re: Ann: LKO to search for Coal - Finds oil i... Hi Nana,They...

re: Ann: LKO to search for Coal - Finds oil i... Hi Nana,
They cost me 1.2c, so a bit to go yet before making any profit.
A lot hinges on when BPT funds and facilitates drilling fraccing and testing of Wombat gas and oil, and it was supposed to not take longer than 12 months from their agreement, (so far about 7 months ? )

"LAKES OIL N.L.
LKO, BEACH READY TO EXPLOIT ?TIGHT?
GAS ONSHORE GIPPSLAND - Announcement from 10 Aug 2010

Lakes Oil N.L. (LKO) and Beach Energy Limited (Beach) have signed an
unconditional $50 million agreement to further test the gas potential of the
onshore Gippsland Basin, in Eastern Victoria.
The signing follows an earlier conditional arrangement announced on 14th
April where Beach can earn up to a 50 per cent interest in the Petroleum
Retention Lease 2 (PRL2) which contains the Wombat and Trifon tight gas
fields, (see map) near Sale by spending $50 million.
Beach?s financial commitment is based on matching LKO?s expenditure in
PRL2 to date estimated at $50 million.
The contract between the two companies follows due diligence and is
subject to regulatory approval from the Victorian State Government.
The agreement provides Beach with the opportunity to extend the flows of
LKO?s discovered unconventional ?tight? gas reservoirs and to develop
technology proven in the U.S.
The basis of the current agreement is on a two stage entry by Beach;
Stage one
Beach will fund 100 per cent cost of the flow and fracture tests in Wombat 4
and Boundary Creek 2 wells which have been drilled and cased ready for
?fraccing? by Lakes Oil together with the re-entry and evaluation of the oil
zone encountered in Wombat-3.
Beach can earn up to 15 per cent interest in PRL2 by expenditure of $10
million in Stage one. Should the expenditure not reach $10 million the
amount earned by Beach in PRL2 will be reduced pro-rata to the nearest
percentage point.
Stage two
Any monies not spent in Stage one can be carried over into Stage two.
Stage two enables Beach at this point to increase its interest in PRL2 to a
maximum of 50 per cent by the expenditure of up to a further $40 million,
plus the balance of Stage one.
Again, in Stage two, should expenditure not reach $40 million, then the
interest earned will reduce proportionately.
Under the terms of the farmin agreement, Beach will use its best
endeavours to undertake the Stage one program within 12 months from the
agreement execution.
LKO?s Chairman, Mr Rob Annells said that the strength of the farmin with
Beach demonstrated the new wave of thinking about unconventional tight
gas in Australia."

Wish they'd get their finger out :)

RAVI