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The bore at the Minerva, in the Waipaoa Valley, was unsuccessful, from what cause cannot now be made clear—it is said from a difficulty connected with the sinking of the borehole only ; and no attempt whatever has been made to obtain oil at or near the springs on Dobbie's Run. From the examinations which have been detailed in the earlier part of this report the conclusion is that the oil mainly has its source in the Cretaceous rocks—presumably in the middle and lower divisions of that group ; but, also, it may not be denied that the upper calcareous division may also give 'rise to mineral oil. But of these rocks it is not so much a question whether the oil has had source in them as their capacity for retaining it stored in the more permeable beds — e.g., the greensandstones interstratified and underlying the chalky limestone, and the sandstones of the middle and lower divisions. The frequently shattered condition of the chalky limestones gives facilities for the escape of gas, and of oil converted to gas, and this, perhaps erroneously, leads to the impression that by such means stores of oil in the lower rocks may be lessened or depleted. Of oil in the Lower Tertiary beds, this is only known at Dobbie's, but whether originating in these beds or escaping upwards from underlying Cretaceous strata is uncertain. The Tertiary strata at Dobbie's must be of great thickness and not much disturbed, aud are of such a character as favours the holding and storage of oil; and the coralline limestone at the base of the formation may also be a source of the oil, and it is not therefore necessary to assume that the oil escapes from the Cretaceous formation. The presence of oil in paying quantities not having as yet been proved, the recommendation of sites for future boring is a matter of some delicacy, and the selection of such must therefore be left to those whom it most concerns. When at the springs east of the source of Oil-spring Creek, Mr. Brett seemed to favour, and asked my opinion as" to, a bore-site on the ridge of solid ground that separates the little basin in which the springs are situated from the slope west into Oil-spring Creek, and which at the upper end of the basin curves round to the eastward. This certainly has the advantage of being in solid ground, and near the highest point oil is actually escaping from the undisturbed strata. Here there is little likelihood of failure, owing to continued displacement of sliding masses of rock, aud the bore may be placed near, or half a mile from, where oil actually reaches the surface. On the Minerva section a bore or boreholes may be put down on either side of the unconformable junction between the Tertiary and the Cretaceous rocks, as may be judged expedient. The Cretaceous rocks probably yield oil; they are also capable of storing it in the looser and less fractured strata ; while the Tertiary strata, if they are not the source of the oil, should be capable of storing it. Owing to the considerable dip of the strata to the south-east, the Minerva borehole was placed perhaps a little too far from the south-eastern line of junction between the Tertiary and Cretaceous rocks. In the Mangatu Valley any point may be selected, from Campbell's Station to or for some miles above Cooper's Station, care being taken that the bore at some depth shall reach a greensand stratum. In the Waikohu Valley, west of the Pohutu Crossing and the accommodation-house, where the Tertiary Strata have an anticlinal arrangement, and at moderate depth are underlain by Cretaceous rocks, boring may be undertaken on the crest or north or south side of the anticline, as may be considered the most likely for reaching oil or convenient for bore-site. In this district there is no special locality that might be considered the most favourable. It is true that gassprings appear on the north slope of the range on the north side of the valley, but this is outside the Waikohu Valley, and, with perhaps no better prospects, would be more difficult to reach. More to the west, along the Gisborne-Opotiki Road, sites may be selected where boring would begin in the Cretaceous rocks. At Dobbie's, where oil is escaping from Tertiary rocks, no special site other than what is convenient for taking on to the ground and erection of the boring plant need be indicated. The oil-springs are on a spur 300 ft. to 400 ft. above the valley in which the homestead is situated, and, as the presence of oil at the surface does not insure the success of a bore, it might be to no purpose to incur the cost and inconvenience of taking a boring plant on to the very site of the springs, even though there be no great difficulty in doing so. With respect to a small area of Cretaceous rocks appearing on the shore-line between the mouth of the Turanganui River and the north headland of Poverty Bay, an area of the same rocks at Whangara, and yet another on the coast-line between Gable-end Foreland and Tolago Bay, these scarcely call for particular description in this report. 24th April, 1901. Alex. Mackay.

REPORT ON COAL AT FITZHERBERT. By W. A. McKay, Assistant Geologist. I left Wellington on the sth November to examine the coal lately discovered at Fitzherbert, near Palmerston North, as directed. The reported coal is on the Fitzherbert East Road, at its junction with the Palmerston-Pahiatua Road, about half a mile from the Manawatu River and three miles and a half from Palmerston North. The coal was discovered in sinking a well alongside the " Defiance " Butter Creamery, at a depth of about 25 ft., and was said to be 7 ft. thick. At the time of my visit the well was finished and the water allowed to rise to within 14 ft. of the surface, and the coal was under water. Some of it was lying about on the surface in small pieces, and in all respects it corresponded with an outcrop about half a mile to the south. At the well hard coal was reported to have been cut. 4—C. 10.