L&M Petroleum's managing director John Bay said the first well in the program would be Eastern Bush-1 in the 1123 sq km Waiau Basin PEP 38226 north of Tuatapere.
Mr Bay said the well was expected to spud in early April and will be drilled to a total depth of about 2500m.
Eastern Bush-1 will be targeting a feature on the Tuatapere anticline which is closed over 4.9 sq km with a 550m vertical closure at the top of the late Eocene Beaumont Formation.
The report by Sydney-based independent geologist Global Capital Resources, published in the recent L&M Petroleum share float prospectus, estimates potential recoverable resources of 127 mmbbls oil in the Eastern Bush structure.
Under a farmout agreement, North Island energy company Mighty River Power has agreed to fund the drilling of the Eastern Bush well and in return will earn 50% of any discovery. It will also earn an option to drill a second well within the PEP 38226 area for which Mighty River would earn a 50% interest in the well discovery.
Mr Bay said that after Eastern Bush-1 the company plans to drill a gas prospect Dean-1 in the north-western part of the permit. The independent geologist estimates that the Dean prospect has a potential recoverable resource of 100 bcf in the Miocene turbidites which have developed in the Bellmount fault system.
Further seismic is being carried out to identify the best location to site the Dean-1 well.
After Dean-1, a well would be drilled at Merton Creek-1, just north of Eastern Bush-1. Though this was a considerably smaller structure than Eastern Bush it would target not only the Beaumont Formation but also the early Miocene Clifden limestone as a secondary target. The independent geologist says Merton Creek-1 has an estimated potential recoverable resource of 7mm bbls of oil.
Mr Bay said that a second well at Sharpridge Creek is also planned in the second quarter of 2007 using the Washington Exploration rig that was used to drill the Sharpridge Creek-1 well. L&M recovered small quantities of gas and traces of oil at Sharpridge Creek-1 last year. Dip meter data indicated the first well was drilled on the flank of the structure.
The independent geologists report says the shallow Sharpridge Creek prospect in the Beaumont formation has the resource potential in the order of 2-3 mmbbls of oil.
More seismic is also being carried out by L&M over this prospect to define the crest of the structure.
Another well, presently known as the "Eastern extension well," is currently being evaluated for possible drilling in the second half of 2007.
In addition to the new seismic data at Sharpridge Creek and Dean, L&M is also considering acquiring a program of new seismic over the wider Waiau Basin.
In 2008 the company also expects to drill a number of other prospects in PEP 38226.
In L&M Petroleum's Te Anau Basin permit (PEP 38230) the company is currently interpreting the seismic data acquired earlier in 2006 and hopes to drill it's first well later in 2007.
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