Lakes Blue Energy (ASX: LKO), an Australian oil and gas exploration company focused on developing low-cost energy sources, today provided an update on drilling operations at its Wombat-5, side-track-1 (ST-1) well in the Gippsland Basin, Victoria. As of 8:00 am AEST today, the well has been active for 17 days since spud, with a current depth of 470 metres below the rotary table (mRT). There has been no progress in the last 24 hours. The last casing point was set at 302.4 mRT. The company is currently drilling through the Gippsland Limestone formation, with the target formation being the Strzelecki Formation at a depth of 1,360 mRT (TVD). There have been no lost time injuries (LTIs) related to health, safety, and environment.
Since the previous update, Lakes Blue Energy has initiated an independent investigation into the mud circulation issues encountered during drilling. A draft of the investigation’s findings is expected to be received today. The company has also received the contractor’s final report at 8:30 am this morning and is presently reviewing its contents. The free section of the drill-string has been successfully recovered from the hole, from above a depth of 896 mRT. A cement plug has been set back from that level to approximately 470 mRT, with good cement returns, indicating the hole is still in good condition.
Following further mud circulation failures on Saturday, a potential solution to the mud circulation system issue has been identified. The system is currently undergoing stress testing, and no further issues have been observed so far. Upon completion of the stress testing and the arrival of necessary replacement equipment for the bottomhole assembly on-site, the 8-1/2” directional assembly will be ready to run in-hole to commence drilling toward the 7” casing point.
The decision to recommence drilling is contingent upon the company’s review of both the independent expert’s report and the contractor’s final investigation report. Lakes Blue Energy must conclude that the rig is fit for purpose and that the contractor’s assurances regarding the suitability of the mud circulating system are satisfactory before proceeding. The announcement was authorised by the Board of Lakes Blue Energy.
