Can Lakes Blue Energy Deliver on Wombat-5’s Promise Amid Victoria’s Gas Shortage?
Lakes Blue Energy has secured all regulatory approvals to begin drilling the Wombat-5 well in Gippsland, aiming to tap a significant gas resource with potential to ease Victoria’s looming supply crunch.
- Final regulatory approvals received for Wombat-5 drilling
- Rig mobilisation scheduled for mid-July 2025
- Wombat-5 targets 10 Terajoules per day gas production
- Combined 2C contingent resource of 719 PJ across Wombat and Trifon-Gangell fields
- Potential to support Victorian gas market amid forecast shortages from 2026
Regulatory Green Light for Wombat-5
Lakes Blue Energy NL (ASX – LKO) has cleared a critical hurdle by securing all necessary regulatory approvals to commence drilling at its Wombat-5 well, located in the Gippsland region of Victoria. This milestone follows the lodging of a nearly $900,000 rehabilitation bond guarantee with the Victorian Department of Energy, Environment and Climate Action, satisfying environmental and operational conditions imposed by the state government.
Drilling Plans and Technical Outlook
The company has contracted Condor Energy Services’ Rig #1, which is on track to mobilise to the Wombat-5 site by mid-July 2025. Drilling is scheduled to commence on 31 July, with site preparation nearing completion. The well is designed as a conventional lateral borehole extending approximately 1.5 kilometres through the upper Strzelecki Formation, a geological layer previously confirmed to contain high-quality natural gas.
Resource Potential and Market Implications
Wombat-5 is independently assessed to have a gas production potential of up to 10 Terajoules per day. This is significant given Lakes Blue Energy’s combined contingent resource of 719 Petajoules across the Wombat and adjacent Trifon-Gangell fields. If successful, the development could supply around 20 Petajoules annually into the Victorian gas market for two decades, providing a timely boost ahead of forecast supply shortfalls expected from 2026 onwards.
Strategic Significance for Lakes and Victoria
Chairperson Roland Sleeman emphasised the transformative potential of a successful drilling outcome, highlighting the opportunity to unlock value for shareholders while addressing critical energy needs in Victoria. The proximity of the gas fields to existing infrastructure, including pipelines servicing Melbourne, enhances the feasibility of rapid market supply.
Looking Ahead
While drilling success remains to be proven, the company’s progress marks a pivotal step in advancing its Victorian gas assets. Investors and market watchers will be keenly observing the drilling results and subsequent development plans, which could reshape regional gas dynamics and Lakes Blue Energy’s growth trajectory.
Bottom Line?
Wombat-5 drilling is poised to unlock a major Victorian gas resource, but the market awaits proof of production.
Questions in the middle?
- Will Wombat-5 meet its 10 TJ/day production potential upon drilling completion?
- How quickly can Lakes Blue Energy commercialise and scale production if drilling is successful?
- What impact will this development have on Victorian gas prices and supply security from 2026?
