L&M Petroleum eyeing richer CSG pastures
IF listed junior L&M Petroleum succeeds in its plans to acquire all or part of private company L&M Coal Seam Gas or its assets, it will have more of the richer, deeper Cretaceous-aged Morley Formation coals that should spur development of the Southland resource.
L&M Petroleum commercial manager Chris McKeown told the 2009 New Zealand Oil and Gas Conference in New Plymouth yesterday that his company’s initial assessment of the coal seam gas contained within two onshore Western Southland Basin licences – PEP 38226 (Waiau) and PEP 38238 (Blackmount) – compared favourably with CSG found in Queensland.
L&M Petroleum has the Eocene-aged Beaumont Formation and deeper Cretaceous-aged Morley Formation within its CSG licences, but the Morley is not as prevalent as is the Beaumont.
An analysis of the Morley has indicated coal seams of up to 5m thick, with up to 4.2 cubic metres of methane per tonne of coal, within the L&M Petroleum leases.
However, the neighbouring Ohai licence PEP 38220 owned by the L&M CSG company contained more of the Morley coals than his company’s did, McKeown said.
Coal seams within the Ohai lease were up to 15m thick, with cumulative thicknesses of about 50m, and gas contents of up to 10 cubic metres of methane per tonne of coal.
“The Morley is a very rich source of gas, it’s excellent, there is greater potential for the Morley within L&M CSG’s licence,” McKeown said.
While L&M Petroleum believes three play fairways – Takitimu North, Takitimu South and Longwood – underlying its Waiau, Blackmount and Te Anau (PEP 38230) leases have the potential to contain up to 300 petajoules of CSG resources, L&M CSG is conducting exploration and production testing across its total CSG base that could contain more than 1500PJ of CSG resource.
Wellington-headquartered L&M Petroleum announced on Monday that it was looking at acquiring all or part of Christchurch-based L&M CSG, with L&M Petroleum managing director John Bay saying he believed a merger would allow a greater certification of possible CSG reserves and a subsequent aggressive development of a significant Southland CSG resource.
He also said L&M Petroleum might need to embark on a major additional capital raising program, perhaps bigger than its 2007 $A20 million initial public offering, to purchase L&M CSG.
Thursday, 10 September 2009
PNN
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