L&M Energy has started collecting seismic data to find targets within its onshore Taranaki petroleum exploration permit.The company said today it had also finished shot hole drilling at the 482.4 square kilometre permit, (PEP) 51151.L&M managing d
L&M Energy has started collecting seismic data to find targets within its onshore Taranaki petroleum exploration permit.
The company said today it had also finished shot hole drilling at the 482.4 square kilometre permit, (PEP) 51151.
L&M managing director John Bay said in a statement it was optimistic drillable prospects will be defined.
“PEP 51151 provides potential for both shallow oil plays with a short term development time frame, and deeper gas-condensate plays with a longer term exploration/development time line. It provides a good base for building possible longer term projects with upside potential,” he said.
Mr Bay said exploration in the permit fitted well with the company’s dual focus strategy on conventional targets in proven basins and its coal seam gas (CSG) programme and growth strategy.
He told NBR a roadshow around the country to brief shareholders on its proposed merger with L&M Coal Seam Gas was progressing well. “The feedback we’ve got so far has been very supportive.”
The acquisition of L&MCSG would create a company with 12 exploration permits across New Zealand and a market capitalisation of over NZ$100 million.
Meetings in Australia will be held next week. The dual-listed company (NZX:LME) is “cautiously optimistic” coal seam gas had the same potential in New Zealand as Australia – where it represents more than 13% of gas supply.
Investors have been told capital raising may be necessary in the future.
“We know at some point we’ll need to re-fill the coffers but we don’t know how much. Once we get the merger behind us, we can then decide how to best extend out resources.”
Mr Bay said it would be a small number “small by oil and gas standards” and coal seam gas was by no means more risky than conventional high-risk exploration.
“That’s the nature of the oil and gas business, whether it’s oil or coal.”
L&M Energy (the operator) has a 50% stake in the permit, along with Australian explorer Mosaic Oil.
L&M said it was the operator of all its joint ventures and had cash in hand to undertake all its current work programs.
The Taranaki permit contained a number of already identified oil and gas leads and was contiguous to Origin Energy’s mining permits containing the Rimu/Kauri and Manutahi fields, which have produced over 1.2 million barrels and 15 billion cubic feet of has since 1999, it said.
The company’s share price was up slightly from 0.15 cents to 0.16 cents.
