In its first quarterly report to the Australian and New Zealand bourses, the Wellington-headquartered company yesterday said another key area of focus over the next quarter would be to farm-out a portion of its 100% equity in its nearby offshore Solander Basin permit.
L&M said its first well for 2007, Eastern Bush-1 in licence PEP 38226 in the Waiau Basin, was drilling ahead past 950m and expected to reach total depth of 2520m by mid-May. Eastern Bush was projected to contain best estimate potential resources of 253MMbbl of oil originally in place.
The second PEP 38226 well, Dean-1, would be drilled immediately after Eastern Bush-1 to a depth of 2100m. The Dean prospect was projected to contain best estimate potential resources of 194Bcf of gas originally in place.
Drilling of the third well, Merton Creek-1, depended on results from Eastern Bush-1, but a well prognosis had already been prepared and a drilling program would be developed shortly, according to L&M.
A fourth well, Sharpridge Creek-2, was also planned to be drilled, about 58m updip of the Sharpridge Creek-1 well that last June recovered small quantities of gas and traces of oil, confirming the existence of an active petroleum system in the Waiau Basin.
Sharpridge Creek-2 would target best estimate potential resources of up to 1MMbbl of oil originally in place at a depth of only 459m.
L&M Petroleum is drilling the Waiau Basin wells in conjunction with government-owned Mighty River Power, with MRP earning its 50% stake by contributing to the drilling costs of the wells.
L&M also said the final interpretation report of the 1015km of 2D seismic data acquired in its Solander Basin licence PEP 38228 last year would be completed soon.
It said it was seeking an extension of its August commitment to drill in the Solander and was preparing feasibility and cost estimates for two additional projects – seismic attribute analysis over the main prospects identified, and a hydrocarbon migration study.
L&M said some major exploration companies had shown interest in farming-in to PEP 38228, currently 100%-held by L&M.
A second onshore licence, PEP 38230, carried a commitment to drill a well by next September and the company was in the process of acquiring a soil hydrocarbon survey over the western portion of the permit in order to delineate potential areas of increased prospectivity, and to develop a more focused seismic program over this frontier Te Anau Basin area.
The company was carrying out field mapping and undertaking hydrocarbon maturation studies in its two other onshore Southland licences, PEP 38237 (Waitutu) and PEP 38238 (Blackmount).
