Sharpridge Creek-4 well drilling progress report

COMPANY ANNOUNCEMENT

16th October 2007

Sharpridge Creek-4 well drilling progress report

The Sharpridge Creek-4 appraisal well, after reaching a final total depth of 447m, will be plugged and abandoned. Interpretation of the logs showed that the oil and gas shows recorded in the well are not commercially sufficient to justify development.

A decision was therefore made to not test the well. The oil and gas shows were encountered in the same zones to those encountered in the Sharpridge Creek-1 discovery well drilled in 2006, further suggesting that Sharpridge Creek-1 and Sharpridge Creek-4 share a similar hydrocarbon system, whereas the Sharpridge Creek-2 and Sharpridge Creek-3 wells drilled earlier this year appear to be located in a separate structural unit.

Results from the Sharpridge drilling programme will be integrated into the planning for the 2008 Waiau Basin drilling campaign scheduled for late Q2 2008, for which a seismic acquisition programme to confirm several prospects is currently underway.

About L&M Petroleum Limited

L&M Petroleum Limited is incorporated in New Zealand and dual listed on the ASX and NZX on
11 January 2007 after raising AUD$20 million in a fully underwritten Initial Public Offering. The Company holds three onshore and one onshore/offshore petroleum exploration permits in the Western Southland Basin of the South Island of New Zealand, and is carrying out an aggressive exploration programme focusing on the discovery of major oil and gas resources.

ENDS

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