regulator, the National Energy Board. The company claims that it is withdrawing due to economic uncertainty in the industry.

To date, this is the largest drilling project to be put on hold due to falling oil prices over the past six months. Other companies in the industry are looking to tighten up their 2015 budgets as well.

Imperial Oil Ltd. (NYSEMKT: IMO), Exxon Mobile Corp. (NYSE: XOM) and BP PLC (NYSE: BP) also have plans to drill in the Beaufort Sea but have not made any announcements regarding whether the project will either be put on hold as well or go through.

Chevron Canada Ltd. holds an exploratory license in the Beaufort Sea (EL 481), which is approximately 150 kilometers Northwest of Tuktoyaktuk. The company is interested in drilling an exploratory well by 2020.

24/7 Wall St. has received a copy of the letter sent to the National Energy Board. While the external communications advisor said that the company would not be making further comment, here is what the letter said:

On behalf of Chevron, we write to advise the Board that due to a number of factors, including the level of economic uncertainty in the Industry, Chevron has put its drilling plans for EL 481 on hold indefinitely. Unfortunately, as a consequence, Chevron will not be proceeding with an application for an advance ruling on whether Chevron’s drilling plans for EL 481 meet or exceed the intended outcome of the Board’s Same Season Relief Well (“SSRW”) requirement. Chevron will continue to monitor regulatory applications by other operators in the region.

Chevron appreciates the time and resources that have been invested by the Board and other parties in this matter.

If you have any questions or concerns please do not hesitate to contact the undersigned.

Despite the news of the pull out, shares of Chevron rallied up 2% in the last hour of trading Thursday to $108.24.

The stock has a consensus analyst price target of $123.42 and a 52-week trading range of $100.15 to $135.10. The company has a market cap of roughly $201 billion.

ALSO READ: Is $40 Oil Coming?

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.