Red Sky (NT) has signed an agreement to acquire Beach Energy’s Innamincka Dome oil and gas project in the Cooper Basin, South Australia.
The acquisition includes a portfolio of six prospective petroleum tenements (PRLs) near the township of Innamincka, including PRL14 (the previously producing Flax oil field), PRL17 (Yarrow gas field), PRL18 (Juniper oil field), PRL180 and PRL181.
A subsidiary of Red Sky Energy, Red Sky (NT) will have a 75% interest in PRL182 and a 100% owned and operated stake in the remaining five PRLs.
Comprising all existing production infrastructure, storage tanks, yards and camp facilities, the transaction is expected to offer near-term analysis of production options from well-maintained shut-in wells and infrastructure.
The Innamincka project was shut down in 2015 because of a downturn in oil and gas markets.
Red Sky Energy will focus on resuming oil and gas production at Flax once the acquisition is closed.
The company is also planning to evaluate the unexploited Yarrow and Juniper fields, as well as the remaining tenements within the project.
Red Sky Energy CEO and managing director Andrew Knox said: “The Innamincka Dome project provides clear near-term upside for Red Sky. It fits our strategy of acquiring near-term producing assets with proven prospectivity and delivers a strong position with clear optionality in the heart of Australia’s well renowned onshore Cooper Basin.
“We will also seek to acquire similar fields in the region at the right price to build economies of scale and apply our technical and competitive advantages.
“The approximately 400km² acquisition of the Innamincka Dome area provides an attractive entry for Red Sky into the Australian conventional onshore oil and gas market.”
Flax previously produced at a rate of more than 200 barrels of oil per day (bopd) and the existing production facilities at the field have a processing capacity of 1,000bopd and a 2,400bbl storage capacity.
Red Sky intends to raise $2.2m, including $1.6m from a share placement and the remaining $600,000 through a non-renounceable rights issue.
The transaction is subject to fulfilment of certain conditions, including regulatory and joint venture approvals.
