Flax Facility at Innamincka. Source: Red Sky Energy
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  • Red Sky Energy (ROG) progresses activities across its South Australian projects
  • Activity notification for the DW-1 well at the Killanoola Oil project is reportedly in final stages with the state government Department for Energy and Mining
  • Final planning has begun at the SE-1 well with ROG looking to secure a work-over platform to allow production tubing to be run
  • At the Innamincka project, Santos (STO) has scheduled drilling at the Yarrow well and ROG is free carried through this work
  • Shares have been trading steady at 0.8 cents

Red Sky Energy (ROG) said progress is being made across its South Australian projects.

Three activities are currently underway at the Killanoola Oil project.

Red Sky is awaiting approval from the state Department for Energy and Mining (DEM) to begin testing five metres of pay at the DW-1 well, where in September the company completed slick-line operations.

The company said the activity notification for approval is in the final stages and works are ongoing for preparation of topsides in anticipation of the approval.

Additionally, negotiations are advancing at the SE-1 well for the acquisition of a work-over platform to allow production tubing to be run without the need to mobilise a rig.

A rig was initially required to run production tubing at the SE-1 well before wireline perforation testing could begin, as requested by the DEM.

ROG does not intend to complete the wireline perforation of the zones of interest until ready at DW-1, and subsequently is looking to secure a work over platform.

By owning the platform, Red Sky said it will be available for utilisation in future well intervention activities.

Moreover, discussions with landowners about seismic acquisition in the area have concluded, with ROG thanking the related parties for their understanding and assistance.

An additional associated activity license has been approved to allow the seismic acquisition to exceed the licence limits by five square kilometres, which the company hopes will better facilitate and improve the imaging.

Managing Director Andrew Know said the company was encouraged by the progress being made across its projects.

“The Red Sky team continues to navigate unexpected delays and is making solid headway on the current activities,” he said.

“Red Sky has also continued discussions with landowners for the forthcoming 3D seismic acquisition over the entirety of PRL13 and it should commence shortly.”

Over at the Innamincka Dome projects, Australia’s second-largest independent oil and gas producer, Santos (STO) has advised drilling is scheduled to commence at the Yarrow well in the last week of December with civil works to start this month.

Red Sky is free carried through the drilling of this well which has been previously estimated to have a 2C contingent resource of 18 billion cubic feet.

In relation to the farm out terms of the Innamincka Dome projects, Santos is set to earn an 80 per cent interest and operatorship.

This is based on STO funding 50 square kilometres of 3D seismic testing over the existing Yarrow gas field, costing up to $1 million.

Santos will also fund an appraisal well in the Yarrow gas field up to $3 million, and a horizontal appraisal well in the Flax oil and gas field in a different area for up to $5 million.

Subject to satisfactory appraisal outcomes, Santos will also initially fund 100 per cent of any approved development of the fields, and be repaid for Red Sky’s share of such development expenditure out of Red Sky’s share of production.

Andrew Knox said notification of STO’s plans to begin drilling is “excellent” news to round out calendar year 2021.

Shares were trading steady at 0.8 cents at 12:53 pm AEDT.

ROG by the numbers
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