Lakes Blue Energy opened Victorian government talks on the Wombat gas project, modelling a $605m NPV and 58% IRR with first gas targeted for early 2029. The reference case shows a 1.4-year payback at a $12/GJ gas price.
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Lakes Blue Energy has opened discussions with Victorian government departments about the Wombat gas project's potential role in the state's domestic gas supply and firm energy requirements. The company prepared two briefing papers. One covers Wombat's contribution to forecast Victorian gas shortfalls. The other examines its possible role supporting AI and data centre infrastructure in Gippsland.
Lakes also completed a conceptual internal development study. It models Wombat as a $605 million post-tax net present value project with a 58% internal rate of return. The reference case targets first gas in the March quarter of 2029. The company emphasised the discussions remain preliminary. No agreement, endorsement, funding arrangement or development approval has been reached.
Lakes framed Wombat against Australian Energy Market Operator forecasts. Those show declining Victorian domestic gas production and increased reliance on imported supply over the next decade. The project sits in Petroleum Retention Licence 2 and contains a certified 2C contingent resource of 329 billion cubic feet. Previous independent production studies modelled output of 50 to 55 terajoules per day under certain scenarios.
The reference case assumes 250 petajoules total production, equivalent to about 240 Bcf of the current 2C resource. It models a 17-year production life, peak output of 55 TJ per day, eight initial development wells and 12 infill wells between 2029 and 2036. The study estimates initial development capital of $169 million. A further $84 million in infill well capital and $38 million in abandonment capital would come from future revenue.
The base case uses a reference gas price of $12 per gigajoule, a 10% discount rate, 22% royalties and a 30% corporate tax rate. Post-tax payback is about 1.4 years from first gas. Peak annual revenue is roughly $265 million in 2040 on a 3% escalation basis. The economics are most sensitive to gas price and discount rate assumptions. Capital and operating expenditure have a smaller modelled impact.
Lakes has not established petroleum reserves for Wombat. The production targets and financial forecasts are based on contingent resources, not reserves. The conceptual case depends on successful remediation of the Wombat-5 well, future well performance, reservoir pressure and permeability assumptions, regulatory approvals, infrastructure access and project funding.
The company plans a three-dimensional seismic survey over the Wombat structure before development drilling. The schedule allows for Wombat-5 testing in 2026, pre-front end engineering and design work, resource certification and FEED in 2027 before a final investment decision.
Separately, Lakes prepared a paper for Development Victoria examining how Wombat could support future AI-related infrastructure. The company sees the project as a near-term bridge source of local dispatchable energy, with longer-term potential to complement offshore wind, storage and transmission infrastructure.
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