You are using an older browser version. Please use a supported version for the best MSN experience.

Lakes Oil may challenge Vic gas ban

AAP logoAAP 8/09/2016

Junior explorer Lakes Oil says it is considering legal action against the Victorian government's decision to ban gas exploration in the state.

"Lakes Oil confirms that it is formally investigating the potential for legal action. Shareholders will be kept informed," the company said in a statement to the ASX on Thursday.

The Andrews Labor government said on August 30 it will prohibit fracking and the exploration of unconventional gas in the state, and has also extended its ban on conventional gas exploration until mid-2020. The move would protect farmers, it said.

Australia's peak gas body this week said Victoria's ban on exploration was bad policy that could spread to other states.

Australian Petroleum Production and Exploration Association chief executive Malcolm Roberts told reporters the Victorian government had given into activist pressure, and the ban could hurt the state in the long term.

Lakes Oil has said it has already been impacted by the ban, after losing underwriting on a $7.1 million capital raising. While its fund raising issue will close on Friday, it will also need to provide subscribers a one-month opportunity to redeem their subscriptions.

The company, which has operated in Victoria for decades, says it has invested more than $100 million in the exploration in the state.

Gina Rinehart's Hancock Prospecting lifted its stake in the junior company to 20 per cent earlier this year.

image beaconimage beaconimage beacon