Why Did Red Sky Energy Enter into Agreements with SACBJV for the Yarrow Gas Project?

Red Sky Energy: Quarterly Activities Report and Strategic Developments

Red Sky Energy (ASX: ROG), a prominent player in the energy sector, has released its December 2023 Quarterly Activities Report, showcasing significant progress across its various projects. The company has achieved notable milestones in both its Innamincka Gas project and the Killanoola Oil Project.

Innamincka Gas Project: First Revenues and Seismic Acquisition

Revenue Generation: Red Sky confirmed its first revenues from the Innamincka project through the sale of processed gas.
Anticipated Liquid Sales: The company expects additional revenues from the sales of liquids.
Gas Sales Agreement: Under a bilateral agreement with Origin Energy Limited (ASX:ORG), Red Sky began its gas sales.

Seismic Acquisition and Strategic Partnerships

Completed Seismic Program: In collaboration with Santos Limited (ASX:STO), Red Sky completed a seismic acquisition program covering parts of PRL14 and PRL17 at the Innamincka Dome.
20% Working Interest: Red Sky holds a 20% interest in six PRLs and was free-carried through this program.

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SACBJV Agreements: Red Sky finalised agreements for Yarrow gas transport and processing with the South Australian Cooper Basin Joint Venture (SACBJV).

Killanoola Oil Project: Operational Progress and Government Approval
Production and Workover Plans

Initial Oil Flow: Oil flowed to the surface at Killanoola DW1, with an initial rate of 62 barrels per day.
Operational Challenges: Equipment issues led to the suspension of operations.
2024 Work Programme: Plans include new well drilling, sidetracking Killanoola-SE1, and pump replacement.

Government Approval and Sales Contract

SA Government Approval: Red Sky received approval to commence production at Killanoola DW1.
Contract with Viva Energy: Contractors have been mobilised for crude production, which will be sold to Viva Energy.

Corporate Strategy and Financial Position

Acquisition Pursuits: The company continues to actively pursue acquisition opportunities.
Cash Reserves: As of 31 December 2023, Red Sky had cash reserves of $2. 67 million.

Red Sky's Strategic Positioning and Future Outlook
Innamincka Dome Projects

Gas Sales Volumes: The quarter's gas sales amounted to 19,581gj’s, equating to revenue of $264,344.
Expected Sales Income: Approximately $1. 05 million in accrued sales income is due for both gas and liquids.
Seismic Acquisition Results: The results of the seismic program are expected by the end of 2024, crucial for full field development planning.

Yarrow Gas Field Developments

Infrastructure Developments: Construction of a pipeline and tie-in to the network south of the Yarrow gas field were completed.
Yarrow-Flax-Juniper Line: The YFJ line now extends to 14km following the flowline transfer to SACBJV.

Red Sky's Path Forward

Red Sky Energy's progress in the last quarter of 2023 highlights its commitment to advancing its projects efficiently and effectively. The achievements in both the Innamincka Gas and Killanoola Oil projects, coupled with strategic agreements and government approvals, position the company well for future growth. Red Sky's focus on optimising operations, combined with a strong financial foundation, sets a promising course for continued success in the energy sector.

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