Explore South Australia

Petroleum Retention Licence 249 (PRL 249)

Through its subsidiary, Otway Energy Pty Ltd, the Company holds 50% of, and operates, PRL 249. The Company’s net interest in the Licence is 46.76%, after
allowing for minor thierd-party interests in Otway Energy Pty Ltd.

PRL 249 contains the Nangwarry Carbon Dioxide Project. Discovered in 2020, the Project has a very high (90% or greater) content of pure carbon dioxide, making it attractive for development to produce carbon dioxide for industrial, medical and food uses.

Extended flow testing of the Nangwarry well, carried out in March 2021, showed that the well was capable of producing raw gas at rates up to 18.6 MMscfd, and provided a basis for the following independent verification of the recoverable sales gas volume of carbon dioxide contained within the Nangwarry reservoir.

Figure 1: Nangwarry Project Location

Table: Independently Certified Carbon Dioxide Sales Gas Volume

The Company, with joint venture partner Vintage Energy Pty Ltd, is investigating options for production of food-grade carbon dioxide from the Nangwarry resource. Conceptually, gas production could commence at around 1.5 MMcfd (to produce 75 T/d of carbon dioxide) and grow to 3.0 MMcfd (150 T/d of carbon dioxide).

Pirie Torrens Oil & Gas Project (Petroleum Exploration Licence Applications)

The Pirie Torrens Oil and Gas Project incorporates six Petroleum Exploration Licence Applications (PELAs) located in South Australia and covering approximately 53,000km2 as outlined in Figure 9. Petroleum exploration activities in the general area first commenced in 1956, when Santos was established to drill for oil at Wilkatana. This work, and subsequent drilling by other companies, historically confirmed
the presence of oil and gas across the area of interest.

The Company has an arrangement in place with Gehyra Flux Pty Ltd (Gehyra) pursuant to which:

  • Lakes will transfer to Gehyra a fifty percent (50%0 interest in six Petroleum Exploration Licence Applications (PELAs) to be granted
    as Petroleum Exploration Licences (PELs). This includes negotiation of native title matters and agreements.

  • Gehya will have exclusive 100% rights to explore for and produce natural hydrogen from within the area of the PELs. Lakes will retain exclusive 100% rights to explore for and produce petroleum from wthin the area of the PELs.

  • Recognising the similarity between hydrogen and petroleum exploration techniques, Lakes and Gehyra have the opportunity to coordinate their exploration efforts and share technical information.

  • In the event discoveries are made, Gehyra will pay to Lakes a twqo percent (2%) royalty on the value of any hydrogen produced
    and Lakes will pay to Gehyra a two percent 2%) royalty on the value of any petroleum produced.

The petroleum prospect of near-term interest to the Company are:

  • The potential for oil production to the north of Wilkatana (in a narea of closure, associated with the Torrens Hinge Zone, that can
    be identified on modern seismic data but which has not yet been drilled); and

  • The potential for production of gas from the Tindelpina Shale, which has been demonstrated to contain gas, but has not been explored using modern techniques.

Figure 2: South Australian Licence Application Areas