The South Island well is northeast of the Eastern Bush-1 well, currently being drilled by L&M as an appraisal well to the Sharpridge Creek-1 well drilled by the company early last year.

That well encountered gas and oil shows over a gross interval of 120m in the Beaumont Sandstone, including flaring gas from two test zones and recovering a trace of oil from a third zone. Analysis of the Sharpridge Creek-1 wellbore indicated that the bore was on the flank of the structure, according to L&M.

“A 2D seismic program acquired in February this year confirmed that potential exists higher up on the structure from the Sharpridge Creek-1 well,” the company said.

L&M has entered into a contract with Washington Exploration to use their rig and crew to drill the Sharpridge Creek-2 well.

Sharpridge Creek-2 well will be drilled to a total depth of 459m and is targeting best case potential resources of 1.5 million barrels of oil at a location predicted to be 58m structurally higher to Sharpridge Creek-1, according to managing director John Bay.

“The Beaumont Sandstone is the primary exploration objective in the Waiau Basin and the presence of shallow oil and gas in the Sharpridge Creek-1 well is very encouraging for ongoing exploration in the area,” Bay said.

L&M Petroleum is sole owner and operator of the Sharpridge Creek Prospect and this well.