The Christchurch-based explorer has run 50km of seismic survey and is about to detonate dynamite in recently-drilled holes over parts of a 1760 square kilometer area to generate underground shockwaves that will indicate the likely presence of oil and gas.
L&M group managing director Greg Hogan told the Sunday Star-Times newspaper that the company considered the Te Anau basin to be highly prospective.
Drilling could begin next year, most likely on farmland rather than in the rugged bush.
Last week, the company found petroleum in the Waiau Basin near Tuatapere, about 70km northwest of Invercargill.
It also has an offshore permit for the Solander Basin, off the coast southwest of Invercargill and extending to Stewart Island, and it aims to make Southland a significant new oil, gas and coal seam methane hub.
