L&M Energy to Spud Free Carried Taranaki Well

[hidad]

You cant get better than this and still very cheap before the drill hits the ground.

[hidad]

17 June, 2011

L&M ENERGY TO SPUD FREE CARRIED TARANAKI WELL

Project Highlights

- Talon-1 (PEP51151: LME 50%), to be spudded on 1st July as the first of a multi-year, multi-well Taranaki Basin drilling initiative

- LME to be 100% free carried for full well cost

- Targeting 2mmbbl oil (recoverable) in structure adjacent to producing oil field

- Multiple further targets on 482.4km2 permit


L&M Energy Limited (ASX: LME) is pleased to advise that its Taranaki (New Zealand) drilling programme will begin with the commencement of Talon-1 drilling operations on 1st July.

The 1450m Talon-1 well is targeting mean reserves of 2mmbbl oil (recoverable) in shallow Manutahi sands in a structure geologically identical to the adjacent Manutahi Oil field operated by Origin Energy (estimated recoverable reserves of 4mmbbl).

Talon-1 is the first well to be drilled on the 482.4km2 permit, which also contains multiple further drilling targets.

As announced on 1st June, L&M will be free carried through the drilling of the well (subject to final documentation and regulatory consents).

LME Chairman, Mr Geoff Loudon, said, “We are extremely pleased to have negotiated a free carried drilling opportunity in such close proximity to a producing oil field – not only can we look forward to quick results from the drilling, it also has the potential to add huge value to the rest of this very large permit position within which we have already defined a number of follow up targets”.

ENDS

[hidad]

LME doing good today with still alot more to come , oh thats right you guys just stick to your safe blue chip stocks but like i said before there is money to be made here if you get in before the drilling starts.

[kerinz]

Also great potential for the CSG field in Southland. The 1MW pilot plant should be up and running in few months.

[hidad]

That is so true Keri , its good to see someone else in here besides me. If all goes well with the CSG and the up coming drill you and i will be alot better off. Its all abit low key at the moment and most people will only get to no about this company after the fact. Still a very good time to get in, anything under 20c now is a great buy if that drilling comes up trumps.

[BWH]

Looks like they're having a few problems in Ohai. http://www.stuff.co.nz/southland-times/news/5174777/Coal-seam-gas-production-held-back-by-hitches

[sharer]

Thanks BWH for that link to Southland Times, plain language report clears up some of my doubts on recent news.
I took a small speculative parcel when L&M first started exploring Southland & have been especially interested in the Ohai csg project.
Of course the company reconstruction/consolidation, and the activities so exciting Hidad in Taranaki etc all make L&M increasingly interesting.
I like their Southland project much more than the huge CoalCorp schemes, briquetting etc, which seem much more threatening to my old environment down there.

[hidad]

Thanks for that BWH please keep us posted if you hear more. The clean-out (scheduled for next month) is aimed at optimising water flow rates and improving set-up of down-hole equipment, both very common operations in CSG projects.

To take advantage of the availability of a work-over rig the nearby OM#1 and OM#3 wells will be recompleted and converted into production wells. By including these additional wells as part of the Pilot it is expected that this will assist in expediting the dewatering process and promote early gas production.

Preparations are continuing for the installation of a 1MW power station at the project site. The 1MW generator has arrived in country and is undergoing pre-delivery work before being relocated to the project site for commissioning.

In parallel, connection to the existing nearby electricity network is proceeding as planned, with the signing of a connection agreement with the local electricity network company and finalisation of site preparation plans.

[BWH]

The latest investor report certainly sounds optimistic, with a few promising projects on the go. I still can't imagine the share price doing much until actual production occurs, but the groundwork is certainly being laid.

[hidad]

What do you mean not doing much , it hit 16c today thats 33% up on the 12c it was not to long ago, try and get that on your blue chip shares in a week. Production is one thing but its also the thrill of the drill what they could find down there which makes the share price increase cos people dont want to miss out and getting in now is the right thing to do for hopefully a great return.

[hidad]

All going well, spud tomorrow Taranaki well.

[hidad]

L&M Energy Spudding Talon-1 Well

COMPANY ANNOUNCEMENT

5th July, 2011
L&M Energy Spudding Talon-1 Well

L&M Energy Limited (ASX/NZX: LME) is pleased to advise that Talon-1, the Company’s first well in the Taranaki Basin, will spud this evening following finalisation of rig set up operations.

Talon-1 is the first well to be drilled on the 482.4km2 permit, which also contains multiple further drilling targets.

The 1450m Talon-1 well is targeting mean reserves of 2mmbbl oil (recoverable) in shallow Manutahi sands in a structure geologically identical to the adjacent Manutahi Oil field operated by Origin Energy (estimated recoverable reserves of 4mmbbl).

As announced on 1st June, LME will be free carried through the drilling of the well (subject to third party final documentation and regulatory consents).

ENDS

[hidad]

COMPANY ANNOUNCEMENT

11th July, 2011

Talon-1 drilling update

L&M Energy Limited (ASX/NZX: LME) advises that the Talon-1 exploration well in PEP51151, onshore Taranaki, New Zealand (LME: 50%) was this morning at 510 metres. Surface casing has been set to 507 m and the rig is currently being set up in preparation for drilling ahead to the target depth of 1450 m.

The well is targeting mean reserves of 2 mmbbl oil (recoverable) in shallow Manutahi sands in a structure geologically identical to the adjacent Manutahi Oil field operated by Origin Energy (estimated recoverable reserves of 4mmbbl).

Talon-1 is the first well to be drilled on the 482.4 km2 permit, which also contains multiple further drilling targets. As announced on 1st June, LME will be free carried through the drilling of the well (subject to third party final documentation and regulatory consents).

[BWH]

Not such a good announcement from Talon-1 today...

[BWH]

More from Ohai.

http://www.stuff.co.nz/southland-times/news/5329709/Water-from-wells-needs-treating

[blockhead]

Anyone feel positive about the Kaitangata drilling programme just started ?

Kai is known as a "gassy" field so I guess the trick is to get that gas flowing along a pipe

Billy Boy lurks in that area from time to time, put your ear to the ground and see what the thoughts are BB

[kerinz]

What is happening with Ohai? Should have been operating the 1MW pilot plant by now!! They were having problems establishing the gas flow?

