L&M managing director Greg Hogan today said the encouraging results from the Sharpridge Creek well in licence PEP 38226 confirmed the existence of oil and/or natural gas in the Waiau Basin.

He said the well had been cased for testing at a total depth of 517m. Results from the well showed fluorescence in the drill cuttings and gas was detected in the target Beaumont Formation and the underlying Morley Formation.

Three separate sandstone zones between 328m and 369m, were perforated and tested for hydrocarbons and flowed gas-cut water, as well as an oil scum that was recovered from the lowest zone.

Analysis of the dissolved gas indicated that the upper two zones were methane-rich, while the lowest zone contained high levels of gaseous higher hydrocarbons C2 to C8.

He said these flows indicated reservoir quality sandstones that were capable of sustaining commercial production of oil and gas.

Analysis of Beaumont Formation coals from this well also revealed oil in coal that was interpreted to have migrated from deeper in the Waiau Basin.

L&M recently reprocessed and reinterpreted about 60km of seismic lines in the Waiau Basin Permit, and to date seven prospects and eight leads requiring further definition had been identified.

“L&M Petroleum is confident that ongoing work utilising geological mapping and seismic survey methods will identify more prospects and leads,” Hogan said.

“The Waiau basin permit is also regarded as being highly prospective for coal seam gas hosted in Beaumont and older coals.”

L&M Petroleum is a Christchurch-based explorer with three 100% owned and operated petroleum exploration permits covering 7166 square kilometres onshore and offshore of Southland.

The company is spending about $NZ5 million ($A4.2 million) this year on an offshore 2D Solander Basin seismic survey, an onshore seismic survey in the Te Anau Basin, and drilling two wells in the Waiau Basin.