OilVoice - Red Sky Secures Rig For its First CSG Well

Red Sky Secures Rig For its First CSG Well

Thursday, March 04, 2010

Key Points:
• Red Sky Energy contracts with TDC Drilling of Welshpool Western Australia (TDC);
• TDC is a cost competitive, experienced contractor with an excellent safety record;
• This is Red Sky Energy's first coal seam gas well, called Romona #1 after the local property;
• Located within ATP 840, west of the town of Moonie;
• Expected to spud in late January, targeting completion by end of February;
• To core prospective cretaceous coals within the Taroom Trough.

Red Sky Energy Limited, via wholly owned subsidiary Cydonia Resources Pty Ltd ('Cydonia'), has contracted a drilling rig for its first coal seam gas well. The well will test the cretaceous coals of the Rolling Downs Group and the Bungil Formation. This well, upon completion, will meet Red Sky Energy's initial farm-in obligations to Clark Oil and Gas and earn the Company a 50% interest in ATP 840.

TDC is an experienced drilling contractor, having provided extensive services to Origin Energy and Santos. The proposed rig, TDC Mindrill 1500 #7 to be mobilised out of Roma, will bring to seven the number of rigs TDC has operating in the Surat Basin. Importantly TDC has an excellent safety record.

As announced previously, permits ATP 840 and nearby ATP 904 are potentially a significant CSG resource:
• The permit totals approximately 1700km2.
• The permit is thought to contain extensive cretaceous coals of the Rolling Downs Group and the Bungil Formation
• These same coals have been reported to be gassy in nearby wells
• The permits represents a potential to host combined in place gas resources of 8 Trillion Cubic Feet (TCF) of Coal Seam Gas (CSG).