Lakes Blue Energy advances Wombat-5 testing, targets late-August next phase pending approvals

Lakes Blue Energy (ASX: LKO) says testing at Wombat-5 has added to the evidence that the well has intersected gas-charged reservoir rock, with pressure building to 1,764psi or 12.2MPa as at 26 May 2026 and a minimum 237 metres of gas-bearing sands identified behind casing.

The well is in the pressure build-up phase following earlier clean-up and initial flowback work.

In practical terms, that means the company has shifted from trying to unload the well and observe immediate flow behaviour toward collecting longer-duration reservoir data to better understand pressure response and connectivity.

Three gas-bearing zones have now been confirmed across an approximately 1,500-metre horizontal section, with strong gas shows reported throughout from C1 methane through C5 pentane.

Lakes said testing is continuing toward a pressure target of 1,800psi.

The more material change is the narrowing of the near-term work program.

The company said it is finalising a draft variation to the Wombat-5 Operating Plan with the regulator so it can move to a new intervention phase that includes reservoir-compatible completion brine placement, propellant enhanced perforating and baseline flow testing.

That phase is targeted for late August 2026, subject to approvals, completion-fluid testing and equipment availability.

Wombat Project Background

Wombat-5 is part of the Wombat field in the Gippsland Basin, where Lakes has been testing a horizontal gas well in the Strzelecki Formation.

The well test sits within a broader effort to understand reservoir quality, improve well connectivity and refine field development planning.

Alongside the well test, Lakes said Wombat 3D seismic reprocessing of the legacy 2008 dataset is progressing with Geomage.

Preliminary PoSTM results are said to show improved structural uplift and better vertical and lateral resolution within the Strzelecki Formation.

Final time and depth datasets are expected in mid-August 2026, with the company saying those outputs are intended to support inversion studies, design inputs for a planned Wombat 3D seismic acquisition program, and the Full Field Development Plan.

Testing and Work Scope

Lakes said it has identified a minimum 237 metres of high-quality gas-bearing sands behind casing and is planning a minimum 156-metre perforation interval across the highest-quality sands.

The proposed sequence is to place a reservoir-compatible completion brine, perforate the selected sections using propellant enhanced perforating, then carry out baseline flow testing at controlled rates followed by shut-in pressure build-up monitoring.

The company also said propellant stimulation guns are being evaluated as a later follow-up option, contingent on the flow-testing outcome.

No cost figures, budget ranges, ownership percentages, joint-venture parties or funding details have been disclosed.

On that basis, the significance of the update is technical and operational rather than economic.

What to Watch Next

A draft variation to the Wombat-5 Operating Plan is being finalised with the regulator, and the targeted late August 2026 start for the next phase is explicitly subject to that process.

The company said the work program also depends on completion-fluid testing and equipment availability, both of which can affect timing and final program design.

The result of the perforation and baseline flow-test phase itself will be key.

Earlier filings showed that while gas was observed across multiple zones, the well had not established full gas flow and further remediation was required.

Today’s update strengthens the case for gas-bearing intervals and improved targeting, but the filing does not disclose commercial flow rates.

Approvals Now the Key Driver

Today’s update strengthens the technical case that Wombat-5 has encountered gas-bearing reservoir intervals, but it does not yet settle the harder question of deliverability.

The next meaningful step is the regulator-approved perforation and flow-test phase, because that is where encouraging pressure and gas-show data would need to translate into quantified well performance.

Investors and industry watchers are also likely to monitor the timing overlap between the subsurface and well programs.

Lakes expects final outputs from the Geomage seismic reprocessing in mid-August 2026, only shortly before the targeted late-August well intervention window.

If delivered on schedule, that could give the company updated imaging inputs ahead of the next test phase.

Beyond that, the broader risks remain familiar from earlier filings: approval timing, operational execution, ongoing remediation requirements, and the unresolved question of whether Wombat-5 can demonstrate deliverability after perforation and possible later stimulation.