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Lakes Oil will front the Victorian government in the Supreme Court today in a bid to get its ban on gas exploration overturned.

Last year the state government suspended conventional onshore gas exploration until 2020 and permanently banned unconventional exploration including hydraulic fracturing (or fracking) and coal seam gas.

Chairman Chris Tonkin is “quietly confident” that Lakes Oil will be successful. “We think we’ve got a good case,” he told Stockhead.

Mr Tonkin said Lakes Oil came very close to bankruptcy following the introduction of the ban.

“The government almost bankrupted the company, but we have had support from shareholders and we’ve done some capital raisings and there’s enough to get by on,” he said.

Lakes Oil had around $3.5 million in cash at the end of 2017.

LKO shares over the past year.
LKO shares over the past year.

“We just want to get back into action again and we are still quite happy to reach an accommodation with the government, but to be able to do that you have to be able to speak to them and they’ve refused to speak to us every time we’ve made an approach,” Mr Tonkin said.

To keep the company solvent, Lakes Oil acquired Navgas, which owns gas acreage in Queensland and South Australia.