Coal-seam gas explorer L&M Petroleum will not resume its summer season test drilling programme in Southland until a decision is made on a merger with sister company L&M Coal Seam Gas Ltd, or another combined, new entity is formed.
The group announced in late August it was considering listing a new company on the New Zealand and Australian stock exchanges to raise $A30 million ($NZ36.3 million) in an aggressive bid to underpin a year-long coal-seam (methane) gas exploration programme in Southland.
L&M Petroleum, which has spent $13 million on exploration, has similar assets and targets as L&M Coal Seam Gas Ltd, which has drilled 11 test holes at its permitted areas in Ohai, Winton, Kaitangata and Hawkdun, in Otago and Southland.
Petroleum chief executive John Bay said this week the programme was "on hold" while "discussions continued" over the proposed merger.
If a merger were to go ahead, the combined assets would be reassessed before co-ordinating a larger drilling programme.
In early August, L&M completed test drilling at the second of seven test holes in Southland and, at 225m, had hit the top of a coal seam.
It planned to carry on to a depth of 400m then stop, restarting this month in better weather.
At the time, L&M said it planned three onshore seismic programmes, worth $300,000, in Southland, the West Coast and Taranaki in early 2010, covering 100km of seismic work.
