Goodwin-1 Well Reaches Total Depth

COMPANY ANNOUNCEMENT

For Immediate Release
Thursday, 18 September 2008

Goodwin-1 Well Reaches Total Depth

L&M Petroleum (LMP) is pleased to announce that as at 11:30 am on 18 September, the Goodwin-1 well has reached its final total depth of 360m and is preparing the hole to run electric wireline logs.

A total of 11m of coal was recovered from the Morley Formation during coring operations. Samples were preserved in 15 pressurised containers and have been sent to CRL in Christchurch to undertake coal characterization and gas desorption analysis. Several other minor coal seams were encountered during the drilling operations but only seams greater than 1m in thickness will be selected to undergo gas analysis.

All objectives of the well have been met, and the presence of gas-bearing coal seams in the most northerly part of the Ohai Graben has now been confirmed.

Upon completion of electric logging of the Goodwin-1 well, the Washingtons #8 drilling rig will be moved to the Wairaki drilling location in the adjacent permit, PEP 38238 (Blackmount), where it is programmed to drill two stratigraphic test holes to establish the depth of the top of the Beaumont coals in the northern end of the Takitimu South trend. A third well will then be drilled to obtain cores of the entire coal sections. The first stratigraphic well, Wairaki-1, is expected to commence drilling operations Monday, 29 September.

The Goodwin-1 well, located in the eastern portion of petroleum exploration permit (PEP) 38226 (Waiau) adjacent to the proven Ohai coalfield (see map), is the first of up to eight wells the Company plans to drill in 2008 to determine the extent of the potential coal seam gas resources contained within its onshore Western Southland Basin permits in the South Island of NZ. The Company’s initial technical analysis indicates its permits could hold up to 300 PJ of CSG resources.

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$20 million in a fully underwritten Initial Public Offering. The Company is currently carrying out an aggressive conventional exploration programme focused on discovering major oil and gas resources in the South Island of New Zealand. The Company is also embarking on a multi-well drilling campaign to confirm the coal seam gas resources in its onshore permits in the Western Southland Basin. L&M Petroleum is the only exploration company in New Zealand pursuing both conventional oil and gas and coal seam gas. The Company has equity interests in four permits in the Western Southland Basin and in two permits in the onshore Westland Basin of New Zealand and is the Operator of all of its joint ventures. The Company is well funded with ca. NZ$ 10 million in cash available to undertake its work programs.

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