L&M Petroleum Spuds Dean-1 Well

L&M Petroleum Spuds Dean-1 Well

L&M Petroleum Limited is pleased to announce that at 2300 hours on 24 May 2007, it commenced drilling the Dean-1 exploration well, the Company’s second deep well within Petroleum Exploration Permit (PEP) 38226 in the Waiau Basin, Western Southland District, New Zealand.

The Dean-1 well is designed to test the hydrocarbon potential of the McIvor Formation on the Bellmount Thrust Fault trend. The McIvor Formation is the equivalent of the Tikorangi Limestone which is a prolific producer in the Waihapa/Ngaere field in onshore Taranaki. The target horizon is expected at a depth of 1,313 m and total depth for the well is planned to be 2,100 m.

As described in its Prospectus dated 24 November 2006, the Company hopes to test the McIvor Formation in the Dean-1 well for potential gas resources of 194 billion cubic feet (bcf) on a best estimate basis of original gas in place (OGIP).

L&M Petroleum is drilling the Dean-1 well under the terms of the Option and Farmout Agreement dated
17 July 2006 between the Company and Mighty River Power Limited, whereby Mighty River Power earns a 50% participating interest in the whole of the Waiau Basin Petroleum Exploration Permit (PEP) 38226 (except the Sharpridge Creek Prospect) by contributing 100% of the costs of drilling the Dean-1 well.

ENDS

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