[blockhead]

Yes it should have been operating by now I would have thought, an update wouldn't go amiss

[Billy Boy]

Anyone feel positive about the Kaitangata drilling programme just started ?

Kai is known as a "gassy" field so I guess the trick is to get that gas flowing along a pipe

Billy Boy lurks in that area from time to time, put your ear to the ground and see what the thoughts are BB
Hi Blocky
I would'nt be running of buying heaps..... Just Yet !!
Kaitangata is a very small and rather depressed township,(but nice) so you can imagine the "Pub Talk"
is very up beat. The big time boys are comming to town etc etc.
Those (knowledgables)who are taking the wait and see attitude are not so upbeat.
Comments floating about :-
"this fracking causes earthquakes, susidance, etc."
" They (L&M) dont have enough money. ;)
They are waiting to see how Southland is going to react too Solid Enegey
"solid enegey will take them over, and thats what they want
That sort of stuff.
My thoughts .....
The coal is certainly there and in reasonable quantitys. Talking with an old miner,
"yes the seams are quite gassy"... etc
so the area appears to be a reasonable prospect, But lets see how the drills go !!
The coal is not the good quality stuff, like they get over the coast, very similiar
to the Ohai coal.
cheers Blocky, catch up again soon.:)

[BWH]

Announcement from today re. the Ohai project:

L&M Energy Limited (ASX/NZX:LME) wishes to provide the following update for
its Coal Seam Gas (CSG) Pilot Project at Ohai in the South Island of New
Zealand (PEP38220).

Operations at the Pilot Project are continuing, with a well work-over
programme currently underway. Although LME is pleased with the thick gassy
coals encountered in the OM#5 well, production rates to date are lower than
modelled and the latest work-over programme is aimed at determining the
variances between actual and modelled production rates.

The programme will be initiated with a series of tests to reaffirm the
connectivity between the lateral and vertical production wells with further
tests involving individual coal seams. Before commencement of the programme,
production equipment will be removed and the well will be cleaned out to
total depth.

While early stage technical challenges are not uncommon among pilot projects
and CSG operations in general, LME is committed to trialing and refining the
different well designs and completion techniques applicable to the Ohai
project. It is expected that this test work is likely to be ongoing until the
end of Q4 or until the issue has been satisfactorily resolved.

Once resolved, LME then intends to commit to the remaining large capital
expenditure items for the pilot power station on the basis of a positive
outcome from this testing process. Outstanding procurement and construction
activities will occur upon the establishment of reliable production data with
completion of the station being timed so as to be available in line with the
power station fuel gas requirements.

[blockhead]

I note a bit of interest on the buy side of LME, maybe things are going ok at Kai ??

[BWH]

A bit on the sell side too. I suspect people will be a bit wary until after the election. Labour's policies could impact on L&M's plans considerably. Particularly with their anti-fracking murmurings and the fact they will only get in with the Greens support.

[pietrade]

Fracking sure is getting some - largely negative - attention on You Tube. Punchy music...........

http://www.youtube.com/results?search_query=fracking+song&oq=fracking&aq=3&aqi=g4&aql=&gs_sm=c&gs_upl=5346l7757l0l16331l8l7l0l2l2l1l351l1474

[elZorro]

Anyone know anything about this Kahili exploration drill? Looks promising, and easy money if the drill works, strong cashflow within 12 months.

http://www.asx.com.au/asxpdf/20120118/pdf/423tgtjxf69k26.pdf

Mosiac Oil (holds 75% of the permit JV) is a small producer, bought out by AGL in 2010 for $123mill, AGL being Aussie's biggest energy retailer. More background on Kahili.

(http://www.3news.co.nz/Mosaic-and-LM-to-take-a-new-crack-at-oil/tabid/423/articleID/239948/Default.aspx)Discl:Bought some LME today, looks too cheap.

[notie]

The only problem is L&M are cash strapped and don't have the money to drill any wells. I give them 6 months before they implode



Anyone know anything about this Kahili exploration drill? Looks promising, and easy money if the drill works, strong cashflow within 12 months.

http://www.asx.com.au/asxpdf/20120118/pdf/423tgtjxf69k26.pdf

Mosiac Oil (holds 75% of the permit JV) is a small producer, bought out by AGL in 2010 for $123mill, AGL being Aussie's biggest energy retailer. More background on Kahili.

(http://www.3news.co.nz/Mosaic-and-LM-to-take-a-new-crack-at-oil/tabid/423/articleID/239948/Default.aspx)Discl:Bought some LME today, looks too cheap.

[elZorro]

The only problem is L&M are cash strapped and don't have the money to drill any wells. I give them 6 months before they implode

Hmm, isn't obtaining shareholder funds for exploration the reason LME is publicly listed? It's still majority owned by insiders, and everywhere I look they seem to be investing, or have reasonable chunks of other explorers. They're probably a good colour presentation away from a cash reinjection, if that's what's needed. Seems to be how these things work.

[elZorro]

I've had a bit of a look at the Kahili permit on the web. First, here's some 2000 background on gas/oil in Taranaki, from NZPAM. (http://www.nzpam.govt.nz/cms/pdf-library/petroleum_references/hart-article.pdf) There is mention of a 'Tarata reverse fault' being prospective for years, and the first big drawing shows a North-South trending gas/condensate block that runs right through Taranaki, inland from the Mountain. Just below Tarata itself is the Mosaic-LME JV permit 53247, a 599Ha rectangular block that can be accessed off Motukawa Road.

This location is 12-14km East of Inglewood (a dairying area), but it's up in the hills, looks like sheep/beef country at that stage. Sure enough, when you look at the area on satellite view, you can see a gas pipeline that presumably terminates at the capped Kahili-1B wellhead (No, this is a small hydro scheme). The permit is surrounded on all sides by other permits.

I had a quick look at the permit requirements. There is no need to drill an exploration well until near the end of the five years, but within about 1 year of getting the permit, a lot of intensive mapping work has been done, and they're getting ready to drill at a new site. I think they can taste success here.

