Wellington, Aug 5, 2008 AEST (ABN Newswire) - L&M Petroleum Limited (ASX:LMP)(NZE:LMP) is pleased to announce that it has entered into a contract with Washingtons Exploration Limited to use its Rig #8 to drill the first three wells to be drilled in the Company's 2008 coal seam gas (CSG) exploration program in the South Island of NZ.
LMP is targeting more than 300PJ of CSG potential over its acreage position. New Zealand is highly prospective in terms of economic benefits from CSG discoveries due to high power costs and limitations on the existing grid.
Highlights
- Drilling of three wells targeting 300PJ of coal seam gas potential on South Island of NZ to commence immediately.
- 17.2 km of new seismic data being acquired to delineate further CSG drilling targets.
All necessary land access consents for the three drill sites have now been secured and construction of the drill sites is underway. The first well to be drilled will be Goodwin-1, located in the eastern portion of petroleum exploration permit (PEP) 38226 (Waiau) adjacent to the proven Ohai coalfield.
The Washingtons Rig #8 will begin mobilising to the Goodwin-1 drill site by the end of this week (weather permitting) and drilling of the Goodwin-1 well is expected to commence within the next seven to ten days. The Goodwin-1 well drilling and coring operation is projected to take about a week to reach the total depth of ~250m.
The Goodwin-1 well will be followed immediately by Mt Linton-1, also in PEP 38226 (Waiau), and Wairaki-1, located in the adjacent PEP 38238 (Blackmount). All three wells will be air drilled to the top of the Beaumont coals and then cored through the entire Beaumont and Morley coal sections. The cores will then undergo analysis to determine the coal's properties, gas content and gas desorption levels.
Seismic Program
LMP is also pleased to announce that it has entered into a contract with Southern Geophysical Services to acquire 17.2 kms of new 2D seismic data within PEP 38226 (Waiau). The seismic acquisition program is also expected to start next week (weather permitting) and will be run in parallel with the well drilling operations. The new seismic data is being acquired over the western end of the proven Ohai coalfield area and will be used to confirm the location of subsequent CSG wells to be drilled. Once the seismic data has been processed and interpreted, the necessary drill site access permits will be obtained and site construction undertaken.
The Company's initial analysis indicates its onshore Western Southland Basin permits may hold up to 300PJ of CSG potential resources. LMP plans to drill up to eight wells in 2008 to help confirm the extent of the coal seam gas potential resources contained within its Southland permits
Contact
John Bay
Managing Director / CEO
L&M Petroleum Limited
TEL: +64 4 473 0415
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