Rinehart buys major stake in Lakes Oil
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Mining billionaire Gina Rinehart has snared a major stake in veteran oil and gas explorer Lakes Oil.
A subsidiary of Mrs Rinehart's Hancock Prospecting secured its diluted 18.6 per cent stake after buying $4.25 million of unsecured notes as part of an extended capital raising.
Under the deal, Lakes Oil has agreed to appoint climate change sceptic and mining geologist Professor Ian Plimer to its board.
Professor Plimer already sits on the boards of family companies controlled by Mrs Rinehart, including Hancock Prospecting.
"Is it contemplated that a further Hancock nominee will be appointed as a non-executive director in due course," Lakes Oil chairman Robert Annells said in a statement on Tuesday.
Mrs Rinehart's decision to invest in Lakes Oil came after it suffered a $4.91 million shortfall in its capital raising in late 2012.
It raised just $2.29 million in its issue of unsecured converting notes at $10 each. Each note will convert into 5,000 shares.
Lakes Oil directors at the time reserved the right to place the remaining notes at their discretion, with Hancock stepping in to help mop up the shortfall.
Major shareholder Armour Energy, which took part in the initial capital raising, also opted to buy an extra $1.758 million worth of the notes.
Its stake in Lakes Oil also now stands at 18.6 per cent.
Mr Annells said the capital raising would enable Lakes to progress its planned oil and gas activities including the drilling of two shallow wells in the Lakes Entrance oil field.
Lakes Oil describes itself as an unconventional oil and gas company, and the oldest one of its kind still operating in Australia.
The company, which was formed in 1946, started out by producing oil from shallow glauconite sands at the Victorian town of Lakes Entrance.
It has been more recently focusing on drilling wells near the Yallourn power station in Victoria's Gippsland Basin amid hopes it can recover oil from carbonaceous rocks.
Lakes hopes it can replicate the success of companies in the US, where oil is being produced from similar source rocks and shale.
Shares in Lakes Oil were 0.1 of a cent higher at half a cent at 1346 AEDT.