Monday 15th September 2008
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The company extracted 14 core samples of coal with no observable decline in pressure, according to a statement today.
According to the field geologist, the cores are "fizzing with gas," managing director John Bay said. "We'll have to wait for the formal lab analysis to be completed to know what we have for sure but we are certainly excited about what we have seen so far."
The well encountered the Morley Formation coal seam at 254 metres and was coring at 296 metres as of this morning. The main target of the well, the Linton Main Seam coal was encountered at 272 metres with a further seam at 282 metres. The total net coal was 9.2 metres thick, 50% more than expected, it said.
The revised depth is now 360 metres, it said. L&M plans to drill up to eight wells in 2008 to gauge the extent of the coal seam gas potential in its permits. Initial analysis in the onshore Western Southland Basin indicates potential reserves of 300 petajoules, it said.
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 fell 9.6% to 18 cents today and have soared almost 100% this year.
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