[elZorro]

Here's more detail from L&M's press release, and so I've guessed (incorrectly) about what the satellite map shows. L&M /Mosaic won this contestable permit, and the govt put out a press release about it at the time, giving more info on what happened to Kahili-1B - it was flooded with water. NZPAM suggested there is still promise in the area, and it's on privately-owned ground.

http://www.nzherald.co.nz/northland/news/article.cfm?l_id=139&objectid=10625406

The area is known as Tariki Sandstone Reservoir. Some papers have been written about it, but they are too boring to show..

Trustpower seem to have a range of small hydro stations around here, and one is shown inside the permit. The pipeline is the penstock connected to a surge chamber.

OK, cracked it.. the Kahili 1B wellsite and treatment area is off Kohete Road, on the other side of the permit. http://www.trc.govt.nz/assets/Publications/technical-reports/oil-and-gas-compliance-monitoring-reports/175237.pdf

This 2006 report states the well is closed off to allow pressure buildup, and there might be another well drilled at some stage.

[elZorro]

Third time lucky I hope, here are some more accurate maps of the Kahili infrastructure, one end anyway. The well head is disguised as some grass I think (or it might be near those emergency water ponds).

Plant capacity: Vector public info. (http://gasindustry.co.nz/sites/default/files/u12/Kahili_vector.pdf)

The smallish plant can process up to 3.5PJ per annum (of gas?), and at about $8 per GJ, that's close to $25million per year. It can also? process 430 bbl (barrels) of oil a day, which would be worth another $15mill per year. It would take 3-6 months to recommission the plant, so if this is to happen by the end of 2012, the drilling will be taking place soon. Can't see any timelines for the drilling on the web.

From the latest quarterly activities report in late January:


PEP 53247 (Kahili) is located in the onshore Taranaki Basin. The participants in the permit are L&M Energy Limited (25%), and Mosaic Oil NZ Limited (75%), a wholly owned subsidiary of the Australian company AGL Energy Limited.

The Kahili Field was discovered in 2002 and the previous permit holder initially achieved commercial gas and condensate flows. In anticipation of production, a processing facility and pipeline connecting to the gas network was constructed by NGC (now Vector Ltd) and is currently under a care and maintenance programme.

In 2011 the Joint Venture acquired over 30km of new high quality 2D seismic, reprocessed over 200 km of existing 2D seismic data, undertook a comprehensive geological and reservoir modelling study and mapped an encouraging drilling target.

Vector Gas & Condensate Processing Plant - Kahili
The Joint Venture has made the commitment to drill a new well in the Permit prior to end 2012. If the well is a commercial success the Joint Venture aims to bring the field back to commercial production in 2013 via the pre-existing production station.


The separation plant was completed by NGC in about August/Sept 2004, at a full cost of about $9mill. Here's an article about that:

http://www.rigzone.com/news/article.asp?a_id=15775

Since 0.18bcf of gas and 5,530 barrels of oil were produced before flooding closed down the Kahili 1B well, this was only a few days production if the treatment plant was 'full bore'.

Production had stopped by December 2004, but this article just mentions a pressure drop, not flooding by water.

http://www.rigzone.com/news/article.asp?a_id=18829 Looks like NGC/Vector can be useful providers of advance finance for permit holders.

TAG oil (TSX: TAO) has had a 12-drill 100% result with nearby wells, tripled its income and has no debt. Just lucky?

http://www.sharechat.co.nz/article/71fe8c92/tag-oil-s-earnings-leap-as-wells-come-on-stream.html

From LME's website, a presentation in June 2011 (http://www.lmenergy.co.nz/download/LME%20Investor%20Presentation_June%202011.pdf?inli ne). Shows a photo of the treatment station, more detail about Kahili and lots of other bigger permit areas.

[Crypto Crude]

notie,
you are a wombat...

I've been thinking pretty closely about purchasing some LME... yesterday I looked at the ASX energy index list of all energy stocks... I studied through all of them, and skimmed the ones I knew...
And not much really stood out, but LME did catch my attention...

with Kalihi nearing closer the share price hasn't moved an inch, looks very solid for a besbs play at least, but the share price is at major lows and historically, the sp has bounced every time off the lows...
Looking past a BESBS play, Kalihi stacks up...
and with infrastructure in place, this could be a nice boost of hype for a trade...

as Usual, I can't make my mind up.. and Ive recently bought some OXX and looking at KEY, and thinking of exiting WHN now, and holding chunky position in shale...

If there was a time to buy LME in the last year...
it is now...

:cool:
.^sc

[NZSilver]

Shrewd, I agree and own a few, speculative buy but LME have some good drills coming up. Only worry is they are a bit short on cash, however someone always seems to cough some up. If they focus on there Taranaki assets they could do very well and as you mention; price jumps up when they begin drilling, however its hard to decide when to sell, do you sell and make small profit or man up and hold untill the drillings finished....

[blockhead]

And now whats up ??

A takeover offer.

LME
23/10/2012 08:30
TAKEOVER

REL: 0830 HRS L&M Energy Limited

TAKEOVER: LME: Notice of intention to make takeover offer

23rd October 2012
Takeover Notice Received

L&M Energy Limited (ASX/NZX: LME) has received from New Dawn Energy Limited a
formal notice of intention to make a full takeover offer for all the ordinary
shares and options of L&M Energy Limited and advises shareholders and option
holders to TAKE NO ACTION.

New Dawn Energy Limited is proposing to offer all cash consideration of
AUD$0.06 per share. The proposed consideration to be offered for each type of
option varies depending on the date and terms of issue of that option, as
outlined in the appendix.

As detailed in the Takeover Notice, the proposed offer is expressed to be
subject to a number of conditions, including acceptances that would result in
New Dawn Energy holding or controlling 90% or more of the shares of L&M
Energy Limited.

Archibald Geoffrey Loudon and Gregory Ross Hogan are directors of both New
Dawn Energy Limited and L&M Energy Limited. As such, Mr Loudon and Mr Hogan
will not participate in L&M Energy Limited's consideration of the merits of
the offer.

