L&M Petroleum begins coal-seam gas search as demand surges

Tuesday 5th August 2008

L&M Petroleum, an oil and gas explorer listed on the NZX and ASX, will drill the first three wells in its South Island search for coal-seam gas, a fuel that has spurred a takeover battle in Australia.

L&M is targeting 300 petajoules of gas from its permits in the Southland region. The three wells will be drilled to a depth of just 250 meters, it said in a statement.

The company plans to drill a total of eight wells this year to help confirm the extent of reserves, it said. The search is in addition to its existing oil and gas exploration.

BG Group Plc of the UK is making a hostile A$13.8 billion bid for Australia's Origin Energy, Australia's biggest coal-seam gas producer, to add supplies for sales of LNG into Asia.

By Jonathan Underhill

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