latest lko announcement is all good.

Today LKO announcement as follows:



27 January, 2004

UPDATE ON PRODUCTION TESTING OF “WOMBAT- 1” WELL, PEP 157
Onshore Gippsland Basin, Victoria


On 25th and 26th January 2004 Lakes Oil N.L. (“LKO”) carried out two cased hole Drill Stem Tests (DSTs) to test two prospective intervals in the Wombat-1 well in the PEP 157 permit onshore Victoria.

This follows two open hole DSTs that were carried out earlier and gave results respectively of 25,000 cubic feet of gas per day for DST#1A over the interval 1358-1449 metres and 250,000 for DST#2 over the interval 1740-1834.8 metres.

DST#3 is the first cased hole DST and was carried out on 25th January in the Strzelecki Formation from 1946-1957 metres. This test was carried out over a section where high gas readings were observed in concert with a drilling break and electric logs showed crossover with a potential 10 metres net gas column. DST#3 recovered brine (completion fluid) that was gas cut and analysis of the pressure data indicated a tight formation.

The second well test, DST#4 was performed on 26th January over the interval 1532-1591 metres in the Golden Beach Formation sands. These sands are the productive reservoir at the nearby offshore Kipper Field. The test flowed at a maximum rate of 100,000 cubic feet of gas per day on a 1/4 choke.

The Wombat-1 well is the first well on the Wombat structure and is only 4 kilometres from the Esso-BHP gas pipeline and 15 kilometres from the Longford gas plant.

The next test will be in the Golden Beach over the interval 1497-1515 metres. Indications during drilling suggest that this is the primary zone of interest.

This will be followed by a test in the Latrobe Formation. The Latrobe is the productive formation in the giant Bass Strait oil and gas fields.

The Wombat Block is located in PEP 157. Lakes Oil has retained a 92.5% interest in the Wombat Block subject to a 5% overriding royalty held by Roma Petroleum N.L.


Yours sincerely
LAKES OIL N.L.
ROBERT J. ANNELLS
Chairman