Progress Report on Kaitangata Multi-Well Coal Seam Gas

COMPANY ANNOUNCEMENT

19th March, 2012

Progress Report on Kaitangata Multi-Well Coal Seam Gas Programme

L&M Energy is wishes to provide the following update regarding its Kaitangata CSG appraisal programme within PEP 38219, located 60km south of Dunedin.

Taratu-1 is located approximately 3km to the west of Wangaloa-2 and is at a current depth of 137m, drilling towards an expected total depth of approximately 350m.

In parallel the drilling rig from Wangaloa-2, has been mobilised to the Washpool-1 site, located approximately 2 km to the north-west of Wangaloa-2. The well is at a current depth of 123m and drilling ahead towards an estimated target depth of 550m. The well is set to test the coal seam gas potential from five sub-bituminous coal horizons (Capstick, Jordan, Kai Main, Carson and Shore) within the coalfield.

Taratu-1 and Washpool-1 are the second and third wells respectively of a five well programme. The programme is intended to give sufficient data to determine the coal seam gas potential of the Kaitangata area.

ENDS

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