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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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ACQUIRE REMAINING 25%

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RED SKY TO ACQUIRE REMAINING 25% OF PRL182 FROM BENGAL ENERGY

ASX Announcement 24 October 2018 

Highlights 

  • Red Sky enters a conditional sale and purchase agreement to acquire Bengal Energy’s 25% interest in PRL182, p a r t o f the Innamincka Dome oil & gas project (“Innamincka Dome Project”), comprising six PRLs. 
  • The acquisition (which is subject to regulatory approval) offers: 
    • 100% ownership in the PRL 
    • Complete 100% ownership across all PRLs

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 conditional Sale and Purchase Agreement (SPA) with Bengal Energy (Australia) Pty Ltd (“Bengal Energy”), a Bengal Energy Ltd subsidiary to acquire that subsidiary’s interest in PRL182, part of 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 InnaminckaDome Project comprises a portfolio ofsix highly prospective petroleumpermits(PRLs) near the township of Innamincka in northeast South Australia. Red Sky executed a Sale and Purchase Agreement to acquire an operating interest in these permits with Acer Energy Pty Ltd, a Beach Energy Limited (“Beach”, ASX: BPT) subsidiary in July 2018, which remains conditional. With the execution of its agreement with Bengal Energy, Red Sky has now entered into conditional agreements to acquire a 100% stake in all six permits:

  • PRL14 (Flax oil field which was previously producing); 
  • PRL17 (Yarrow gas field); 
  • PRL18 (Juniper oil field); 
  • PRL180; 
  • PRL181; and 
  • PRL182

The acquisition of Bengal’s 25% interest will provide consolidation of 100% in the entire Innamincka Dome Project which represents a significant opportunity for Red Sky.”

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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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CEO & MD

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APPOINTMENT OF CEO AND MANAGING DIRECTOR

ASX Announcement 9 July 2018 

Red Sky Energy Limited (ASX: ROG) is pleased to announce the appointment of Mr Andrew Knox as its new CEO and Managing Director, commencing with immediate effect.

Andrew has over 35 years of experience in the upstream oil and gas sector. He has worked extensively throughout Australasia, South East Asia and North America with several entities.

He was formerly CFO of Cue Energy Resources Limited, a position he had held for 22 years. His prior role was CFO at Cultus Petroleum Limited.

Andrew has significant experience in financial and commercial activities, involving acquisitions, M&A and strategy. He is a chartered accountant (CA ANZ), public accountant (CPA Australia) and a fellow of the Australian Institute of Company Directors (FAICD). He holds a Bachelor of Commerce degree from the University of Western Australia.

Commenting on the appointment, Red Sky’s Chairman, Mr Guy Le Page, said:

“Andrew brings a wealth of oil and gas exploration and operational experience to Red Sky. We believe Andrew is well positioned to assemble a very capable team to bring Red Sky’s newly acquired Innamincka project back into production and fully exploit the potential of these quality Cooper Basin assets”

Andrew Knox said: 

“I am very excited to take up this opportunity. Starting with the Innamincka assets, my objective is to build Red Sky into a successful exploration and production company for the benefit of all shareholders.”

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QUARTERLY

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Red Sky Energy Limited Quarterly Report ending 31 March 2018

ASX Announcement 24 April 2018 

Highlights 

  • ROG has teamed up with several US and Australian Oil and Natural Gas Petroleum groups to evaluate certain oil and gas production sites in both the USA and Australia 
  • During the Quarter ROG continued evaluation work on quality, producing oil and gas assets in its endeavour to build a portfolio of onshore conventional oil and gas assets. 
  • Several groups of gas extraction specialists have been onsite reviewing the Gold Nugget gas well in order to ascertain best method extraction techniques that will keep the gas flow from this well consistent. 
  • ROG concentrated on further enhancing its interest in the Gold Nugget Gas Field whist looking for other oil and gas assets in North America and Australia for investment.

With the ongoing evaluation of the Gold Nugget Oil and Gas Field (“Gold Nugget”), Red Sky Energy Limited (“the Company” or “ROG”) is fulfilling its business plan of purchasing and developing producing and profitable North American and Australian based, onshore gas fields which have significant in ground reserves and are purchased at a significant discount to the capital invested and the known recoverable resources. These assets will provide the Company with cash flow even in the current price environment but more importantly will provide the Company with strong leverage into any environment of rising energy prices. The Company continues to locate, analyse and negotiate for acquisition, cash flow positive oil and gas assets. Production testing of certain wells will continue and we will be in a stronger position to move forward with new acquisitions of economical oil and gas fields by the beginning of the next quarter.

Gold Nugget 

During the first quarter of 2018 work continued on the Gold Nugget gas project in Wyoming, USA. New approaches to the ongoing development of the Gold Nugget gas well were investigated, which consists of having several Gas development and production consultants evaluate the well and set out a plan that by utilising best practise methods, will establish a consistent gas flow from the Gold Nugget well. Once the operator and the board has evaluated these submissions we will implement a revised development plan for Gold Nugget that will see it reach its full potential as a world class producing gas well in a world class gas field. As the contract for the compressor is now complete and it has not worked as well as first thought, it was decided to have the compressor removed and other extraction techniques investigated.

Our Field Manager States: 

“The Gold Nugget well has continued to be hard to produce. A compressor was moved onto location to try and keep the well flowing but has proved to be ineffective and not economical. The lack of stable production from this well has always been considered to be a mechanical issue and not a reserve one. According to all data we are understand the well has large reserves of natural gas. Marcus Pickard, a petroleum engineer, located in Wyoming has been engaged to take a look at the well, over time, and make recommendation as to how best operated such a temperamental outfit. From initial discussions it is thought that the best way forward is to change the production tubing in the well to a smaller size. Due to the depth of the perforations, size of the tubing and casing, pressure on the gas transportation line and other mitigating factors the well is unable to move the fluid and flow gas consistently. By changing the tubing from 2.5” to 2.0” it will significantly reduce the hydrostatic head and hopefully allow the well to unload and continually flow. We are still waiting on this and other engineer’s proposals before finalizing any plan. We will then move to execute the most appropriate and feasible plan.”

Even though the Gold Nugget gas well shows good signs of gas production and can reach production of over 600MCF in some cases, it remains inconsistent due to the high pressures associated with this well.

Gold Nugget is located in the Wind River Basin in Wyoming, one of the largest gas producing basins in the USA. Gold Nugget is a proven gas field with a discovery well (completed to 14,000ft in 2004), Well #1-23, that has historically produced 150 mcfpd of gas and 5 barrels of oil per day.

The Gold Nugget has been drilled to 14,000 ft and has 3,000 ft of Lance pay zone of which only 10% of the available porosity has been perforated.

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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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