L&M eyes CSG ‘sibling’
LISTED junior L&M Petroleum is acquiring all or part of private company L&M Coal Seam Gas – the largest individual CSG permit holder in New Zealand – or its assets.
“It makes sense for us to pursue this and to examine the options available to us to ensure the most rational and economic approach possible for the possible development of our common CSG resources,”
L&M Petroleum managing director JohnBay told PetroleumNews.net from Wellington today.
L&M Petroleum managing director JohnBay told PetroleumNews.net from Wellington today.
He said the two companies held adjacent interests in the onshore WesternSouthlandBasin where both companies were looking at certification of possible CSG reserves, and an aggressive development of this significant Southland CSG resource looked to be in the best interests of both companies.
This was the initial basis for discussions on possible mergers of the CSG, and possibly corporate, assets of the two companies – to evaluate the whole of the Takitimu CSG trend and consider how to maximise the value of that.
L&M Petroleum used to be part of the Christchurch-headquartered private L&M Group until its January 2007 listing on the Australian Securities Exchange and New Zealand Exchange.
L&M CSG remains part of that group and is now New Zealand’s largest individual CSG permit holder, with a diverse portfolio of projects across the NorthIsland and SouthIslands.
L&M CSG is conducting exploration and production testing activities across its permit base that aims to delineate a resource of more than 1500 petajoules of CSG resource, while L&M Petroleum is also evaluating the possible 300PJ of CSG within its southern permit.
Certification of reserves is underway within L&M CSG’s PEP 38220 (Ohai) permit, while the focus of L&M Petroleum’s recent CSG exploration has been the adjacent PEP 38226 (Waiau) permit, containing the conventional Otahu deep gas prospect and the Takitimu South CSG trend.
Due to cross shareholdings between both companies, a committee of independent directors – Doug Elenor, Trevor Taylor and Charles Lutyens – will continue discussions with respect to this and any subsequent acquisitions.
“L&M Petroleum reiterates that these discussions are incomplete in nature and the company will continue to comply with its continuous disclosure obligations,” Bay added.
Non-executive L&M Petroleum chairman , London-based Geoffrey Loudon, and Christchurch-based director Greg Hogan have stepped aside from the process to ensure its transparency.
Meanwhile, L&M Petroleum has reported an $NZ1.54 million ($A1.24 million) net loss for the June 2009 half-year.
Income was only $NZ290,000 while expenditure was $NZ900,000, mostly from costs associated with drilling the coal seam gas wells Belmont-1, Bogle-1, Mount Linton-1 and Mt Linton-2 in the company’s onshore Western Southland licences PEP 38226 and PEP 38228.
Monday, 7 September 2009
PNN
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