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Corporate Spotlight

Red Sky enters a conditional sale and purchase agreement to acquire Beach Energy’s interests in the Innamincka Dome oil & gas project (“Innamincka Dome Project”), comprising a 100% interest in five PRLs and a 75% interest in another PRL.
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INNAMINCKA DOME

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APPLICATION FOR MINISTERIAL CONSENT TO ACQUIRE INNAMINCKA DOME PROJECT CAPITAL RAISING 

ASX Announcement 8 March 2019 


Highlights 

  • Red Sky proceeds to application stage for Innamincka Dome licenses 
  • Beach to support Red Sky’s application to the Minister 
  • Red Sky initiates capital raising pursuant to ASX Placement Capacity


Red Sky Energy Limited (Red Sky or the Company, ASX: ROG) is pleased to advise that, through its wholly owned subsidiary Red Sky (NT) Pty Ltd, it has made application for Ministerial consent to transfer the Innamincka Dome licenses from Beach Energy Ltd (Beach, ASX: BPT) to Red Sky.


This application follows agreement to amend the Sale and Purchase Agreement (SPA) with Acer Energy Pty Ltd, a Beach subsidiary, to acquire that subsidiary’s interests in the Innamincka Dome Project in the Cooper Basin, South Australia. The principal term of which is that Beach will continue to provide financial security for the licenses. Red Sky will provide an escrowed financial assurance of $800,000 and should Beach not be released from the financial security within six months then the licenses will revert back to Beach and the escrowed funds are forfeit. This amendment now means all conditions have been satisfied under the SPA once Ministerial consent has been granted.


Red Sky are now proceeding with the application for Ministerial consent.


The Innamincka Dome Project comprises a portfolio of six highly prospective petroleum tenements (PRLs) near the township of Innamincka in northeast South Australia. Beach’s interest in this portfolio comprises a 100% owned and operated stake in:


  • PRL14 (Flax oil field which was previously producing); 
  • PRL17 (Yarrow gas field);
  • PRL18 (Juniper oil field); 
  • PRL180; 
  • PRL181; and 
  • a 75% interest in PRL182 (remaining 25% being purchased from Bengal Energy (Australia) Pty Ltd).


The purchase of Beach’s interest in the Innamincka Dome Project is inclusive of all existing production infrastructure, storage tanks, yards and camp facilities. This infrastructure is modern and in excellent operating condition. The project was suspended in 2015 due to the downturn in oil and gas markets. The Company will initiate “re-start” planning for the Innamincka Dome Project immediately with a focus on resuming oil and gas production at Flax as soon as possible.


The acquisition will afford Red Sky with a significant opportunity to leverage the recovery from the oil price downturn by returning quality shut-in assets to production at the Flax field. Further significant opportunities exist within the unexploited Yarrow gas field and the Juniper oil field. Evaluation of the remaining highly prospective tenements provides even more opportunities. 


Mr. Andrew Knox, CEO of Red Sky, has agreed to lend to the Company the escrow amount ($800,000) as an unsecured loan which he has agreed will not become repayable in circumstances where the demand for repayment would create an event of insolvency for the Company. The term is for up to 18 months at an interest rate of 10% per annum. The loan terms provide for the issue of 66,670,000 ordinary fully paid shares to Mr Knox, the issue of which is subject to shareholder approval. If that approval is not obtained, the Company will pay Mr Knox an establishment fee of $100,000. Otherwise, the loan contains terms which are typical for agreements of a similar nature.


The Chairman Mr Guy Le Page commented ”having the licenses transferred to Red Sky is a landmark event which will provide the foundation for the future success of the Company. The Board thanks Mr Knox for his financial support which has enabled this funding arrangement to be negotiated. Mr Knox’s personal support is validation of, and inspires great confidence in, the quality of the Innamincka Dome Project.”


Capital raising and issue of shares 

The Company has entered into a mandate with Taylor Collison on a best endeavours basis to place 190M fully paid ordinary shares (81,070,879 per LR7.1A and 108,929,121 per LR7.1) at an issue price of $0.0018 (0.18 cents) per share to raise $342,000 before associated costs.


In addition, the Company will issue 100M shares to Taylor Collison upon Completion of the arrangement with Beach (see ASX announcement 10 July 2018).


As a means of minimizing cash spend, the Directors have agreed to shares in lieu of their outstanding fees and accruals up until the end of January 2019. These shares will be settled at the same price and terms as those issued under the placement with Taylor Collison. These shares will be subject to shareholder approval at a soon-to-be-convened shareholders meeting. 


