Red Sky Energy (ASX: ROG) Signs Landmark Contract for Block 6/24
Contract Signing
Red Sky Energy (ROG: ASX) has announced a significant milestone with the signing of a Risk Service Contract (RSC) for offshore Block 6/24 in Angola. The agreement, finalised with the Angolan National Agency for Oil, Gas and Biofuels, grants Red Sky a 35% interest in the block, which is noted for its high prospectivity.
Block Details and Potential
Block 6/24 spans 4,930 square kilometres and is covered by extensive seismic data, including 1,531 square kilometres of 2D seismic and 1,465 square kilometres of 3D seismic. Red Sky’s evaluation of the data indicates significant potential for oil reserves. The block includes the Cegonha oil discovery, with subsequent geological studies expected to confirm its commercial viability.
Future Steps
The immediate focus for Red Sky includes formalising a Joint Venture Operating Agreement among its partners and gaining approval from the Angolan Parliament, anticipated within 90 days. The first three years will be dedicated to geological and geophysical studies, paving the way for potential drilling decisions in the fourth year based on initial research results.
CEO Comments
Andrew Knox, Managing Director of Red Sky Energy, stated, “The signing of the RSC Block 6/24 marks our first entry into Angola and is a transformational milestone for Red Sky. This strategic move positions us for sustained growth and stability by diversifying our portfolio across different regions and resources.” Knox highlighted the potential for early production and the opportunity to attract project financing for development activities.
Implications for Red Sky Energy
The RSC enhances Red Sky’s asset base and opens avenues for substantial cash flow through the Cegonha oil field’s development. Continued success in Angola could potentially bolster the company’s market position and offer long-term growth through future discoveries and increased production capabilities.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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