How Red Sky Energy's Killanoola Crude Sale Agreement with Viva Energy will Shape the Future?

Red Sky Energy, an Australian oil and gas explorer and developer, has recently signed a significant sale agreement with Viva Energy Australia Pty Ltd. The agreement entails the purchase of all crude produced from the Killanoola oil field project, marking a major step forward for Red Sky. But how will this agreement impact the company's production plans?

A Promising Market and Sale Agreement

Red Sky's Managing Director, Andrew Knox, expressed satisfaction with securing a market and sale agreement for the Killanoola crude. The agreement with Viva Energy in Geelong sets the stage for a productive partnership and ensures a market for their crude oil. This achievement brings Red Sky one step closer to actual production.

Conditions and Delivery Logistics

All crude produced and sold by Red Sky will be subject to specified quality specifications. Delivery of the crude will be made to Viva Energy's Geelong refinery by road tanker, which is approximately a four-hour drive southeast of the Killanoola Project.

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The pricing of the crude will be based on the dated Brent benchmark.

Government Approvals and Production Commencement

The next phases for Red Sky involve seeking necessary government approvals and commencing procedures to initiate production from the existing pay zone at the DW1 well. These steps are crucial milestones in the path to extracting oil from the Killanoola oil field. With the sale agreement in place and progress being made, Red Sky is optimistic about moving forward and starting production soon.

Background and Project Potential

Red Sky's Killanoola oil field has been the subject of ongoing exploration and development. With the acquisition of 3D seismic data, the Discovered Petroleum Initially In Place (PIIP) report was updated, taking into account additional net pay identified in the wells Killanoola SE-1 and Killanoola-1 DW-1. An Independent Competent Person's Report published in April 2023 revised the estimated amount of Discovered PIIP for Killanoola to potentially up to 135. 5 million barrels, a significant increase from the previous estimate of 93. 0 million barrels.

Anticipation for Future Operations

The sale agreement with Viva Energy represents a major accomplishment for Red Sky Energy. With the potential of significant oil reserves at the Killanoola oil field, the company is well-positioned to contribute to Australia's oil and gas sector. As Red Sky proceeds with the necessary approvals and production initiation procedures, all eyes are on the future operation of the Killanoola project and the positive impact it will have on the energy industry.

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