ST. JOHN'S, N.L. - The Newfoundland and Labrador Supreme Court has ruled the province's regulatory oil and gas board acted unreasonably by extending an exploration drilling licence beyond the defined term limit.

Justice Rosalie McGrath wrote in a July 3 decision the Canada-Newfoundland and Labrador Offshore Petroleum Board did not have authority to grant a company another licence covering the same area in the Gulf of St. Lawrence in 2017.

The licence extended Corridor Resources Inc.'s drilling rights in the Old Harry site, located about 80 kilometres off the southwest tip of Newfoundland, beyond the set nine-year limit.

Environmental groups including the David Suzuki Foundation and Sierra Club Canada Foundation had argued the decision was unlawful and lacked proper environmental oversight.

Law firm Ecojustice, which represented the groups, said today the ruling sets a precedent for regulatory boards in Canada and it prevents companies from exploring for assets for an indefinite length of time.

The regulatory board welcomed the ruling that it said brought "greater certainty" on the statutory regime and said it did not plan to appeal.