The Board of L&M Energy Limited will form a sub-committee of independent
directors to review the takeover offer and to discharge L&M Energy Limited's
obligations under the New Zealand Takeovers Code, including preparing a
Target Company Statement to formally respond to New Dawn Energy limited's
takeover offer and commissioning an Independent Adviser to prepare a report
on the merits of the offer.
Shareholders and option holders will be mailed a copy of the Target Company
Statement, including the Independent Adviser's Report, within 14 days after
the date that New Dawn Energy Limited dispatches its offer document to
shareholders and option holders.

The Independent Directors advise shareholders and option holders to TAKE NO
ACTION with respect to the Takeover Notice until they have received the
Target Company Statement and the Independent Adviser's Report.

L&M Energy Limited has appointed Adelaide Equity Partners as corporate
advisor and Kensington Swan and Piper Alderman as legal advisors to assist
the Independent Directors assess the offer.

For further information please contact the L&M Energy Shareholder Information
Line below:
o Within New Zealand: 0061 1800 303 491

[NZSilver]

Offer = 6 cents AUS, a bit cheap in my view!

[blockhead]

Yerrp, I'd rather hang on and see what the next drill turns up than sell @ A.06c

[seagull]

Too Cheap- Opportunistic

[elZorro]

Too Cheap- Opportunistic

Geoff Loudon owns all of New Dawn Energy. This will take LME out as a listed company. Whatever happened to the Kahili-2 (http://www.lmenergy.co.nz/download/Q1%202012%20Activities%20Report.pdf?inline) well, I thought it was to be drilled sometime soon..

http://www.stuff.co.nz/business/industries/7850806/New-Dawn-launches-bid-for-L-M-Energy

[elZorro]

NBR's article on the deal.

http://www.nbr.co.nz/article/l-and-m-energy-chairman-loudon-makes-takeover-bid-oil-and-gas-explorer-bd-131069

Geoff Loudon has stumped up the cash shortfall lately, so it's all a matter of what is in the pipeline for LME. What are the chances for Kahili and other wells?

With Mr Loudon having recently moved from London to NZ, and being a big shareholder in Glass Earth Gold, I'm very interested in seeing what happens here.

[elZorro]

NZResources has another slant on the buyout idea - maybe the idea is to list on the TSX later. I'm not so sure about that, after all L&M Mining, also part of the LM Group, isn't publicly listed. If a company obtains good cashflow, or has a good chance of obtaining this in the near future, there's no need for a listing and all the hassle that goes with it. Other shareholders in LME are Campania Holdings and Tangent International, I think these could also be Loudon vehicles.


Toronto market a likely factor in L&M Energy takeover bidRoss Louthean — 24 October 2012
The current sharemarket malaise for junior companies in Australasia and the potential to dual list on the less risk averse Toronto Stock Exchange could be factors behind an internal takeover bid for L&M Energy Ltd (ASX & NZX: LME).
In a series of reports to the Australian and New Zealand bourses yesterday it was revealed that a company New Dawn Energy Ltd would make a takeover bid for L&M Energy at $A0.06 a share cash – a premium of 43% on the closing price on the ASX on October 17.
The consideration for LME options will vary from a range of zero to $A0.0599 in cash, dependent on the date and terms of each option.
Behind the move is principal shareholder and chairman of L&M Energy Geoff Loudon who had been a key driver behind listing LME several years ago, originally as L&M Petroleum but changing its name two years ago to L&M Energy to better reflect the broader quest for both conventional and unconventional energy in New Zealand.
In a letter sent to shareholders, Loudon said that in mid 2012 he injected $A5 M into L&M Energy by way of a facility and that subsequently became a convertible note.
“The convertible note was necessary because L&M Energy was projected to have expended all its available funds by mid 2012,” he said.
“I was prepared to support L&M Energy at that time as there were no alternative sources of capital available to it.”
Loudon said these funds should be enough to operate through to the first quarter of 2012, but further capital was then required.
While it was possible for additional capital to come through a rights issue, the current market conditions, it was likely a rights issue would be heavily discounted and be highly dilutive to those shareholders who elected not to participate.
Some large shareholders had indicated to Loudon that they would not be prepared to participate in a rights issue and would likely exit their investment – a difficult issue because the market was showing LME shares were currently highly illiquid.
Geoff Loudon said he saw forming New Dawn Energy as an option to make a full cash offer for shares. This offer, he said, was supported by other LME shareholders and, including his personal stake in listed shares (27.935%), a total of 71.72% of shareholders have committed to accept the offer unless a higher offer is received from elsewhere.
The offer is conditional on New Dawn receiving a minimum of 90% acceptance “and certain offer conditions.”
Both Loudon and fellow L&M Energy executive Greg Hogan are directors of New Dawn and have ruled themselves out of voting on the issue.
While there is no stated agenda there is possibly a move by Loudon and his associates to get New Dawn listed on the Toronto Stock Exchange on which two companies operating in NZ – New Zealand Energy Corporation (NZEC) and TAG Oil – are listed.
Both NZEC and TAG has been able to raise several million dollars recently and had significant share price rises from their successful exploration and production in the onshore Taranaki Basin and East Coast Basin.
NZEC is L&M Energy’s partner in the Alton permit in the south Taranaki where there is a significant target. Cashed-up NZEC made overtures to take over Alton but, as NZResources.com in late May reported, Geoff Loudon made it clear L&M Energy intended maintaining a 35% equity and not watering down any further.
LME’s share price has drifted in recent months due in part to inconclusive coal seam gas exploration on the Kaitangata and Ohio blocks in Southland.
The Otago Daily Times previously reported that L&M Energy, in its various forms and subsidiary companies, has spent nearly $40 million in recent years exploring a variety of southern energy resources in the lower South Island.
In March, company said it would persevere with its Southland efforts, despite its $3.4 M exploration programme not having identified new commercial gas deposits.
Craigs Investment Partners broker Peter McIntyre said L&M Energy had promise but was continuing to struggle for cash.
Like other exploration companies, the company used cash quickly. Time was running out for the smaller exploration companies as larger, cash-rich companies looked for expansion opportunities, he said.
“Smaller companies are finding it hard to raise capital, especially in mining. We could soon be looking at the smaller companies being bought out by the larger ones. It comes down to the economies of scale,” McIntyre added.
--additional reporting by Dene Mackenzie.

