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Resource Consents Granted for Ohai Coal Seam Gas Project

Resource Consents Granted for Ohai Coal Seam Gas Pilot Project

13th December, 2010

L&M Energy Limited (LME) is pleased to announce that all necessary resource and environmental consents have been granted for the Ohai Coal Seam Gas (CSG) pilot project located in PEP 38220 on the South Island of New Zealand.

Drilling of the first pilot production well will start later this week with site construction now underway. The first element of the well will be to drill and cement surface casing to an approximate depth of 100 meters. The pilot well will be drilled out through the surface casing to a total depth of approximately 750 meters early January.

L&M are utilising a lateral completion method for the pilot project, a technique which has been highly successful in a number of commercial CSG projects internationally. The lateral section of the well is targeting the extensive and gassy Morley 2 seam, which can measure up to 23m in net thickness.

The pilot project follows on from the recent 3P reserves upgrade to 274 PJ and forms a key part of the Company’s 2P gas reserves campaign which is aimed at independently certifying New Zealand’s first tranche of 2P CSG reserves.

Commercial discussions with large industrial company’s regarding potential offtake arrangements are continuing.


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