L&M Petroleum Starts Offshore Seismic Survey

MEDIA RELEASE – May 8th 2006

L&M Petroleum Starts Offshore Seismic Survey

On 7th May 2006, L&M Petroleum (L&M) started a 1,000 km offshore seismic survey in the Solander Basin south west of Invercargill estimated to cost NZ$2 - $3 million. This follows the successful reprocessing and reinterpreting of 3,000 kms of seismic data from earlier surveys. Four large prospects and numerous leads were identified and the current survey has been designed to enhance some of the larger targets prior to drilling. The survey is taking place in offshore Petroleum Exploration Permit 38228 which covers 4,450 square kms.

L&M also holds onshore Petroleum Exploration Permits 38226 and 38230 covering the Waiau and Te Anau Basins where seismic surveys and drilling programmes are in progress. The first two onshore wells drilled by L&M were Orepuki, completed in October 2005, and Sharpridge Creek #1 completed in February 2006.

Sharpridge Creek #1 is cased and ready for testing in late May.

Chairman of the L&M Group, Geoff Loudon, said….”The start of the offshore seismic programme is the next stage of a major Southland oil and gas programme. We are excited by the progress to date and are confident that L&M will discover oil and gas in the region”.

L&M is a privately owned New Zealand company. Established in Nelson in 1936 to explore and develop minerals and energy resources, L&M is now based in Christchurch and has 100% interest in the permits.

ENDS

Further details of the L&M Group can be found at www.lmgroup.net.nz

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