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Tim O’Brien knows the lonely, lush paddocks of Victoria’s Gippsland Basin even better than some of the locals.
For more than two decades he has been the quiet constant at Lakes Blue Energy, the Melbourne resources firm formerly known as Lakes Oil, which he joined in August 2003 as a petroleum geologist fresh out of Monash University.
As the firm’s chief operating officer and along with the board, he has been navigating the shifting sands of geology, politics, and regulation in his determined pursuit of a single belief: that the Wombat gas field near the tiny town of Seaspray holds the key to helping solve Victoria’s gas supply crisis.
”My master's project was over an area that Lakes Oil had the permits over. One thing led to another, and here I am,” he says. ”Wombat was the first serious well that Lakes Oil drilled while I was with them and then we obviously made the discovery. I was out there, enjoying the flares and the learning experience. We were thinking we were off on our way.”
Then, the momentum came to an abrupt halt. In late 2004 Wombat-3 flowed at an estimated three million cubic feet of gas per day, which would have been a commercial rate, before the well collapsed due to a single casing miscalculation but it showed what the formation can produce.
In 2012 came the Victorian moratorium on onshore gas exploration, compounded by a subsequent 2017 fracking ban. It meant O’Brien’s rigs stayed parked. Years of frustration passed.
Now, in 2025, the culmination of his efforts may finally be within reach.
Last year the Victorian Labor government introduced legislation to support offshore gas storage in the state, saying it would provide certainty to the gas industry as well as companies undertaking exploration activities.
The Wombat Gas Field is now one of the very few onshore, conventional gas plays in Victoria, offering the rare trifecta of proximity to infrastructure, high gas quality, and low-cost extraction.
With Australia’s east coast forecast to face significant gas shortfalls as early as 2026, Wombat is back in focus, and Lakes Blue Energy is making its move.
Backed by a successful $6.5 million capital raising underwritten by Morgans, Lakes plans to not only fund Wombat-5, but also return to the ASX boards after a decade in limbo going in and out of suspension as the companies’ finances and shareholders were strained.
“We are a public company. We have 12,000 shareholders and have been in contact with the ASX for some time. We are of the view that we were always going to be relisted at some point,” says Lakes Blue Energy chief executive Richard Ash, who took over from long-serving CEO Roland Sleeman in December. Previously Ash was chairman.
But he stresses that the order of operations matters: Get drilling approval first, then relist, offering the best path for investors.
Among those shareholders are some of the biggest names in Australian resources. One is Gina Rinehart, via her Hancock Prospecting subsidiary Timeview Enterprises, which holds a 4.63% stake in Lakes Blue Energy. DGR Global’s Nick Mather, the man behind Arrow Energy, Bow Energy, and more than $5.7 billion worth of resource sector exits, is also a substantial investor and on the board.
“So this fundraising is critical in the sense that it will not only fund the development of Wombat, which is where the majority of the money is going, but the balance of those funds are going to help us with the Nangwarry CO2 well in South Australia, and developing that into a production resource which will produce several million dollars worth of cash flow a year,” Ash says.
“As well as doing some other works at our projects in Queensland, Portland and Papua New Guinea to not only keep those licenses valid, but to prepare for the inevitable drilling and development.”
Ash, a chartered accountant with decades of experience across Europe and the Asia-Pacific, has a keen interest in ESG and decarbonisation. But he is also a pragmatist.
“It is well documented that additional energy is needed on the east coast of Australia. Gas is seen as the natural filler for that gap. Whether you see it as a transition fuel or a long-term solution, the demand is real,” he says.
“We know there is gas at Wombat. We’ve drilled four wells. This fifth well, Wombat-5, it’s about proving commercial flow. If that happens, and we believe it will, then we are talking about supplying 10% of Victoria’s gas. With other opportunities, we could be supplying 10% of Australia’s gas.”
Tim O’Brien stresses that gas was one of the main resources that long made Victoria the manufacturing heartland of Australia.
“It was all on the back of cheap electricity from coal and cheap gas,” he says.
”We have now lost the majority of that industry and whether we can get that back or not is in question. But at least just for keeping the domestic gas market going and the uses that we still have for gas as residential consumers, it is fundamental. Wind and Solar can't keep the lights on.”
The Lakes drilling plan is now ready.
The operation, scheduled for July, pending final ministerial consent, plans to drill the Wombat-5 well targeting the upper, more permeable section of the gas-saturated Strzelecki Formation
The drilling process will employ a novel 15-stage swellable packer completion, a first in Australia.
“We run the casing string with 15 packers isolating each 100-meter section,” O’Brien says. “No cement, so no formation damage. Every section contributes. It gives us the best possible shot at commercial flow.”
The Initial gas flow rate potential is forecast to be 10 terajoules per day, with an estimated annual production potential of 20 petajoules.
For the past decade, Lakes has operated on fumes. With little revenue and legislative uncertainty, the company has adopted a skeleton structure.
“It has been Tim full-time, myself and Roland part-time, and a bookkeeper,” Ash says.
“That is it. We’ve kept it lean by necessity. But also strategically, we were waiting for the world to come to us.”
He believes the Lakes portfolio underscores what sets the company apart from the competition.
“I think strategic used in its proper context actually matters,” he says. ”Strategic means you have some sort of advantage. In our case, it is a cost, location and infrastructure advantage that allows you to deliver, for the long term, product at a price that other people can't.”
But more than the economics, O’Brien, Ash and their fellow directors and staff feel the obligation to deliver for their patient, long-time backers.
“This has been a journey for the shareholders, there is no question about that. The board and management have invested significantly, from a personal point of view, in this,” he says.
”We've had a lot of supporters for a long period of time, and I think giving them the opportunity to see this come to some sort of conclusion and progress to the next phase is exciting. Where it goes, we will find out. But the good news is we have more than one opportunity. Wombat isn't all of it. It is but one asset. So we have the opportunity to take Lakes to what it should have always been.”
