The company has signed an agreement with the Chinese Research Institute of Petroleum Exploration and Development – Northwest (NWGI), a subsidiary of PetroChina, to exchange research for the future development of tight gas in the area.

Under the agreement, NWGI will research Lakes’ tight gas technology, and match it with similar work already being done in China to provide seismic re-processing.

The two companies will use Lakes’ data to evaluate possible reservoirs and liquids suitable for commercialisation.

In addition, Somerton Energy has announced that it will join Lakes Oil and Beach Energy in their exploratory program to test Wombat’s commercial gas potential.

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Somerton is set to acquire an interest of up to 5 per cent in PRL 2 from Lakes Oil at an estimated cost of $A3.33 million, pending completion of final documentation.

Somerton also has an option to acquire a further 11.7 per cent interest of the project to further appraisal and development of the Wombat field.

The Wombat tight gas accumulation in the onshore Gippsland basin has been independently estimated by Gaffney, Cline & Associates to contain a 2C contingent gas resource of 329 billion cubic feet.

The PRL 2 permit is operated by Lakes Oil NL, currently holding an 80 per cent interest, with Beach Energy holding a 15 per cent interest and Somerton Energy a 5 per cent interest.