Energy: Red Sky nabs oil & gas giant Santos as its partner in the Cooper Basin; shares fly 300pc

Red Sky Energy (ASX:ROG) has struck a farm out deal and operating agreement with Santos on its Cooper Basin oil and gas licences.

Santos can earn an 80 per cent interest by sinking up to $9m into Red Sky’s Innamincka Dome projects. In addition to advancing the projects it will relieve Red Sky of its bond provision obligations with the South Australian government.

Shares have surged from 0.1c to as high as 0.4c this morning as shareholders responded with excitement to Santos’ endorsement of the project.

CEO Andrew Knox said the partnership validated Red Sky’s strategy to develop high quality assets that could be bought into production relatively quickly.

“The Red Sky-Santos transaction is well timed to take advantage of the historically high AUD oil and gas prices in the current environment,” he said.

Red Sky bought four oil and gas projects in the Cooper Basin back in May.

 

In other ASX energy news today:

Additional data has led to Strike Energy (ASX:STX) upgrading the view of its West Erregulla-2 gas discovery, part of a joint venture with Warrego Energy (ASX:WGO). Net pay has increased by 17m to a total of 58m using the cut offs from the nearby Waitsia field. Strike’s managing director Stuart Nicholls said the gas discovery “exhibits characteristics of one of the highest quality gas finds in onshore Australia”.

Whitebark Energy (ASX:WBE) has updated the production flow rate for the Rex-2 well at Wizard Lake. In the last 24 hours, the average flow rate was 700 barrels of oil equivalent per day. This included 350 barrels of oil and 2.1 million square cubic feet per day of gas. Managing director David Messina said the Rex-2 well continued to outperform and exceed the company’s expectations. He also said the performance provided impetus to drill Rex-3 as soon as possible and it was on track to spud by the end of year.

Renergen (ASX:RLT) appointed a drilling contractor at its Virginia gas project – Bohrmeister Technik. Site mobilisation will occur within the next fortnight and drilling will run to the end of the year.

Australian Pacific Coal (ASX:AQC) is mulling whether it will appeal the NSW Independent Planning Commission’s (IPC) decision not to approve a five year extension to its Dartbrook mine in the Hunter Valley. The company said the IPC knocked back the approval despite the NSW Department of Planning and Environment saying “the impacts of the modification are acceptable and the proposal is approvable” so long as Australian Pacific Coal meets the necessary conditions. The company has until November 8 to appeal.

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