Lakes Blue Energy has obtained Victorian government approval to drill the Wombat-5 appraisal well, a key step toward unlocking significant gas resources amid looming East Coast supply shortages.
- Victorian Minister grants conditional consent to drill Wombat-5
- Drilling planned to start mid-July 2025 with Condor Energy Services rig
- Wombat field holds independently certified 329 PJs of gas resources
- Previous wells showed promising flow rates up to 3 million cubic feet per day
- Well budgeted at $7.5 million, critical for advancing field development
Government Approval Clears Path for Wombat-5 Drilling
Lakes Blue Energy NL (ASX, LKO) has received formal consent from Victoria's Minister for Energy and Resources, Hon Lily D’Ambrosio MP, to proceed with drilling the Wombat-5 appraisal well within Petroleum Retention Lease 2. This approval, granted under the Petroleum Act 1988, is contingent upon the company agreeing to and paying rehabilitation bonds designed to ensure environmental safeguards during and after drilling operations.
The initial stage rehabilitation bond has been settled, with Lakes aiming to finalize the second stage bond by the end of June 2025. These regulatory steps clear the way for Lakes to mobilize drilling equipment and commence operations in mid-July, marking a significant milestone in the company’s exploration program.
Drilling Plans and Technical Outlook
Lakes has contracted Condor Energy Services Limited to supply Rig #1 for the drilling of a 1.5-kilometer lateral well, with mobilization scheduled for the week of 14 July and spudding expected around 21 July 2025. The well is budgeted at $7.5 million and is anticipated to take approximately 25 days to drill, followed by a two-week testing phase.
Previous drilling in the Wombat field, including wells Wombat 1 through 4, demonstrated encouraging flow rates ranging from 100,000 to 3 million cubic feet per day over vertical sections of the reservoir. Independent assessments suggest that the new lateral well could achieve target flow rates of up to 10 million cubic feet per day, a substantial increase that would significantly enhance the field’s commercial viability.
Resource Potential and Market Context
The Wombat field alone contains an independently certified contingent resource of 329 Peta Joules (PJs) of gas, contributing to a combined resource estimate of 719 PJs across the permit area that includes the Trifon and Gangell fields. These volumes position the project as a potentially important contributor to Victoria’s gas supply, especially given forecasts of severe shortages on Australia’s East Coast.
Lakes’ Chairperson, Roland Sleeman, emphasized the strategic importance of this drilling campaign, noting the company’s optimism about the resource potential and the robust market demand for gas in the region. The success of Wombat-5 is expected to underpin a full field development plan, which could transform the permit area into a substantial gas supplier.
Looking Ahead
While the drilling approval and contract arrangements mark a critical step forward, the ultimate impact on Lakes Blue Energy’s production profile and the broader gas market will hinge on the well’s performance. Investors and industry watchers will be closely monitoring the drilling progress and flow test results in the coming months.
Bottom Line?
Wombat-5’s drilling will be a decisive test for Lakes Blue Energy’s growth ambitions and Victoria’s gas supply outlook.
Questions in the middle?
- Will Lakes secure the stage 2 rehabilitation bond and commence drilling as planned?
- Can Wombat-5 achieve the targeted 10 million cubic feet per day flow rate?
- What are the timelines and investment plans for full field development if drilling succeeds?