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EXTENSION TO ACQUIRE

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EXTENSION TO ACQUIRE INNAMINCKA DOME PROJECT FROM BEACH ENERGY 

ASX Announcement 5 February 2019


Red Sky Energy Limited (“Red Sky” or “the Company”, ASX: ROG) is pleased to advise that it, through its wholly owned subsidiary Red Sky (NT) Pty Ltd, has further agreed to extend the time to complete the Sale and Purchase Agreement (SPA) with Acer Energy Pty Ltd, a Beach Energy Ltd (“Beach”, ASX: BPT) subsidiary to acquire that subsidiary’s interests in the Innamincka Dome Project in the Cooper Basin, South Australia until 14 February 2019.


Completion of the acquisition is conditional on obtaining Ministerial consent.


The Innamincka Dome Project comprises a portfolio of six highly prospective petroleum tenements (PRLs) near the township of Innamincka in northeast South Australia. Beach’s interest in this portfolio comprises a 100% owned and operated stake in:


  • PRL14 (Flax oil field which was previously producing); 
  • PRL17 (Yarrow gas field); 
  • PRL18 (Juniper oil field); 
  • PRL180; 
  • PRL181; and 
  • a 75% interest in PRL182 (remaining 25% being purchased from Bengal Energy (Australia) Pty Ltd).


The purchase of Beach’s interest in the Innamincka Dome Project is inclusive of all existing production infrastructure, storage tanks, yards and camp facilities. This infrastructure is modern and in excellent operating condition, the project having been closed in 2015 due to the downturn in oil and gas markets. The Company will initiate “re-start” planning for the Innamincka Dome Project immediately with a focus on resuming oil and gas production at Flax as soon as possible following completion of the acquisition.


The acquisition will afford Red Sky with a significant opportunity to leverage the recovery from the oil price downturn by quickly returning quality shut-in assets to production at the Flax field, as well as delivering options to seek to:


  • evaluate the unexploited Yarrow and Juniper fields; and 
  • evaluate the remaining highly prospective tenements within the Innamincka Dome Project.


About Red Sky Energy Limited 

Red Sky Energy is an Australian incorporated public company based in Melbourne, Australia and listed on the Australian Securities Exchange.


The Company’s principal activities are the exploration for and production of hydrocarbons.


Current assets include 100% working interest in the Gold Nugget gas production in Wyoming, USA however Red Sky is currently active in seeking to acquire near field development assets onshore and offshore Australasia and South East Asia.


Any queries regarding this announcement should be directed to the Company on +613 96140600 or e-mail: [email protected]


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INNAMINCKA

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RED SKY TO ACQUIRE INNAMINCKA DOME 

PROJECT FROM BEACH ENERGY

ASX ANNOUNCEMENT 10 JULY 2018

Highlights

  • Red Sky enters a conditional sale and purchase agreement to acquire Beach Energy’s interests in the Innamincka Dome oil & gas project (“Innamincka Dome Project”), comprising a 100% interest in five PRLs and a 75% interest in another PRL.
  • The acquisition (which is subject to regulatory and joint venture approvals) offers:
  • near  term  analysis  of  production  options  from  well-maintained  shut  in  wells  and infrastructure
  • strong   growth   outlook   from   non-producing   proven   fields   and   highly   prospective tenement
  • Capital raising proposed to be conducted under mandate with Taylor Collison to raise up to $2.2 million and re-development planning to commence immediately

Storage tanks – Innamincka Dome Project

Overview

Red Sky Energy Limited (“Red Sky” or “the Company”, ASX: ROG) is pleased to advise that it, through its wholly owned subsidiary Red Sky (NT) Pty Ltd, has entered into a binding Sale and Purchase Agreement (SPA)  with  Acer  Energy  Pty  Ltd,  a  Beach  Energy  Ltd  (“Beach”,  ASX:  BPT)  subsidiary  to  acquire  that subsidiary’s interests in the Innamincka Dome Project in the Cooper Basin, South Australia. A summary of the key terms of the SPA are set out in Annexure A. 

The Innamincka Dome Project comprises a portfolio of six highly prospective petroleum tenements (PRLs) near the township of Innamincka in northeast South Australia. Beach’s interest in this portfolio comprises a 100% owned and operated stake in:

  • PRL14 (Flax oil field which was previously producing);
  • PRL17 (Yarrow gas field);
  • PRL18 (Juniper oil field);
  • PRL180;
  • PRL181; and

 a 75% interest in PRL182 (held in joint venture with Bengal Energy (Australia) Pty Ltd).

The purchase of Beach’s interest in the Innamincka Dome Project is inclusive of all existing production infrastructure,  storage  tanks,  yards  and  camp  facilities.  This  infrastructure  is modern  and  in  excellent operating condition, the project having been closed in 2015 due to the downturn in oil and gas markets. The Company will initiate “re-start” planning for the Innamincka Dome Project immediately with a focus on resuming oil and gas production at Flax as soon as possible following completion of the acquisition.

