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L&M Petroleum awarded second West Coast permit
12 June 2008, Source: L&M Petroleum and Lindsay Clark - An L&M Petroleum-led joint venture has been granted a second exploration permit in the Westland Basin of the South Island, adjoining the acreage where it recently drilled the Fireball Creek-1 well.
The permit PEP 50558 (Hohonu) covers an area of 649.4 sq km from south of Hokitika to the inland Lake Brunner.
John Bay, L&M Petroleum's managing director and chief executive said, "Acquisition of this permit area not only extends our exploration interests in the Omotumotu Sandstone biogenic gas fairway, but also gives the company a substantial holding in the proven oil-prone Niagara Sandstone fairway.”
The Niagara fairway was proven by the Niagara-1 well, which flow tested up to 80 barrels per day of 45 API oil, when drilled nearby in 1985.
“We see considerable potential in this new fairway, both for structural traps, similar to the Pounamou structure in our adjacent permit PEP 38521, as well as for stratigraphic trapping in these submarine fan deposits,” Mr Bay said.
L&M Petroleum, which holds a 40% interest in the permit will be operator of the permit. Australian-based Twinza Oil Ltd will also hold a 40% stake while four other partners each hold 5% interests: McKenzie Petroleum Ltd, EF Durkee and Assoc, GRDC Inc and Labrador Energy Inc.
The partners will immediately undertake a comprehensive review of the existing technical data, which will be supported by re-processing of existing seismic data and hydrocarbon source rock studies.
L&M Petroleum said it is able to fund its share of the work programme out of current cash.