Hancock Prospecting Buys Stake in Lakes Oil

Australian mining magnet Gina Rinehart's Hancock Prospecting has purchased a stake in Melbourne based unconventional oil and gas player Lakes Oil Ltd.

Lakes Oil said in a statement that Hancock, through its subsidiary, has acquired 18.6 per cent stake in the company worth $4.25 million.

Australia’s unconventional oil and gas sector is a good place to invest so long as the location is right, Sydney Morning Herald said in a report citing one of the top executives at Hancock Prospecting.

Rinehart's investment was made despite Victoria's moratorium on fracking approvals, which will remain in place until a national framework can be developed later this year, the newspaper said.

Lakes Oil is focusing on the Otway basin and the Gippsland basin - which is close to the traditional Bass Strait oilfields as well as the Latrobe Valley power stations – and the Rinehart camp had been impressed with the location of the tenements.

''This particular opportunity came to us late last year and we think it has got particularly good upside. It has a great location, with shale gas there is no point having it if it's not close to the infrastructure where you can do something with it,'' SMH quoted Hancock's chief development officer, John Klepec. ''For us it is not a massive investment, but it is a large stake and we think it is one of these things that is a long-dated option with huge upside and limited downside.''

Meanwhile, Lakes existing partner Armour Energy has also hiked its to 18.6% by investing $1.75 million.