Environment Minister Sterling Belliveau says Petroworth Resources Inc. can proceed with its plan to drill an exploratory oil well in Lake Ainslie.
The decision announced today upholds approval given earlier this year by the provincial departments of Energy and Environment.
The Margaree Environmental Association appealed the approval in October, giving Belliveau 60 days to rule on it.
Belliveau said in a statement that he found there's not sufficient evidence to overturn the approval.
He said there are terms and conditions in place to protect the environment and human health.
Opponents of the well are concerned it could open the door to hydraulic fracturing, or fracking, in the area.
Fracking is the injection of pressurized fluids into rock to access oil or natural gas.
Critics say the process can poison groundwater, but proponents dispute that.