Lakes Blue Energy (ASX:LKO) entered into an agreement for the sale of its 49% stake in Victorian Petroleum Exploration Permit 169, according to a Tuesday filing with the Australian Securities Exchange.

The sale consideration includes AU$3 million cash, to be received upon completion of a one-year extension of PEP 169's term, AU$3.5 million after the transfer of ownership to ADZ Energy, and a future royalty on net revenue from any sales of petroleum from ADZ Energy's existing 51% share of PEP 169, the filing said.

Proceeds from the sale will be utilized for commercialization of the Wombat and Trifon/Gangell gasfields in Gippsland, according to the company.