8th July, 2011

L&M Energy Limited (ASX/NZX: LME) advises that the Talon‐1 exploration well in PEP51151, onshore Taranaki, New Zealand (LME: 50%) was this morning at 312 metres and drilling ahead to the first casing point of 500m.

The 1450m well is targeting mean reserves of 2mmbbl oil (recoverable) in shallow Manutahi sands in a structure geologically identical to the adjacent Manutahi Oil field operated by Origin Energy (estimated recoverable reserves of 4mmbbl).

Talon‐1 is the first well to be drilled on the 482.4km2 permit, which also contains multiple further drilling targets.

As announced on 1st June, LME will be free carried through the drilling of the well (subject to third party final documentation and regulatory consents).

ENDS