L&M Petroleum Limited is pleased to announce that an initial analysis of the coal seam gas potential within the Company’s onshore Western Southland Basin permit areas has resulted in the identification of three potential coal seam gas fairways, estimated to contain up to 300 Bcf of mean potential coal seam gas resources. The analysis has identified known occurrences of Eocene age Beaumont coals (highly prospective for economic coal seam gas reserves) are present in three fairways (Takitimu North, Takitimu South and Longwood) running over a distance of some 85km within the Company’s permits (see map attached). 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 exploration programme will focus initially on the Takitimu South fairway, in northeast of the Company’s PEP 38226 (Waiau) permit, the southern end of which bounds the Ohai Coalfield, where both Eocene age Beaumont coals and older Cretaceous age Morley coals have been found previously. Over 40 core holes drilled previously within the Ohai Coalfield area have tested gas, with desorption testing showing Morley coals in this area containing up to 10 m3/tonne of coal seam gas. Commencing in June 2008, the Company will be: • Drilling three CSG wells within PEP 38226 (Waiau); • Acquiring 15km of new 2D seismic within each of its three permits (45km total) to confirm additional CSG targets; and • Drilling up to five additional CSG targets (contingent on the outcome of seismic analysis). The cost of this work programme is expected to be ca. NZ$2 million, which the Company is able to fund out of its current cash. LMP’s CEO, John Bay, commented “this is a very exciting programme for the Company. 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 that we are currently seeking farmin partners for drilling later this year or in early 2009, as well as shallower coal seam gas opportunities.
LMP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
