Opening at 20 cents, the new junior was trading at 17 cents by 2pm AEDT.

Gippsland Offshore Petroleum was formed when Lakes Oil spun off the bulk of its offshore Gippsland interests with junior partner Stellar Resources. Lakes will continue to focus on onshore prospects.

Lakes Oil has retained a 26% stake interest in the first well to be drilled as part of the project.

Gippsland Offshore Petroleum's initial public offer closed fully subscribed last month with 60,000,010 shares sold at 20 cents each with 30 million free attaching options expiring 30 November 2006, exercisable at 20 cents.

Gippsland Petroleum will focusing on developing producing permits in offshore Gippsland Basin.

Initially the company will focus its interest on three areas that have been covered by the Falcon Airborne Gravity System which resulted in several leads being developed, together with seismically defined prospects already identified.

Gravity Capital, who flew the airborne gravity on Lakes' behalf, has earned an interest in all three permits. These interests now reside in Stellar Resources, a spin-off from Gravity Capital.