[Sharp737]

Thanks for that elZorro, much appreciated.
The offer looks real opportunistic and seems to play us for the fools
Just my initial thoughts - a real rip off

Sharp

[tim23]

I got impatient on Tuesday and sold, good luck to those hanging in!

[NZSilver]

77% now in new dawns control? Has anyone else not recieved the offer document/independent report, because I havn't, It would be nice to read the report. Can you accept/refuse offer online? Will be interesting to see if they get the 90%, im in no rush to sell.

[delboy]

Hi nzsilver I have mine, but like you am not in any hurry to sell. What is the worst that can happen? Know very little about takeovers and the effect on shares still held?? Any advice from those in the know would be much appreciated!

[bucko]

they need 13% more and you will be forced to sell....

[seagull]

Certainly don't accept the offer until we get the independent report which will be followed

up with the independent Directors recommendations. Cheers

[sharer]

Certainly don't accept the offer until we get the independent report which will be followed
up with the independent Directors recommendations. Cheers

Yes. Like other recent posters, i wish to hold on to my little pittance & see how prospects develop. We don't want to be forced out by yet another insider rort "offering" the tiniest possible price. It is very likely there could soon be a compulsory acquisition notice. Probably not too long after that it might emerge that some significant find is then filling the oil barrels. This is what happens every time i try to invest in early stage or technical ventures in NZ. Over about 40 years of trying, i'd have to admit not a single one of these venturesome investments has ever been worthwhile, and several times the entire contribution has been lost, the very few gainfully sailing adventures without exception were all taken out by insiders bids similar to the current LME thing, so the final fruits were all (or at least the biggest part) taken by the insiders themselves with no respect for all the small shareholders who provided the early cash support to get the thing going. In such moments it seems likely no amount of cynicism poured onto the directors & NZX officials can ever be more than they deserve.
The entire speech about a main function of the stock exchange being to help raise starting up capital, turns out to be a dray load of horse feathers.

[elZorro]

Hi Sharer, here is the latest timeline for the Kahili-2 drill. About March 2013.


Anson to leave L&M Energy21 December 2012
Takeover target L&M Energy Ltd (ASX & NZX: LME) is to lose its chief executive.
The company said this week that Kent Anson had decided to return to Australia for personal and family reasons but would remain with the company until the current offer by New Dawn Energy Ltd for the company was concluded.
Anson joined L&M Group in 2008 to lead the coal seam gas (CSG) exploration activity and was appointed chief executive in 2010 after the company acquired associated private company L&M Coal Seam Gas Ltd.
Bruce McGregor has been appointed CEO-designate. He is currently chief financial officer and company secretary.
McGregor joined the company early in 2007 following roles at Fletcher Energy, Shell Petroleum Mining and other industry groups.
L&M Energy also provided an update on operations.
On the company’s 25% owned PEP 53247 (Kahili) in the onshore Taranaki, preparations for drilling of Kahili-2 well were continuing. During the preparations it was discovered that the Kahili-1 well, which had been drilled by previous permit holders, was leaking a small amount of gas to the surface.
For safety reasons, the joint venture agreed that drilling would not be undertaken on site until the leak was stopped.
Identifying the source of the gas leak, developing appropriate remedial action and liaising with the regulatory authorities has taken a considerable time to finalise.
The programme to deal with the leak will consist of initially injecting a brine solution to halt the leak. The zone will then be cemented to provide a permanent solution.
Remediation work was scheduled to commence in mid-January 2013 when equipment and personnel become available, with Kahili-2 anticipated to start drilling late February-early March.
The Kahili permit involves L&M Energy Limited (25%), and 75% partner Mosaic Oil NZ Ltd, which is a subsidiary of the Australian company AGL Energy Ltd.
The Kahili Field was discovered in 2002 and the previous permit holders achieved a brief period of commercial gas and condensate flows.
In anticipation of production, a processing facility and pipeline connecting to the gas network was constructed by NGC (now Vector Ltd) and was currently under a care and maintenance programme.
In 2011 the partners acquired over 30 kilometres of new high quality 2D seismic, reprocessed over 200 km of existing 2D seismic data, undertook a comprehensive geological and reservoir modelling study and mapped an encouraging drilling target - Kahili-2
L&M Energy’s other onshore Taranaki interest is the 35% owned PEP 51151 (Alton) near the productive Waihapa, Cheal and Copper Moki oil discoveries, covering an area of 482.4 sq km.
As previously announced the joint venture has completed the field acquisition phase of the 50 sq km regional 3D seismic programme. Interpretation of the data was underway and expected to be completed in the first quarter of 2013.
The 3D seismic was acquired within the northern part of the Alton permit targeting Mt Messenger, Urenui and Moki plays.
Following completion of the interpretation it was hoped that high grade potential drilling locations would be selected to form the foundation of a 2013 drilling programme focussing on the Mt Messenger, Urenui and Moki plays.
“The strategy of using 3D seismic to identify wells that have a well-defined, lower-risk shallow oil target coupled with deeper exploration targets has proven highly successful in adjacent exploration permits including the nearby Cheal, Sidewinder and Copper Moki fields,” L&M Energy said.
Partner in this project is Canadian company New Zealand Energy Corporation.

[sharer]

Hi Sharer, here is the latest timeline for the Kahili-2 drill. About March 2013.

Thanks for interesting update elZorro.
The bull dust shoveling season is pretty much on track as predicted.
Currently just a few more % LME to be pocketed, and they can boot out the current minority owners.
Reports of favourable events in 25% owned PEP 53247 (Kahili) may emerge (or not, now they're 'private') by about mid-year.
By then we will instead be mesmerized by further appeals for us to invest in water exploiting assets we already "own", in some sense.

[sharer]

Currently 88.23% gone.

Should we capitulate to score the 0.2c extra (before brokerage) still on offer?

[elZorro]

Currently 88.23% gone.

Should we capitulate to score the 0.2c extra (before brokerage) still on offer?

Looks like some are holding back, next decent pile of shares is NZ 7.8c. I still have a small holding.

