It said it had placed a total of 17,500,000 ordinary fully paid shares at four cents each to raise a total of $700,000.

Wombat-3 reached a total depth of 2,178 metres on 28 October last year. It was completed using a ”mono” or slim-line bore casing, which allows greater flexibility in testing multi level gas fields. A zone of interest that produced both an oil and a gas show during drilling was identified between 2,097 and 2,112 metres.

After perforating the casing at 2,104 to 2,107 metres, “swabbing” or ‘bailing” recovered a light green gravity oil of 39.58 API. Lakes said this confirmed the presence of high quality extractable oil in the onshore Gippsland Basin.

It said it was looking into an induced fracturing to stimulate oil to come from this level.