Both wells are in PEP 38226 in the southwest South Island’s Waiau Basin.

Spot sampling yesterday morning, New Zealand time, at the Sharpridge Creek-3 well between 270m and 300m recorded traces of fluorescence associated with a slow streaming cut in sandstone and fair oil shows of dull yellow fluorescence with a bluish white cut within interbedded coal seams, according to operator L&M Petroleum.

“The target Beaumont Formation was encountered at a depth of 264m (field top), some 9m low to prognosis,” L&M said.

“These shows are approximately 40m higher than the shows encountered in the Sharpridge Creek-1 well. The well will be logged at a depth of 400m before proceeding to the planned total depth at 450m.

“This interim logging run is designed to acquire good quality logs unaffected by a potential water flow thought to be associated with a fault contact with the basement as seen at total depth in the Sharpridge Creek-1 well.”

At 6am today, the well was at 410m and L&M was preparing to run wireline logs. Following this the well will be drilled on to a total depth of 500 m.

Sharpridge Creek-3 is an appraisal well for the find made by Sharpridge Creek-1 early last year.

That well encountered gas and oil shows over a gross interval of 120m in the Eocene-aged Beaumont Sandstone.

Last week, L&M plugged and abandoned the shallower Sharpridge-2, also in PEP 38226, at a depth of 321m, when the well encountered basement some 130m higher than prognosed.

Sharpridge Creek-3 is being drilled about 190m west of the previous well.

Yesterday at 11am, the well was drilling ahead at 320m.

L&M is sole owner and operator of the Sharpridge Creek Prospect in the Waiau Basin permit PEP 38226.

But the rest of the permit has been farmed out to state-owned enterprise Mighty River Power, which is contributing 100% to the drilling of Dean-1, L&M’s second deep well in the lease, to earn a 50% interest in the block (excluding the Sharpridge Creek Prospect).

Dean-1 is designed to test the hydrocarbon potential of the McIvor Formation on the Bellmount Thrust Fault trend.

“The McIvor Formation is the equivalent of the Tikorangi Limestone, which is a prolific producer in the Waihapa/Ngaere field in onshore Taranaki,” L&M said.

“The company hopes to test the McIvor Formation in Dean-1 for potential gas resources of 194 billion cubic feet on a best estimate basis of original gas-in-place.”

The target horizon is expected at a depth of 1313m and total depth for the well is planned to be 2100m.