A Calgary-based energy company is backing away from its plan to drill oil wells within the city of Lethbridge.

Goldenkey Oil Inc. issued a statement on Thursday saying it has decided to withdraw its application to access its minerals in the Lethbridge area.

The company’s Penny Project was facing stiff opposition from residents and city council, which posted a letter on its website arguing that the drilling would sterilize developable urban land and burden the city with additional costs associated with having to separate wells and pipelines from future neighbourhoods.

“Goldenkey has decided on a project basis that the barriers here did not justify the costs,” said company representative David Hill in the statement.