It said it had appointed former Halliburton staffer Jim Macadam as project manager to guide the company through the commercial assessment stage. It said his wealth of experience in fracture engineering would enable him to take control of the day-to-day operations of the projects.

Lakes also had contracted Halliburton-subsidiary Landmark Consulting to conduct a feasibility study of the Wombat and Trifon fields and to assess the potential for commercialisation.

It has also contracted Halliburton Australia to undertake a fracture program in both Wombat-3 and Trifon-2 which is expected to begin in mid May.

Lakes also said it had reached an agreement with Perth-based Westcoast Mining Limited for its whoilly-owned subsidiary, Jupiter Oil & Gas, to drill the Bellarine-1 well in the onshore Otway Basin, Victoria, about 20km from Geelong.

Westcoast will earn a 50% interest in PEP 163, earning this stake after it has spent $1.2m to drill the Bellarine-1 well. After this, the permit will be held on a 50/50 basis with Lakes Oil remaining as operator.

Lakes Oil will also grant Westcoast a six month option to earn a 33.33% percent interest in the adjoining permit (PEP 164) on a similar expenditure basis.

A suitable drilling rig has been located and drilling is expected to start in about six to eight weeks, according to Lakes.

“This well is a follow-up to the Hindhaugh Creek well drilled in 1969,” the company said.

“That well appears to have been drilled off-structure, however it achieved an unmeasured flow of gas to surface. The opportunity to drill the Bellarine well in PEP 163 will be an important move forward in our long term plans to approach the Otway Basin, in the same manner in which we are developing the Gippsland Basin.”