“We believe we have discovered a new gas field in a strategically important area of Victoria. The significance of this find will not be known until we have drilled more wells and carried out extensive testing,” said a Lakes statement this morning.

“Wombat-1 well began a flow back of frac fluids on Saturday afternoon. A gas flare was established after 24 hours flow time. This flow stabilised early Monday morning. The rate was estimated at 1 million cubic feet of gas per day and was accompanied by a water flow.”

Lakes is fraccing the same area which was unsuccessfully fractured previously using the explosive “stim” method and had been left open.

It said it had uncovered two gas zones within a 115m horizon, one of 20 metres and one of 50 metres.

Lakes said it now considered the upper 20 metre interval to be above and outside

the main Strzelecki Formation reservoir established at Wombat-2.

It was planning a third Wombat well, to be located at a midpoint between the first two wells. Wombat-2 has been shut in awaiting the arrival of a separator. Lakes said over the weekend a small amount of condensate was recovered from the well.

Lakes also said the Halliburton fracture equipment is currently being moved and rigged up on Trifon-2 site. It was expected to be perforated later today with fraccing commencing on Wednesday.