Join our daily newsletter At The Bell to receive exclusive market insights
- Red Sky Energy (ROG) opens green after reporting some successful rod testing at its Killanoola Oil Project in South Australia
- The company says after a few strokes, pressure built up in the production tubing up to 30psi
- This means the rods will be able to lift oil to the surface, with Red Sky declaring them fit for purpose
- Looking ahead, Red Sky says once this testing is complete, it will re-enter two wells to perforate two areas of potential pay
- Shares in Red Sky Energy are up 10 per cent and trading at 1.1 cents each at 10:33 am AEST
Oil and gas explorer Red Sky Energy (ROG) opened green today after reporting some successful rod testing at its Killanoola Oil Project in South Australia.
The company was given the green light to begin work on the project by the South Australian Department of Energy and Mining in late July and got cracking a week later.
Today, the Red Sky Managing Director Andrew Knox said the linear rods in the Killanoola DW-1 well are “free moving” and there is “pressure to build up”.
Essentially, this means the rods have been declared fit for purpose.
“We are now moving to recommission the pump at surface and prepare topside requirements to continue testing,” Mr Knox said.
Red Sky explained that after a few strokes, pressure built up in the production tubing up to 30psi. This means the rods will be able to lift oil to the surface.
In light of this, Red Sky will now take on a short test run to produce a sample from the DW-1 well. The company said this is to ensure its equipment will work for an extended period of time.
At the same time, the sample run will give the company more information about the quality of the oil and the reservoir at the Killanoola project.
Looking ahead, Red Sky said once this testing is complete, it will re-enter two wells to perforate two areas of potential pay: a recently-identified 37-metre zone in DW-1 and a 16-metre zone in the SE-1 well, also at Killanoola, highlighted in March this year.
The company said this should increase production rates “significantly” and plans and preparation work are underway for an extended production period.
Shares in Red Sky Energy were up 10 per cent and trading at 1.1 cents each at 10:33 am AEST. The company has a $46 million market cap.
