Southland coal seam gas exploration shows potential
Drilling is to continue in the Western Southland basin after coal seam gas (CSG) potential was found in three areas.
L & M Petroleum Ltd yesterday announced it would carry out further investigation work in the Takitimu north, Takitimu south and Longwood permitted areas.
Managing director John Bay last night told The Southland Times that preliminary geological studies showed the coal was likely to contain methane gas, which could be used for heating, power generation and fuel.
"Based on the results of the review, the company will be undertaking an aggressive exploration programme to confirm the CSG resource contained within its permits." The cost of the further investigation work was expected to be $2 million, which the company would fund, and would require drilling of between 250m and 800m in the highlighted areas as well as seismic testing.
The potential of the coal would not be known until six months after the drilling was completed.
The first stage of drilling would start next month, in the Waiau area.
The company was also looking for a partner to carry out further investigation work for conventional oil and CSG in the Otahu area. The cost for this work would be much higher, as the drilling would need to go between 1800m to 2000m in depth.
"Our Western Southland basin permits appear to be some of the few that contain both conventional petroleum exploration opportunities, such as the deeper Whitestone and Otahu structures," Mr Bay said.
"We believe our coal seam gas exploration programme has the potential to deliver sizeable gas reserves to L & M with a relatively low level of exploration risk and we will be agressively pursuing this opportunity."
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