Fireball Creek-1 Well Drilling Operations to Recom

Fireball Creek-1 Well Drilling Operations to Recommence

On 25 February, the Fireball Creek-1 well, located within Petroleum Exploration Permit (PEP) 38521 in the onshore Westland Basin of the South Island of New Zealand, was temporarily suspended at a depth of 56m due to safety concerns with some of the equipment.

The Company is pleased to announce that the necessary repairs and upgrades have now been completed. Remobilisation of the drilling equipment to the Fireball Creek-1 well site will begin today and drilling operations are expected to recommence this weekend.

L&M CEO, John Bay, said, “The repair work has taken longer to complete than originally estimated due to the high work loads, and staff shortfalls, that the various service companies are currently experiencing. However, we are pleased that the work has been done to a high standard and that we can now get back to drilling this exciting prospect. Once drilling operations are recommenced, we expect the well to take about 10 days to reach the planned total depth of 450m. We will, of course, be providing the market with regular updates of drilling progress.”

The Fireball Creek-1 well is programmed to drill to a total depth of 450m to test an Omotumotu Sandstone structure containing potential gas resources of up to 40 Bcf.

LMP has entered into a farmin agreement with several of the PEP 38521 Joint Venture parties under the terms of which LMP will earn 32.5% equity in PEP 38521 and become Operator to the joint venture by funding a portion of the cost to drill the Fireball Creek-1 well.

Post drilling of the Fireball Creek-1 well, the PEP 38521 Joint Venture parties will be:
* L&M Petroleum Ltd (Operator) 32.500%
* Twinza Oil Ltd 35.000%
* McKenzie Petroleum Ltd 8.125%
* EF Durkee and Assoc. 8.125%
* GRDC Inc 8.125%
* Labrador Energy Inc 8.125%

ENDS

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 is currently carrying out an aggressive exploration programme focused on discovering major oil and gas resources in the onshore and offshore Western Southland Basin and the onshore Westland Basin of the South Island of New Zealand.

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