Iron Ore Group Announces New Financial Stake in Victoria's Oil and Gas Industry

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Researched by Industrial Info Resources Australia (Perth, Australia)--Hancock Prospecting Pty Limited (HPPL) (Perth, Australia) invests funds to enable Lakes Oil NL (ASX:LKO) (Melbourne, Australia) to progress with intended oil and gas plans in the Australian state of Victoria.

HPPL has long been involved in the Pilbara region and iron ore industry. The oil and gas production industry is well established in the states of Queensland and Western Australia, and this investment indicates that Australia's oil and gas resources do not stop at the border.

Timeview Enterprises, a wholly owned subsidiary of Hancock Prospecting, purchased $4.42 million (AUS$4.25 million) worth of Lakes Oil convertible notes. If fully converted into shares, HPPL will hold an 18.6% stake in Lakes Oil.

Lakes Oil says that the money will be raised by converting notes priced at $10.4 (AUS$10 each). The investment comes as Lakes Oil's existing partner in Victoria, Armour Energy Limited (ASX:AJQ) (Brisbane, Australia), has invested an additional $1.92 million (AUS$1.75 million) in Lakes Oil to give it a matching 18.6% stake.

Lakes Oil is an unconventional oil and gas company and the oldest Australian oil and gas explorer still operating in the country. Unconventional methods include the process of hydraulic fracturing, known as "fracking."

Lakes Oil stopped exploring for gas last year, when the Victorian government announced a moratorium on coal seam gas exploration and fracking. There are concerns that the investment will influence the state government's moratorium.

Fracking is the process which underpins more than $62.5 billion (AUS$60 billion) of gas export projects under development in Queensland. Victoria's state government has called for submissions on the current ban; however, the federal government is pushing with industry to have the ban lifted.

HPPL nominated Professor Ian Pilmer to the board, and a second nominee is to be appointed in the future. The group has significant plans for further development in both the Pilbara region of Western Australia and other areas in Australia.

In the Gippsland Basin, Lakes Oil has drilled a corehole (Yallourn North-1A) along northern margin of the basin and intends to follow up with further drilling in PEP166 that will contribute to this new data obtained in the corehole.

In the Otway Basin, Lakes Oil has re-mapped and re-processed available 3D seismic data and identified several drilling prospects.

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