Ohai Coal Seam Gas Pilot Project Progress

18th January, 2011

L&M Energy Limited (LME) is pleased to announce that drilling has resumed at the Ohai pilot project after being suspended during the Christmas and New Year period. The programme is to drill and then install 95/8” surface casing to a depth of approximately 80m within both lateral access wells.

Once casing is installed the rig will then be relocated to complete vertical production well, OM#5, where surface casing was installed prior to the holiday break. OM#5 will then be drilled to a total depth of ~750m intersecting the thick target coal seam, Morley #2.

The two horizontal lateral wells will then be extended to intersect OM#5 using proven directional drilling methods. Each of the lateral wells will pass through approximately 700m of coal with the gas they produce to be extracted from OM#5. The pilot project follows on from the company’s 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.

ENDS

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