Listed L&M Mining expects to start a five-month $2 million above-ground seismic testing programme which could include up to eight test drilling holes in its search for coal seam gas in Western Southland this month.
The above-ground seismic testing will determine the extent of drilling, but at least four test drilling holes will be undertaken with up to a further four possible within the $2 million budget, L&M chief executive John Bay said yesterday.
Earlier coal-bed analysis had identified areas containing Beaumont coal, which was highly prospective for economic coal seam gas reserves, present in three areas covering a distance of about 85km within L&M's permits, spanning from south of Te Anau to Riverton on the coast known as Takitimu North, Takitimu South and Longwood.
"The 15km seismic programme will be run in parallel to the drilling operations so that the locations of subsequent coal seam gas wells to be drilled can be confirmed," he said.
The first test drilling is scheduled for the next three to four weeks at Meadow Creek-1, near Ohai, then northwest about 25km at the Wairaki-1 prospect.
L&M raised $23.2 million in a share float in January last year and had spent more than $7 million on both onshore and offshore exploration around Southland.
In May, L&M was granted a 650sq km exploration permit in the onshore Westland basin near its existing West Coast exploration permit near Hokitika to look for oil.
Seismic testing is planned in the area to determine promising drilling targets, which could begin in late 2009 or 2010.
