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L&M Petroleum identifies coal seam gas prospects in Southland
19 June 2008, Source: L&M Petroleum and Lindsay Clark - L&M Petroleum Ltd says it has identified coal seam gas potential within the company’s onshore Western Southland Basin permit areas containing up to 300 billion cubic feet of resource near the Ohai coalfield.
John Bay, L&M Petroleum’s CEO says “We have already had expressions of interest from significant parties who are prepared to purchase gas from any future production output.”
Mr Bay says the company has identified three potential coal seam gas fairways running over some 85 km in three of its western Southland permits. These are in known occurrences of Eocene age Beaumont coals which are highly prospective for economic coal seam gas reserves.
One fairway Takitimu south in PEP 38226 covers the area around Ohai then northwest along the southern slopes of the Takitimu mountains into L&M Petroleum’s Blackmount permit (PEP 38238).
The second fairway, Longwood also in PEP 38226, goes south along the Waiau valley on the western side of the Longwood ranges.
L&M Petroleum’s third fairway, Takitimu north is in the south east corner of the Te Anau basin permit PEP 38230.
A programme of well drilling and new seismic costing about $2 million is planned to start in June, 2008, the company said.
The exploration programme will focus initially on the Takitimu South fairway west of Ohai coalfield, where both Eocene age Beaumont coals and older Cretaceous age Morley coals are found. 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 m 3/tonne of coal seam gas.
The company plans to acquire 15 km of new 2D seismic within each of its three permits to confirm additional CSG targets; and drill up to five additional CSG targets — depending on the outcome of seismic survey.
Mr Bay says the Southland permits appear to be some of the few that contain both conventional petroleum exploration opportunities, as well as shallower coal seam gas opportunities.
L&M Petroleum has appointed Chris McKeown as commercial manager effective from 16 June 2008. Dr McKeown was previously asset manager of the Cheal oil field for Austral Pacific Energy.