[Sharp737]

This is the sort of company I will never invest in again. Investors beware of this in the future

S

[sharer]

This is the sort of company I will never invest in again. Investors beware of this in the future

S

"

(a) total number held in class: 673,916,216


(b) total in class: 754,405,518


(c) total percentage held in class: 89.331%


"
News of the morning does rather support Sharp737's opinion of LME.

Perhaps we need a new "IRA" thread, to warn us of Insider Rort Alerts.

[elZorro]

Here's more on Kahili, New dawn will end up with 100% of the permit, not 25%. It could be a punt, or it could be a very safe bet.

http://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3264363

Mosaic Oil doesn't appear to have much other interest in NZ. It's a subsidiary of AGL Energy in Australia, and even the subsidiary earned A$35mill last year, with other gas plays.

The timing of the news release is curious, just after trading. No mention on the LME website (it's there now). I can't find any previous mention that this sort of a deal was being considered. The refund of capital from Mosaic is backdated to October 1st 2012. The LME buyout deal was dated later in October.

Proactive investors provides some more detail. (http://www.proactiveinvestors.com.au/companies/news/38225/lm-energy-moves-to-secure-control-of-new-zealand-gas-condensate-field-38225.html)The first well dried up unexpectedly, produced for 2-3 months.

AGL sold another NZ gas interest in 2012. (http://oilandgas.co.nz/News/NZOG-bulks-up-Taranaki-portfolio/)

[sharer]

from "News" 14-1-2013:
"...









The independent directors also note that the Company has been advised that as



of 11th January 2013 New Dawn Energy had received acceptances for 89.7526% of


the ordinary shares of LME. New Dawn Energy's offer is, amongst other


matters, conditional on receiving acceptances in respect of ordinary shares


that would, once transferred, result in New Dawn Energy holding or


controlling 90% or more of the voting rights in LME, although New Dawn Energy


may waive this condition.





The Company has also been advised that the closing date of the New Dawn


Energy offer has been extended to 31st January 2013.





As set out in the Target Company Statement sent to security holders on 5th


December 2012, the independent directors of LME have unanimously recommended


that security holders ACCEPT the offer from New Dawn Energy in the absence of


a superior proposal. The independent directors continue to hold this


position.





The independent directors will keep security holders informed of any material


new information or changes in circumstances relevant to the offer that arise


before the offer closes."

... followed a bit later by a notice about "pre-emption" at Kahili ..

We can expect our "(verb of your choice) off" notices any time real soon.
Yet another financially rewarding Insider Rort on the NZX for the history books.
Yet another transfer of NZ's natural resources ultimately to benefit foreigners.
Roll on the Sjohnky Asset Sales, gentlemen, hold on to your wallets!

[elZorro]

Guess we'll have to wait and see, you were right about the notices, Sharer.

In earlier press releases there was comparison of the Kahili permit potential with another nearby one that had 47BCF of gas. I enjoy a challenge: 47 x 10p9 CF gas or 47 x 10p12 BTUs is a retail value of about $400mill, and trade maybe $200 mill or less. Only $1.5mill of any oil/gas turnover has to be handed over to Mosaic in the deal, plus about another $A650,000 up front. So if anything like that potential is found, it will be a good cash cow, the rest of the profits being due over time to New Dawn Energy. Of course Kahili is relatively unique in NZ as far as a gas play is concerned. There is an offtake station connected to the main gas pipeline, sitting right there mothballed. A gas find could be routed to the pipeline within 12 months for a relatively small cost. And there is also the potential for some oil condensate, which would be sold by the barrel from the same site.

The current structure for New Dawn Energy is one share, held privately by Geoff Loudon. An unusual structure for what could be a major company in future, considering LME has a few other gas and coal permits to work on.

Good detail in this article out today.

http://www.stuff.co.nz/business/industries/8187325/L-M-buys-out-drilling-permit


Large Australian energy company AGL bought Mosaic in 2010 and has been selling off its New Zealand assets.
L & M chief financial officer Bruce McGregor said Mosaic had found a buyer for its stake, but had to offer it to L & M first under the joint venture agreement. The company was confident in the Kahili site, given the success of nearby wells, he said. "The best place to find oil and gas is where it's been found before." He believed the 18 months of research carried out on the site gave the company a better understanding of the geography and meant a greater chance of striking a decent-sized gas deposit in the permit which has burned prospectors in the past.

"There's a drill-ready prospect and we'll be drilling that in the near future, we just have to deal with the old well," McGregor said.

By that time, L & M will be privately owned by its chairman, Geoff Loudon, through his newly-formed New Dawn Energy. New Dawn launched an A6 cent takeover in November and as of yesterday 90.25 per cent of the shares had accepted, putting it over the compulsory acquisition threshold.

McGregor said the coincidence of the Kahili buy out, the company takeover and the delayed Kahili-2 drilling programme was "not by design".


The 100% Kahili buyout was only announced the very evening before the compulsory buyout of the LME shares. That deal with Mosaic has no timeline on it, but these things surely take some time to negotiate. When was it settled as a deal, that is the question.

I think it's unlikely that New Dawn Energy (in its current form) will trade as a NZ private company with any large income streams coming in.

[sharer]

news today ...
"
L & M Energy has agreed to buy out its 75 per cent joint venture partner in the "drill-ready" Kahili permit as the takeover of the NZX-listed company by its chairman goes unconditional.
The petroleum gas drilling venture in the Taranaki Basin was majority owned by Mosaic Oil NZ with L & M holding the remaining 25 per cent since the pair won the permit in 2011.
L & M will pay Mosaic A$250,000 (NZ$314,712) to take full ownership of the venture. It will also grant Mosaic a 15 per cent royalty of net sales to an aggregate of A$1.5 million and return about $400,000 which Mosaic had paid into the venture since October.
Large Australian energy company AGL bought Mosaic in 2010 and has been selling off its New Zealand assets.
L & M chief financial officer Bruce McGregor said Mosaic had found a buyer for its stake, but had to offer it to L & M first under the joint venture agreement.
The company was confident in the Kahili site, given the success of nearby wells, he said. "The best place to find oil and gas is where it's been found before."
He believed the 18 months of research carried out on the site gave the company a better understanding of the geography and meant a greater chance of striking a decent-sized gas deposit in the permit which has burned prospectors in the past.
"There's a drill-ready prospect and we'll be drilling that in the near future, we just have to deal with the old well," McGregor said.
By that time, L & M will be privately owned by its chairman, Geoff Loudon, through his newly-formed New Dawn Energy.
New Dawn launched an A6 cent takeover in November and as of yesterday 90.25 per cent of the shares had accepted, putting it over the compulsory acquisition threshold.
McGregor said the coincidence of the Kahili buy out, the company takeover and the delayed Kahili-2 drilling programme was "not by design".

