Coal Seam Gas Operations Update

Coal Seam Gas Operations Update

PEP 38220 (Ohai) – LME 100%

L&M Energy Limited (LME) is pleased to provide the following update on the drilling of the OM-4 well, which is currently drilling ahead at 996m.

The rig has successfully cored through the Beaumont and Morley coal measures, intersecting approximately 28 metres of gassy coal (based on field logging) and is now approaching basement at a current depth of 1,000m.

As previously reported the Beaumont coal measures were intersected at 597m with approximately 9m of coal cored through the section. The Morley coal measures were intersected at 758m and have now encountered 19m of gassy coal.

Results so far are very encouraging with 51m desorption samples taken for gas content and further laboratory analysis from the 28m of coal. OM-4 is a 2km westerly step out from previous drilling and should materially extend 3P reserves.

The well was programmed to be drilled to basement (originally estimated at 1,100m) in order to tie existing seismic lines and test for additional coal measures below the target Morley seams in the Ohai basin. OM-4 will be the first well to reach basement in this portion of the prospect and will therefore confirm the extent of the coal bearing sequence in the area.

Upon reaching total depth the well will be geophysically logged and then suspended for future recompletion as a production well.

Within the next six months the work programme for the Ohai area will include the drilling of a three to five well pilot programme to establish the company’s first tranche of 2P reserves and realise the identified near term commercialisation opportunities with industrial gas off-take partners. Immediately following the completion of OM-4, the rig will be mobilised to the North Island to complete the remainder of the current drilling programme.

ENDS

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