Amadeus Energy's acquisition in April of an 80% stake in an oil and gas producing lease in Harris County, Texas for $US1.38 million has come unstuck.

Amadeus told the market today that in addition to "doubts" about the title validity on the lease, a recent building approval for low cost housing - located close to the operating wells - gave rise to concern that there would be a strong prospect of litigation in the future.

The board of its wholly owned US subsidiary, Amadeus Petroleum Inc, unanimously decided to withdraw from the deal with all deposit monies having been refunded.

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