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L&M had agreed to purchase the 75% stake of partner Mosaic Oil New Zealand, paying $264,000 and $400,000 to reimburse Mosaic its costs, plus a 15% royalty of net gas sales up to $A1.5 million ($NZ1.88 million), BusinessDay reported.
L&M chairman Geoff Loudon and his company New Dawn Energy yesterday gained the 90% shareholder acceptances they required, triggering a compulsory acquisition of the outstanding L&M shares. New Dawn will take over several methane coal gas exploration projects in South Otago and Southland, where millions of dollars have been spent in recent years on test drilling programmes.
The Kahili permit in Taranaki is a gas prospect and is yet to be proven commercially viable, but is adjacent to several other gas producing wells. It is scheduled to be test drilled by New Dawn shortly.