Thursday 4th September 2008
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L&M agreed to join Perth-based Salinas Energy's San Joaquin Basin light oil prospect, giving it the right to earn a 20% working interest in leads and prospects in the area, it said in a statement. The first well in the programme will test the Osso Bucco prospect, targeting 18 million barrels of oil equivalent of light oil and gas.
Salinas is testing whether Osso Bucco is an extension to the Paloma Oil and Gas Field, which has produced 60 million barrels of oil and 400 billion cubic feet of gas, it said. The cost of the well is about US$4.4 million.
Salinas has contacted a rig capable of drilling the prospect in the final two months of 2008.
Shares of L&M have soared 90% this year and traded yesterday at 19 cents. The company went public in January 2007 after raising A$20 million in an initial public offering.
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