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L&M Petroleum revises estimated depth of Goodwin-1 coals

Thursday 11th September 2008

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L&M Petroleum, the exploration company seeking to tap global demand for coal-seam gas, has revised down the depth that it expects to intersect coal in its Goodwin-1 appraisal well.

The well is designed to test the coal-seam gas potential of the Morley coals in the Southland prospect. The coals are now expected to be intercepted at about 320 metres. Rather than the earlier estimate of 200 metres, the company said in a statement.

The company's Southland drilling program is seeking coal-seam gas resources of as much as 300 petajoules. L&M also today released its first-half report, in which it said it is in a strong financial position and well placed to continue progressing plans. It has working capital of about $12 million and no debt.

The company made a loss of NZ$2.7 million in the six months ended June 30.

Interest in coal-seam gas has been stoked by Australia's Origin Energy, which this week thwarted hostile suitor BG Group by agreeing to jointly develop its coal-seam gas assets in Queensland state with ConocoPhillips.

Shares of L&P rose 8.3% to 19.5 cents today, bringing their gain this year to 80%.

By Jonathan Underhill

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