Shares in Magnolia Petroleum (LON:MAGP) plummeted on Wednesday after the group announced the cancellation of of its admission to the AIM market.

The oil and gas exploration company announced the decision to cancel the listing amid a failure to gain sufficient funding.

The company said that despite the recent rise in oil prices, it has been finding raising funds increasingly challenging.

As a result, Magnolia Petroleum said that in order for the company to maximise its potential, future funding must be generated internally.

The directors estimate the administrative cost savings of cancelling the listing to be approximately £100,000 annually, the statement added.

The oil and gas firm has interests in over 154 producing properties, primarily in the states of North Dakota, Mississippi and Oklahoma in the United States.

However, the company is incorporated in the United Kingdom, with headquarters in Oklahoma, U.S.

Back in December, shares in Magnolia rallied after the company revealed IP rates at its Gilchrist well in Oklahoma had significantly surpassed company projections, producing 652 BOPD with 1,178 MCFD or 770 BOEPD with an associated flowing tubing pressure of 120 PSI.

Gilchrist is operated by SandRidge Energy. However, Magnolia has acquired a working interest in following its agreement with Western Energy Development LLC (WED).

As a result of the latest cancellation announcement, investors will be looking to offload shares given the difficulty in buying and selling shares without an official listing.

Shares in the company are currently trading -67.52 percent as of 10.56AM (GMT).