The Kahili-2 well was supposed to be drilled by the end of last year, but it was held up by a small gas leak bubbling from an earlier well which was sunk in the first half of the 2000s by a previous venture led by now-defunct Austral Pacific. In 2004, that well ran dry less than three months after the opening of a specially-built $9-million gas processing plant.
The plant, owned by Vector, was mothballed.
Austral never got around to drilling another well.
If the L & M discovered a commercial deposit at Kahili, negotiations with Vector to reopen the plant would be a first port of call, McGregor said. "

and my horsefeathers of the day award goes to ... (sound of oil gushing & drums rolling) ..

""McGregor said the coincidence of the Kahili buy out, the company takeover and the delayed Kahili-2 drilling programme was "not by design".""


(http://www.stuff.co.nz/about-stuff/advertising-feedback/?pos=STORYBODY&adsize=300x250&area=s.stuff)

[sharer]

" .. but these things surely take some time to negotiate. When was it settled as a deal, that is the question. "

You're quite right there El Zorro.

But lets not hold our breaths until NZX looks into it ...

[blockhead]

Good on you Mr Loudon, got rid of us all...now for an oil discovery or two !

You must be pleased we supported you while you got the ducks all in a line eh ??

[elZorro]

From the NZResources website today: a bit of insight from the reporter.


New Dawn reaches LME takeover targetSimon Hartley — 18 January 2013
Compulsory acquisition of oil and methane gas explorer L&M Energy Ltd (ASX & NZX: LME) has been triggered, with takeover instigator LME chairman Geoff Loudon on Wednesday attaining 90% shareholder acceptances -- a condition of his almost $13 million offer.
Loudon's private company New Dawn Energy is paying a 43% premium to shareholders at A6c (NZ7.6c) per share, and now compulsorily acquires the outstanding 10% of shares and will de-list LME from the New Zealand and Australian stock exchanges.
While the initial 30-day offer was recently extended to January 31, Loudon at that point had control of 89.3% of shares on issue and this week clinched the 90%.
The takeover price values LME at $56.7 M.

While LME has undertaken extensive exploration of coal bed methane gas in South Otago and Southland, without announcing any commercially viable deposits, it is now also considering an onshore drilling programme in Taranaki.

New Dawn was incorporated with the Companies Office in September last year. Its directors are Geoff Loudon and L&M Group executive Greg Hogan, with Loudon as 100% shareholder.

This week NZResources.com reported that LME had struck a deal to take out its 75% partner in the Kahili block in the Taranaki – a fair indication that of a sharpening focus on conventional oil and gas exploration.

This website has speculated that while Geoff Loudon and his supporters may have big pockets New Dawn may well, in the future, use as a springboard the capital market in Toronto, which has proven a successful capital raising ground for TAG Oil and New Zealand Energy Corporation – two active explorers and project developers in the Taranaki.

*Simon Hartley is senior business reporter for the Otago Daily Times.
-additional reporting by Ross Louthean


Yes, that sounds more like it, but in between there will be a big capital gain for somebody.

[NZSilver]

Agree with you blockhead, I had been a holder for several years and this was one of my first shares purchased, even though speculative it was nice to have shares in an oil/gas/CSG ect exploration company based in New Zealand and with drilling permits in taranaki (where I grew up and live). There is a real lack of oil/gas explorers publically listed in NZ (NZOG, CUE and PPP are the only other ones I can think of) There are many companies drilling in taranaki TAG, NZEC, and private comapnies todd, greymouth so it can be hard to get a slice of the action (im not 100% sure how you invest on the toronto stock exchange but im sure you can somehow, however tax & exchange rate would become an issue). Now we have seen another chance for investing in a local gone, I would say LME in what ever shape or form will eventually go on the TSX so Mr Lounden can make some money. I also think LME should have really focused on its Taranki assets rather then down south because it sounds like at this stage they possibly were a bit of a flop costing a fair bit of coin (good on them for trying but Taranaki has proven gas/oil and good infrastructure so why not stick to what you know and what has a history of proven sucess, make some coin then start trying things that are a bit different)

I do believe if a company is taking oil and gas from our country, there should be an easier way for NZers to invest in the company (dual listing or some other measure). The goverment wants kiwis to invest and they also want to have a bigger equity market, however they let international companies suck us dry and pump of our assets with the majority of the profits going into foreigners pockets and overseas economies. Yes there is job creation, royalties ect but realistically its a very small chunk, if profits came back to kiwis this money would be spent/re-invested in NZ (im sure quite a few TAG/NZEC investors would point to somewhere in australia if you asked them where Taranaki/New Zealand is located)

Anyway, it was up and downs for a good few years, interesting ride, Mr Loudon did kick us when we were down, but thanks to LME and the management for trying their best.

[BWH]

Excuse me for being a bit naive in this scenario. NDE has offered A6c for the shares, which we have until the 31st of January to accept. They have now acquired more than 90% of the company, meaning they can compulsorily acquire the remainder. If we do nothing, do they automatically buy us out at that price or a price determined by them after the 31st, which I can only assume will be lower? I accidentally threw out the literature that was posted to me before I read it...

[Lion]

6c for everyone now, I think

[bucko]

so has anyone received their payout yet? I sure haven't! 7 days from the date it went unconditional......:sleep:

[elZorro]

so has anyone received their payout yet? I sure haven't! 7 days from the date it went unconditional......:sleep:

I received a letter and form today, signed it and posted it back to receive an Aussie$ cheque in the mail within 7 days. Then I'll carefully time the exchange rate with my Aussie bank I guess. Might make a couple more dollars.

