lko & tsv, page-9

TSV 900M@ 3.3c = $30m and 10% interest

LKO [email protected] = $25m and 100% interest

Warrow required expensive exploration wells, Wombat has 3 existing exploration wells which Lakes plans to flow test/frac and has deffered the much more expensive Exploration drilling Wombat 4

Proposed Operations
The following operations are scheduled for our wells during the next quarter, once all required approvals have been granted:
• North Seaspray 3: re-entry using coiled tubing unit, nitrogen lift clean-out and flow test the gas zone at 1,110m depth over an extended period.
• Wombat 2: re-entry, re-fracture and flow test the gas zone at 1,470m depth with a much larger fracture geometry.
• Wombat 3: re-entry, nitrogen lift clean-out and flow test the gas zone at 1,430m depth and the oil zone at 2,106m depth, which were fracture stimulated in 2005.

Furthermore LKO had Wombat independently valued at $50m - $88m = 1.2c - 2.1c (see numerous anns including ASX Price Query Response dated 3/4/09 and letter to shareholders dated 29/10/08)

and is in the process of getting the Trifon and Gangell fields valued

Lakes Oil NL has now commissioned the consulting group to provide us with an independent evaluation of the Trifon and Gangell fields in PRL 2, which will include results from the proposed testing at North Seaspray 3. Results of this evaluation are expected to be completed in the next two months. The evaluations will provide us with a much better perspective of the undeveloped tight gas resource contained in the Strzelecki Group in the southern part of PRL 2.