The company said yesterday that the Waiau Basin well had reached its target depth of 447m over the weekend and electric logs were run to total depth.

But interpretation of logs showed that the oil and gas shows recorded in the well were not commercially sufficient to justify development. The company has decided not test the well.

The oil and gas shows were encountered in the same zones to those encountered in the Sharpridge Creek-1 discovery well drilled in 2006, L&M said.

This suggests that Sharpridge Creek-1 and Sharpridge Creek-4 share a similar hydrocarbon system, whereas the Sharpridge Creek-2 and Sharpridge Creek-3 wells drilled earlier this year appear to be in a separate structural unit, according to L&M.

Results from the Sharpridge drilling program will be integrated into the planning for the 2008 Waiau Basin drilling campaign scheduled for mid 2008, for which a seismic acquisition program to confirm several prospects is currently underway.

Sharpridge Creek-4 is a follow-up to the 2006 Sharpridge Creek-1 discovery and to the Sharpridge Creek-2 and 3 wells drilled earlier this year.

The first Sharpridge Creek well encountered gas and oil shows over a gross interval of 120m in the Eocene-aged Beaumont Sandstone. The second was plugged and abandoned last May after encountering basement higher than prognosed, while the third recorded fluorescence and fair oil shows within interbedded coal seams before also being plugged and abandoned.

All Sharpridge wells are in the eastern portion of licence PEP 38226, which L&M operates and holds 100% interest in.