Managing director John Bay said from Wellington yesterday that the wildcat well, in licence PEP 38226, would be drilled to a total depth of 2520m to test a seismic geophysical anomaly indicating a fault-controlled anticline containing the Eocene-aged Beaumont Sandstone.

The top of the Beaumont Sandstone, considered to be analogous to the Maui and Mangahewa petroleum reservoirs of the Taranaki Basin, was expected to be encountered at a depth of about 1250m.

Bay said the Eastern Bush prospect had potential oil resources of 253 million barrels (MMbbl) on a best estimate basis of original oil-in-place.

The Bonus Drilling company would use its Bonus Drilling Rig-2 to drill two or three deep wells for L&M this year and L&M said it expected it would take about 21 days to drill Eastern Bush to total depth.

The rig would then move to drill the second well in the program on the company’s Dean Prospect, also within the Waiau Basin.

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.

A report by Sydney-based independent geologist Global Capital Resources, published in the L&M Petroleum initial public offering prospectus late last year, estimates potential recoverable resources of 127MMbbl oil in the Eastern Bush structure.

Global Capital estimates the Dean prospect has a potential recoverable resource of 100 billion cubic feet of gas in Miocene turbidites.