The company originally believed that the detonation charge down hole had not ignited, however a subsequent inspection of the Stim equipment on the surface revealed that the detonation had in fact occurred.

Trading in Lakes shares was halted while the situation was assessed but has now been resumed.

Lakes now intends to run a production casing, which will allow the well to be re-opened and flow until inhibiting debris and drilling filtrate is cleared from the reservoir.

Wombat-1 has recently flowed increased amounts of gas while it was opened and is expected to build on those rates after a sustained testing period.

The six original drill stem tests (DST) resulted in various flows of between: 25,000 cubic feet of gas per day from the Golden Beach sands; 250,000 cubic feet of gas per day from the Strzelecki/Golden Beach Formation; and 100,000 cubic feet of gas per day on a ¼ inch choke from the Golden Beach.

Lakes Oil has now released the rig to begin work on the Wombat-2 well, which is located 2km south west from Wombat-1.