Lakes Blue Energy Reports $1.5M Quarterly Spend, $6.5M PEP 169 Sale Completed
Lakes Blue Energy reported a $1.5 million quarterly operational spend and completed the $6.5 million sale of its 49% interest in PEP 169, while progressing drilling approvals for the Wombat-5 well in Victoria.
- Completed $6.5 million sale of 49% interest in PEP 169 to Armour Energy
- Quarterly operating expenditure of $1.5 million including $0.3 million on exploration
- Closing cash balance boosted to $5 million after sale proceeds received
- Wombat-5 well drilling approval targeted for March 2025 with rig negotiations underway
- Trading suspension remains pending ASX approval following asset sale completion
Financial and Corporate Update
Lakes Blue Energy NL has reported its quarterly activities for the period ending 31 December 2024, highlighting a disciplined operational spend of $1.5 million, including $0.3 million dedicated to exploration and evaluation. The company’s cash position strengthened significantly following the completion of the sale of its 49% interest in Petroleum Exploration Permit 169 (PEP 169) to Armour Energy (Victoria) Pty Ltd, a subsidiary of ADZ Energy Pty Ltd. The transaction, finalized on 10 January 2025, delivered $6.5 million in cash proceeds, boosting Lakes’ closing cash balance to $5 million.
Director payments during the quarter amounted to $130,000, reflecting ongoing governance and management costs. Despite these positive financial developments, trading of Lakes Blue Energy shares remains suspended on the ASX, pending approval for resumption following the asset sale. The company has engaged with the ASX and supplied requested additional information, awaiting a response that will determine the timing of trading recommencement.
Progress on Exploration and Development Projects
On the exploration front, Lakes Blue Energy is advancing regulatory approvals for the drilling of the Wombat-5 well in the Gippsland Basin, Victoria. The company submitted an Operation Plan to the Department of Energy, Environment and Climate Action (DEECA), which responded with requests for further information by the end of December 2024. Lakes aims to address these by the end of January 2025, targeting regulatory approval by March 2025.
The Wombat-5 well is a conventional directional well targeting the gas-rich Strzelecki Formation, with an independently estimated production potential of approximately 10 terajoules per day. This well is a key component of Lakes’ strategy to develop the Wombat and Trifon-Gangell gas fields, which collectively hold certified contingent recoverable gas resources estimated at 390 petajoules. The company envisions bringing the Wombat field online relatively quickly and cost-effectively, leveraging existing infrastructure and proven gas quality.
Negotiations are underway with Savannah Energy Services, a Schlumberger subsidiary, to secure a drilling rig for June or July 2025. However, rig availability remains uncertain due to prior commitments in Queensland, underscoring the logistical challenges in advancing drilling schedules.
Rehabilitation and Environmental Commitments
Lakes Blue Energy is also progressing rehabilitation efforts, selecting the Lou Yang-2 well within PEP 166 as a demonstration project to better understand and manage rehabilitation costs. The company submitted a draft Operation Plan for this work in April 2024 and is currently revising it in response to DEECA’s feedback. This initiative reflects Lakes’ commitment to environmental stewardship and regulatory compliance in its exploration activities.
Broader Portfolio and Strategic Outlook
Beyond Victoria, Lakes maintains a diverse portfolio including interests in Papua New Guinea, South Australia, and Queensland. Notably, the company is exploring options to progress the multi-trillion cubic feet Buna prospect in Papua New Guinea after TotalEnergies withdrew from a technical cooperation agreement due to budget constraints. In South Australia, the Nangwarry Carbon Dioxide Project continues to be evaluated for industrial CO2 production, with certified contingent resources estimated up to 64.4 billion standard cubic feet.
In Queensland, the ATP 1183 permit on the Roma Shelf holds promising oil and gas prospects, with multiple targets identified and significant resource potential. Meanwhile, Lakes has relinquished the less prospective PEP 163 in Victoria to focus resources on higher-potential assets.
Overall, the company’s recent asset sale has provided a much-needed capital injection, enabling it to advance key projects and maintain operational momentum. However, the ongoing suspension of share trading and the need for regulatory approvals remain critical factors shaping the near-term outlook.
Bottom Line?
With cash bolstered by asset sales and drilling approvals pending, Lakes Blue Energy stands at a pivotal juncture as it seeks to resume trading and unlock its gas production potential.
Questions in the middle?
- When will the ASX approve the resumption of trading for Lakes Blue Energy shares?
- What are the prospects and timelines for securing the drilling rig needed for Wombat-5?
- How will Lakes Blue Energy attract new partners for advancing the Buna prospect in Papua New Guinea?
