Oil and gas plays Red Sky and BPH climb after taking the latest steps to paydirt
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The pair of companies both rose this morning off the back of a successful linear rod pump inspection and new research reports respectively.
As oil prices have recovered from their COVID lows, many oil and gas plays have gained but Red Sky has been one of the best performers of the year, more than quadrupling.
The catalyst was an announcement in March that it had identified 10 times more net pay (economically producible hydrocarbons) than it was expecting at its Killanoola project in South Australia.
Today the company told shareholders a linear rod pump at the project had undergone inspection last week and passed with flying colours.
Linear rod pumps are devices used by oil and gas companies to conduct artificial lift – a process that increases pressure on the reservoir and encourages oil to the surface.
Red Sky Energy (ASX:ROG) told shareholders once all the surface components had been checked and fit for purpose it would undertake a short term test run followed by an extended test.
The company says it would ascertain more information about the quality of the oil and the reservoir during such a process.
ROG’s ASX shares rose by over 10 per cent this morning.
The company is only indirectly in the oil and gas space, as an investee in a company called Advent Energy which has an offshore gas project in the Offshore Sydney Basin.
Today, BPH revealed Advent had further reviewed research reports by state and federal geoscience authorities which confirmed natural gas features in the Offshore Sydney Basin and identified a series of large pockmarks.
Pockmarks are crater-like depressions on the seabed associated with the release of fluids such as gas.
BPH also reminded shareholders about the government’s funding for carbon capture and storage technology, announced in last week’s Budget. The company says the project is the closest potential offering of storage capacity for carbon capture and storage to Sydney and Newcastle.
Just like ROG, BPH’s ASX shares rose by over 10 per cent this morning.