A local oil company’s $700 million lawsuit against the city of Hermosa Beach appears headed for trial later this year, now that the state Supreme Court on Thursday said it declined to consider an appeal from the city.

Macpherson Oil Co. of Santa Monica sued Hermosa Beach in 1998, alleging the city broke a lease deal that would have allowed the company to drill for oil in a city maintenance yard.

Under terms of the 1992 lease, Macpherson planned to upgrade an existing well and drill up to 30 new wells on the 1.3 acre site; some of the wells would have slanted underneath the seabed to tap offshore oil.

Hermosa Beach terminated the lease following a 1995 citywide vote to ban new drilling in the city and release of a study claiming the drilling could pose health and safety risks for nearby residents. Macpherson sued, claiming $700 million in damages from revenue foregone when the lease was terminated.

The city has since tried repeatedly to get Macpherson’s lawsuit dismissed on grounds that the city was within its rights to terminate the lease.

But earlier this year the California Court of Appeal ruled that Macpherson had a right to proceed to a jury trial. The city appealed that ruling to the state Supreme Court. That court’s refusal to take up the case means a jury trial in state Superior Court could get under way later this year.

Macpherson Oil chief executive Don Macpherson said the company was pleased with the state Supreme Court’s announcement that it wouldn’t consider the city’s petition to dismiss the case.

“The city has tried to delay and delay this, and now we’re finally able to go forward and prove our damages in court,” Macpherson said.

In a statement released after the Supreme Court announcement, Hermosa Beach Mayor Michael DiVirgilio said the city was prepared to go to trial.

“Now that the high court has made its decision,” DiVirgilio said. “Our legal team will prepare a compelling case for the trial court that will defend the Hermosa Beach City Council’s decision to protect the health and safety of the community without facing the threat of huge judgments that could jeopardize the city’s future.”