Dual-list L&M Energy is this week set to begin drilling the first of five wells near Kaitangata in South Otago in its continued search for commercial quantities of coal-seam methane gas.
The drilling programme to date included four wells completed during the last quarter of 2011, where two were drilled to determine coal-seam depth and thickness and two core wells, with gas saturation results expected by about April.
LME managing director, Kent Anson, said the drilling programme for the first half of 2012 was due to start this week with the well Wangaloa-2, the first of five to be drilled in a northerly and potentially deeper portion of the permit; which is 60km south of Dunedin.
"We have a thick sequence of sub-bituminous coals with good permeability and what remains to be determined is the gas content and degree of saturation at depth," Mr Anson said in a statement released this week.
The Kaitangata coal field is "ideally placed" to potentially supply power generation to significant agriculture and domestic demand as well as deliver CNG to a strong local market, he said.
"I remain optimistic that the Kaitangata area holds commercial gas close to a ready market," he said.
The test-drilling results during the next six months would be a good guide to determine the potential of the area, he said.