In an idle half hour I calculated what sort of a daily gross return Kahili-2 could make, if it was a gusher and held the hoped-for 47x 10P12 BTUs of energy.

The off-take cannot exceed the capacity of the handling facilities, which has a 6inch pipe feed. The station can handle 10 Terajoules of gas a day, and 430 barrels of condensate (oil) a day. 1 BTU is 1054 joules approx. This means that if the permit holds 47 Tera BTU, at maximum oftake through the station with no drop-off, the well would take 13.5 years to get to depletion (looking at gas only). Assuming the station was designed to handle the expected flow from the first well, and running that at maximum, a cashflow can be derived:

Oil: let's say NZ$50 trade a barrel, 430 a day $21,500 a day and $7,847,500 per year
Gas: 10 TJ/day divided by 1054 for BTU, and based on value calculated above, about $40,720 a day and $14,731,400 a year.

The old wellsite should be getting sealed by now, and the new one could be started late in February. It's all academic of course, but still interesting to see what'll happen.

https://www.nzx.com/companies/LME/announcements/231385

[sharer]

...
Oil: let's say NZ$50 trade a barrel, 430 a day $21,500 a day and $7,847,500 per year
Gas: 10 TJ/day divided by 1054 for BTU, and based on value calculated above, about $40,720 a day and $14,731,400 a year.

The old wellsite should be getting sealed by now, and the new one could be started late in February. It's all academic of course, but still interesting to see what'll happen.

https://www.nzx.com/companies/LME/announcements/231385

Hard to resist the feeling that au0.06$ is not a fair price for our compulsorily taken shares, eh?

[pietrade]

I'm with you there but what can you do with such banditry?

[BWH]

Sent the paperwork in yesterday. Unfair, but time to move on.

[delboy]

I guess valuble lesson learned. Will think long and hard before investing in a speculative explorer again....hope my other explorers dont burn me also. May have to use my return to start trying the buying and selling in a time period....cant do much worse, loss have my investment so time to recoup!

[elZorro]

No Kahili-2 drill news so far. I did find some old news about the first owners of the $9mill gas treatment plant, NGC, saying that a second well(s) could possibly push production to up to 1,000 barrels of oil per day, plus gas. It was one of the most embarrassing gas finds in the Taranaki, when the first production well (Kahili-1B) filled with water and the whole thing stopped after 3 months.

Digging a bit deeper, I finally found a reference to an Ensign drilling rig (http://66.38.151.117/rigfinder/rig_details.jsp?id=80005) (919) in March 2013. So who knows, maybe we'll hear something on the grapevine soon. Ensign's 919 rig is meant to be drilling 6-8 spots for NZ Energy Corporation, and they hold most of the Alton permit along with LME. So there is a tie-up here and maybe the rig will be used at Kahili in between NZEC's work. The rigfinder software for the rig owners put the 919 rig as being in the Marlborough Sounds?, with a smaller Ensign cleanup rig being used onshore Taranaki, down from Inglewood. An even bigger rig is in use by Todd Corp, also onshore Taranaki.

[elZorro]

An Insider chart shows that Ensign onshore Rig 919 is free from mid April through May (NZEC has freed it up). The Rigfinder map implies it's still at the top of the South Island though. Considering it's one of the few rigs spare in the chart, there's a chance it is on the way to Kahili.

[NZSilver]

Cheers, interesting to know how it goes.

[elZorro]

Cheers, interesting to know how it goes.

An article in the subscribed NZ Energy & Environment out today, says that Kahili-2 well was a disappointment, no hydrocarbons were found, and it was plugged and abandoned. The cost was over $5mill for that programme. It states that Geoff Loudon is bound to be undaunted, there are other prospects yet to be drilled. There is capital from a coal mining area sold for a substantial sum, and the Earnscleugh placer gold site will be returning solid cashflow I'd expect.

Anyway, looks like investors didn't miss out on too much in the interim, that's exploration. I think this outcome should return a bit of goodwill back towards Mr Loudon - at least he's out there investing in the local resources area.

[Billy Boy]

A at least he's out there investing in the local resources area.
shush there !!! or the Greens will hear you !!!
​BB

[elZorro]

http://www.sharechat.co.nz/article/5ed468d1/geoff-loudon-swoops-on-nz-energy-corp-in-gas-deal.html

Geoff Loudon's New Dawn has done a deal for half of some gas permits and a production station.

[NZSilver]

Well elZorro, it sound slike things havnt been as good as suspected. Both NZEC and LME havnt had such a great track record. cf the likes of Tag oil. I have bought some OXX to get exposure to taranaki oil and gas exploration.

[elZorro]

Well elZorro, it sound slike things havnt been as good as suspected. Both NZEC and LME havnt had such a great track record. cf the likes of Tag oil. I have bought some OXX to get exposure to taranaki oil and gas exploration.

Sounds sensible. I just saw this article on NZResources.


L&M Energy looks to early productionRoss Louthean — 7 August 2013
The now unlisted L&M Energy Ltd, part of the Christchurch-based L&M Group, will be looking to move quickly into early oil production cash flow from its deal with Canadian company New Zealand Energy Corporation (NZEC) over the oil and gas fields and production stations in the onshore Taranaki.
L&M Energy’s principal, Geoff Loudon, struck a deal with NZEC to help complete purchase of the production field, leases and production station from Origin Energy Ltd (ASX: ORG).
According to a report last week NZEC still had to provide the balance of funds due as payment to Origin.

In Kalgoorlie yesterday, he told NZResources.com that the plan would be to pump some gas into the fields to help recover some of the oil still in these fields.

L&M Energy was delisted in the tough times earlier this year when the market had marked down the company on both the Australian and NZ bourses, primarily due to some disappointing coal seam gas exploration on the South Island.
This made it difficult to raise capital without diluting the value of shares held by shareholders in the listed company, so Loudon and his associates bought out the existing shareholders under a company called New Dawn, and then delisted on both exchanges.

The L&M Group also owns the Earnscleugh gold dredge project in near Alexandra which suffered a production halt several months ago when the dredge sunk in the pond. Loudon told NZResources com that the dredge was again operating. During the repair period the company converted the diesel driven system to electricity and this, he said, was now saving about half the original monthly bill for diesel of $350,000.