Ann: Lakes Oil to Appeal Judgement, page-27

Lakes have never come up dry in fact just the opposite. Rob Annells when he was chairman made some decisions that would come back to bite the company. Wombat was on the verge of production but this did not happen as it was decided to sink further exploratory wells in order to prove that the wombat field was larger than first thought. Unfortunately for the company the coal seam gas fracking moratorium was introduced by the previous govt and lakes got caught up in this even though the govt promised lakes would be exempt as it was exploring for tight gas. At the time it was introduced Rob was in the USA examining drilling equipment. Result no chance to prove that Wombat is an enormous field and if the decision to drill more exploratory wells was not made Lakes would be in production today. Secondly Beach Petroleum in a joint venture with Lakes was going to provide $50m towards drilling costs on a second field around Yallourn but pulled out when the moratorium hit. Thirdly Lakes had a drilling rig at the site gate in the Otways when the moratorium was extended. Woodside has been mentioned but Woodside first started drilling at Longford exploring for oil. It was never their intention to produce gas which actually became a by product of its offshore oil exploration. However an ironic by product of Lakes exploratory wells is that oil has been encountered in every one of the wells Lakes has drilled looking for gas and indications are there that commercial quantities of oil exist at much greater depths than have previously been explored. The Company in hindsight has made some bad decisions but in its defense it could not possibly have seen what influence the Greens and lock the Gate would have on Spring St. Lakes shareholders have been extremely unlucky but under our new CEO the situation is being turned around. To say Lakes has come up dry is just mischief making . Lakes will survive funds for drilling will be obtained and if you are prepared to hold your nerve the end result will be well worth waiting for.