"Currently, AusAm are raising a substantial amount of capital and require additional time for their investors to complete due diligence," Lakes Oil said in a statement to the Australian Stock Exchange.

"Accordingly, Lakes Oil has extended the period for AusAm to complete the capital raising process to 31 December 2002."

Under terms of the agreement, AusAm intends to drill two wells, Trifon-2 and Trifon-3, in February next year. Earthworks for the extension of the drilling pad have already begun.