The Christchurch-based company Kenham Holdings Ltd, associate of South Island gold mining company L&M Mining Ltd controlled by London-based minerals investor Geoff Louden, was last year granted the PEP 38226 permit in Western Southland.
The permit and a recent extension covers a 995 sq km area along the Waiau Basin from the coast towards Lake Manapouri. The permit adjoins the Ohai coal seam gas permit PEP 38220 also held by Kenham.
David Manhire, exploration manager for Kenham and L&M said that the company wanted to further its energy interests and has applied for an offshore permit in the Solander Basin south of its current permit.
The company is employing technical petroleum consultants for its petroleum program.
Mr. Manhire said there were two defined prospects and three leads in its PEP 38226 permit. The company planned to collect more seismic data and has plans for more than one well in the permit.
He said results were still being evaluated from the first stage of the coal seam gas program which comprises preliminary drilling in all 12 permits which Kenham holds. The Ohai permit PEP 38220 was the farthest advanced with commercial production rates regarded as very achievable.
In the case of the Hawkdun lignite field in central Otago, which was initially ranked as marginal, modelled gas flows indicate that production on a per-well basis may be achievable at similar rates to the Powder River Basin in the US where large-scale gas production from lower ranked coalbeds was first proven.
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