Lakes Blue Energy NL (ASX:LKO) is a junior energy explorer with assets across southern and eastern Australia (and PNG). The company has been listed on the ASX since December 1985. After recapitalisation and relisting the company has returned to exploration with the high-graded Enterprise North prospect set for drilling in Q2 ’23 and securing a partnering deal to commence activity in PNG. In the short-term, the success case at Enterprise North has the capacity to materially change the structure and value base of the company. A material gas discovery could be monetised relatively rapidly through a low capital cost development option or asset transaction, we suggest. We see a strong continuing role for gas in the energy transition and highlight the increasingly favourable operating environment. Crystallising the inherent value is dependent on successful drilling outcomes and the company’s capacity to continue to secure financing, but certainly the opportunity set looks attractive with a number of potential event drivers over the next 12 months.
