L&M Energy (LME) shares leapt 12.5% today after confirmation of gas content at the OM-4 well in Southland.Results from previous drilling show that the well contains coals fully saturated with gas, equivalent to up to 11 cubic metres of gas per to
L&M Energy (LME) shares leapt 12.5% today after confirmation of gas content at the OM-4 well in Southland.
Results from previous drilling show that the well contains coals fully saturated with gas, equivalent to up to 11 cubic metres of gas per tonne of coal.
The gas’ composition is described as excellent, with methane content at 97-99%.
LME managing director Kent Anson said the results confirm the company’s expectations of the prospect, and support the existence of additional gassy coals in the company’s adjacent Waiau permit.
The Waiau permit was not included in the company’s estimated assets of 173PJ of proven, probable and possible (3P) gas reserves, as independently certified last year.
Last month, dual-listed LME raised $A7 million by selling 77 million shares to institutions and sophisticated investors at nine Australian cents a share – a result described by Mr Anson as a “great result, considering the conditions at the moment.”
The capital will be used to fund a pilot production testing programme with the aim of certifying proven and probable (2P) coal seam gas reserves at Ohai coal seam gas and for further drilling to extend its 3P reserve position in the area.
The pilot testing programme is expected to start in August or September with the goal of certifying reserves by early 2011.
LME, New Zealand's biggest coal seam gas, regards its Ohai and Waiau permit areas 70km northwest of Invercargill as having the greatest potential for development.
LME shares last traded up 12.5% to 0.135c.
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