In two-and-a-half years Bay helped to build MRP into the most diverse of all the country’s downstream players, with the state-owned company currently involved in eight Taranaki petroleum exploration permits – three onshore and five offshore, mostly in conjunction with Swift Energy or Pogo Producing Company.
Now Bay is aiming to make L&M Petroleum a significant player in New Zealand exploration and production.
“This is an exciting opportunity to lead a company that has taken a very aggressive approach to building an exploration program over the last couple of years,” Bay told PetroleumNews.net from Christchurch on Friday.
“The assets they hold in Southland have some of the most attractive prospects in New Zealand right now. Southland is home to some of New Zealand’s richest oil source rocks.
“And I am looking forward to the opportunity to help build the next significant New Zealand E&P company.”
Bay said L&M Petroleum’s hydrocarbon shows at the onshore Sharpridge Creek-1 well, in the Waiau Basin of western Southland earlier this year “certainly confirmed that a petroleum system exists there”.
That well had oil and gas shows in three separate sand horizons, though none were commercial.
He said his top priorities for the remainder of this year and 2007 would be putting together a drilling campaign – focusing first on the Waiau Basin, but also including L&M’s other licences, both onshore and offshore.
L&M last year had about 1000 km of 2D seismic shot over its offshore Solander Basin licence and about 50km over the onshore Te Anau block. Both packages of data are being processed at present.
“We would like to drill all these permits if possible, subject to rig availability and successful capital raising ventures.”
He said L&M presently held 100% of all its licences, but would be looking to farm out some of its equity in the blocks.
“We are looking at capital raising, going to the markets in the near future, as opposed to several years down the track – a listing on the ASX or NZX or both is a possibility,” Bay said.
“New Zealand is entering a very exciting phase with the decline of Maui and the need to replace its reserves.
“Companies are finally expanding their horizons beyond Taranaki to explore the many other opportunities that exist in this country.
“Some form of exploration activity is expected to occur in virtually every basin in New Zealand during 2007 – probably the first time such a thing has occurred,” Bay concluded.
Greg Hogan remains L&M Group chief executive, responsible for the group’s coal, coal seam methane and lignite (or brown coal) activities.
NZ looks to brown coal for liquid fuel
New Zealand is poor in petroleum but rich in lignite. L&M Group is currently undertaking pre-feasibility studies on a possible lignite-into liquid fuels project.
L&M currently has five South Island lignite exploration permits, covering 210 square kilometres, and it has identified recoverable resources of about 2 billion tonnes.
New Zealand's lignite reserves are possibly the country's most strategic future energy resource, containing some 100,000 petajoules, or about 30 times the energy content of the original Maui gas field.
"I am confident that lignite, with its high quality properties, including low sulphur and low ash, will play a strategic role in New Zealand's energy future," Hogan told PNN earlier this year.
The New Zealand Government also has high hopes for lignite. Last week, New Zealand Associate Energy Minister Harry Duynhoven told the 2006 Gas Summit conference in Wellington that the South Island’s vast lignite reserves contained about 20 times the energy of the country’s Maui field, or about 3000PJ.
Duynhoven said lignite offered hope for the manufacture of liquid fuels, despite likely development costs being several billion dollars.
“I think lignite’s time is coming and rapidly,” he said.