The acquisition will afford Red Sky with a significant opportunity to leverage the recovery from the oil price  downturn  by  quickly  returning  quality  shut-in  assets  to  production  at  the  Flax  field,  as  well  as delivering options to seek to:

  •  evaluate the unexploited Yarrow and Juniper fields; and 
  •  evaluate the remaining highly prospective tenements within the Innamincka Dome Project. 

Following completion of the acquisition, the Company will be responsible for discharging all obligations and liabilities arising in respect of the assets purchased, including all liabilities relating to decommissioning, abandonment, rehabilitation, remediation or restoration of those assets.

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ABOUT

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Australian Listed Oil & Gas Acquisition and Development Company

Red Sky Energy Limited, is an Australian Listed Oil & Gas Acquisition and Development Company (ASX:ROG) that acquires, drills and develops onshore North American Oil & Gas resources that can be produced conventionally using proven advanced technologies and developed best practice methods. Red Sky Energy’s primary asset concentration is in Oil & Gas reserves in North America, focusing on cash-on-cash returns driven by a conservative valuation methodology and achieving operational efficiencies.

Red Sky Energy Ltd – Corporate Focus

  • Red Sky Energy is actively pursuing new opportunities in North American oil and gas that are profitable but are under replacement value in this current low price oil environment.
  • It is expected that these assets will supplement the company’s interest in the Cache Oil Field and greatly enhance its assets under management. Red Sky Energy intends to acquire these type of assets while the oil price remains low and whilst production can be purchased at a fraction of the cost normally associated with acquiring these types of oil and gas assets.
  • This acquisition on weakness strategy will build Red Sky Energy a substantial oil and gas asset base for when the oil price recovers and allow Red Sky Energy to become a strong oil and gas producing company with substantial reserves in place.
  • As a listed Australian company with a North American Oil & Gas focus, Red Sky Energy is uniquely positioned to take advantage of the current decline in the oil price. With one very exciting asset already acquired and several others currently under investigation, Red Sky Energy will very quickly develop into a good sized mid-cap company with healthy in ground reserves as well as profitable Oil & Gas production output.
  • Red Sky Energy has assembled a team with a demonstrated track record of excellent operational execution in the development and operation of Oil & Gas fields in United States. This is a team who has a proven track record and experience to analyse and evaluate these acquisitions whilst taking full advantage of any new technological advances in the Oil & Gas sector.
  • The strategy is to acquire existing producing Oil & Gas fields where there is significant upside from continued development and modifications. Further, the objective is to access opportunities without being involved in a direct bid process. Red Sky Energy’s key market differentiator lies in its strong team and well-credentialed team of Directors and Management who have over 100 years combined experience in locating, evaluating and developing Oil & Gas interests in mainland USA. Red Sky Energy’s focus will be acquiring underexploited assets in existing Oil & Gas fields and using modern-day technology to enhance production.

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THE BOARD

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NON EXECUTIVE DIRECTORS:

Mr. Clinton Carey

Mr Carey has 20+ years as a manager and director in a range of listed companies in the resources, Oil & Gas and technology sectors. Mr. Carey has extensive experience in the resource sector providing management, capital raising and corporate advisory services to a range of listed mining and energy companies. He has worked for mining and energy companies in Russia, Brazil, Australia and England..

Mr Guy Le Page

Mr Le Page is currently a Director & Corporate Adviser of RM Corporate Finance specialising in resources. He is actively involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles.

Mr Le Page was Head of Research at Morgan Stockbroking Limited (Perth) prior to joining Tolhurst Noall as a Corporate Advisor in July of 1998. As Head of Research, Mr Le Page was responsible for the supervision of all Industrial and Resources Research. As a Resources Analyst, Mr Le Page published detailed research on various mineral exploration and mining companies listed on the Australian Securities Exchange. The majority of this research involved valuations of both exploration and production assets.

Prior to entering the stockbroking industry, he spent 10 years as an exploration and mining geologist in Australia, Canada and the United States. His experience spans gold and base metal exploration and mining geology, and he has acted as a consultant to private and public companies. This professional experience included the production of both technical and valuation reports for resource companies.

Mr Le Page holds a Bachelor of Arts, a Bachelor of Science and a Masters’ Degree in Business Administration from the University of Adelaide, a Bachelor of Applied Science (Hons) from the Curtin University of Technology and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.

DIRECTOR/COMPANY SECRETARY:

Mr Adrien Wing (B. Bus, CPA)

Mr Wing is a Certified Practising Accountant and specialises in the public company environment. He practised in the audit and corporate divisions of a chartered accounting firm before providing corporate/accounting consultanting and company secretary services to public companies.

His experience includes accounting, administration, compliance, company secretarial, re-structuring and recapitalising companies on ASX. Mr Wing currently provides these services to several public companies on the ASX. He has served on a number of public company boards and related committees.

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