L&M Energy Provides Updates on its CSG Activities

New Zealand’s L&M Energy Friday provided fourth quarter updates on its unconventional gas activities and said that its Ohai coal seam gas production testing programme which commenced during the quarter is now complete and the well will be re-equipped and brought back onto production.

The company also said that during the quarter, a new CSG appraisal programme commenced with up to six stratigraphic and appraisal wells to be drilled in Kaitangata. The programme is designed to test the coal seam gas potential from five sub-bituminous coal horizons (Capstick, Jordan, Kai Main, Carson and Shore).

The first well, Wangaloa-1, was suspended at 507m as the well reached the drilling rig’s depth capacity. LME may elect to mobilise a larger rig to continue drilling to basement at a later date. The second appraisal well, Lockington-2, reached a total depth of 315m after intersecting approximately 8.6m of cumulative coal across four coal seams. A total of thirteen cored coal samples were taken for further analysis, including measurement of gas content and saturation levels.

A further, two stratigraphic wells, Kai-21 and Kai-22 were drilled during the quarter. Kai-21 confirmed 17.40m of net coal in three seams between 63.40m and 84.65m which correlated with the Kai Main and Carson seams. Kai-22 reached a total depth of 166m, with 17.60m of coal encountered in the lower seams between 136 and 158m. These seams are also correlated with the Kai Main and Carson seams to the south. The stratigraphic wells were located to the north of the coal field so as to determine the aerial extent of the Kai Main and Carson seams.

The drilling rig was demobilised at the end of the quarter and will likely recommence the programme mid Q1 2012.