Red Sky Energy (ASX:ROG) to raise $4M for Beach Energy’s (ASX:BPT) Killanoola interest

• Red Sky Energy (ROG) is aiming to raise $4 million to purchase Beach Energy’s (BPT) interest in the Killanoola oil project in South Australia
• The interest includes the South Australian Petroleum Retention Licence 13 (PRL-13)
• To pay for the interest and exploration work at Killanoola, the company will undertake a rights issue
• Red Sky will offer existing shareholders one new share for every one existing share at 0.2 cents per share
• On the market this afternoon, the company is up 25 per cent and is trading for 0.3 cents per share

Red Sky Energy (ROG) is aiming to raise $4 million to purchase Beach Energy’s (BPT) interest in the Killanoola oil project in South Australia.

The interest includes the South Australian Petroleum Retention Licence 13 (PRL-13). The licence covers an area of 17.5 square kilometres and is located in southeastern South Australia.

The Killanoola oilfield was discovered in 1998 from the Killanoola-1 well and produces a light oil. Previous flow tests have recorded rates of up to 300 barrels of oil per day.

In 2011, Killanoola Southeast1 well was drilled within the PRL-13 area and also discovered oil. However, this well has not been tested.

On completion of this purchase, Red Sky will initiate re-start planning for Killanoola 1 well, with a focus on resuming oil production as soon as possible.

Additionally, the company plans to undertake a 3D seismic survey, test the Killanoola-Southeast1 and complete a field development plan (FDP). The FDP will guide the development of the entire field.

Rights issue

To raise the $4 million, the company will undertake a rights issue. Red Sky will offer existing shareholders one new share for every one existing share at 0.2 cents per share.

Funds will go towards securing the licence, the redevelopment of the Killanoola field, and the company’s existing Gold Nugget Gas project.

On the market this afternoon, the company is up 25 per cent and is trading for 0.3 cents per share at 2:00 pm AEDT.