L&M to drill Dean-1 gas prospect in current 4-well Southland campaign

L&M Petroleum plans to drill the Dean-1 well when it finishes drilling the Eastern Bush-1 oil prospect well now close to total depth. A third deeper well Merton Creek-1 may also be drilled.

Meanwhile the company says it is to redrill a second shallow well on its Sharpridge Creek prospect after plugging and abandoning its first shallow appraisal well Sharpridge Creek-2 at 321 metres. The well encountered basement some 130 metres higher than prognosis.

The well is to be redrilled in mid-May as Sharpridge Creek-3 by skidding the drill rig 190 metres west of its current location. The wells are being drilled using a rig contracted from Timaru-based Washington Exploration as an appraisal to the Sharpridge Creek-1 well which in early 2006 encountered 120 metres of gas and oil shows in the Beaumont Sandstone.

All of L&M Petroleum’s wells and wellsites are being drilled in the second quarter in the same permit area PEP 38 226.

L&M Petroleum says that Eastern Bush-1, about 15 kilometres northwest of Tuatapere, was at a depth of 1752 metres on May 16 and drilling ahead with no significant hydrocarbons encountered to date. The well was to drill to a depth of 1780 metres when an electric wireline logging survey will be carried out. Eastern Bush-1 is being drilled by a 50-50 joint venture between operator L&M and energy company Mighty River Power, using Bonus Drilling’s rig No. 2.

L&M Petroleum says in its first quarterly report since listing on the stock exchange that the Dean-1 well will be drilled to 2100 metres and is projected to contain best estimate potential resources of 194 bcf of gas originally in place.

The Dean-1 well will be sited about 25 kilometres north of the servicing town of Tuatapere.

The first quarter report says that a third deep well Merton Creek-1 is strongly contingent on the Eastern Bush-1 well result. In preparation, the drilling site a few kilometres north of Eastern Bush has been surveyed and marked out on the ground. A decision to construct the site will be made after the completion of the Eastern Bush-1 well. A well prognosis has been prepared and the drilling programme will be developed shortly.

The report says 23.2 kilometres of 2D seismic data was acquired and interpreted over the Dean prospect. A Dean-1 well prognosis was prepared based on the seismic interpretation. All service providers contracted for the Eastern Bush well will also be used to drill the Dean-1 well.

In L&M’s offshore Western Southland Basin Solander PEP 38 228 area the final interpretation report of the 1015 kilometres of 2D seismic data acquired in 2006 was expected to be completed in April 2007. Attempts to farmout the permit had received some interest from overseas companies.

John W Bay the managing director and CEO says in the quarterly report that L&M Petroleum is in a strong financial position and has sufficient funds to undertake the work programme.

Source: L&M Petroleum