The Wellington-headquartered company said today that it encountered the top of the target McIvor formation at 1590 metres (field pick based on fossil content) and that Dean-1A was now more than 1704m down towards its 2100m total depth.

The company said the McIvor drilled so far consisted of interbedded limestone stringers within claystone.

Minor fluid gains believed to be associated with fractures within the stringers had been observed.

Background gas volumes remained low due to the high mud weight required to control the swelling clays.

The dual-listed (ASX/NZX) company added that it expected to reach total depth by the weekend when it would run wireline logs.

Last week L&M reported several elevated gas peaks at various depths, including 14% at 1249m and 19.5% at 1253m, from what were believed to be fractures within thin limestone sections. Analysis of the gas indicated the presence of hydrocarbons up to C5.

Dean-1A is L&M's second deep well in licence PEP 38226 and its last deep well for the year. The prospect has best estimate potential resources of 194 billion cubic feet of gas originally in place.