5 Sep 2008

NZ oil company moves into US exploration

10:59 am on 5 September 2008

Oil and gas explorer L&M Petroleum Ltd has made its first foray into an oil drilling programme in the United States.

The company has agreed to 'farm-in' to a California oil prospect drilling programme with the company Salinas Energy.

That means L&M Petroleum will pay Salinas Energy a percentage of the drilling costs in exchange for a 20% working interest in the well.

The company says the agreement will allow it to balance its high-risk and high-reward exploration in New Zealand with opportunities targeting oil and gas in one of the most bountiful basins in the world.

L&M says the 'farm-in' agreement is subject to Salinas Energy securing another partner.