Why are Red Sky Energy shares skyrocketing today?

Source: Oil and Gas Photographer, Shutterstock

Summary

  • Red Sky Energy has received promising results from its petrophysical evaluation at Killanoola Oil Project.
  • The market responded strongly to ROG’s announcement, with its share rocketing up by almost 75% post announcement.
  • The Killanoola oilfield has a depth of 850 metres and the oil is a 34° API waxy crude.

Australian hydrocarbon explorer and developer Red Sky Energy (ASX:ROG) has announced the completion of the petrophysical evaluation (an examination of physical and chemical rock properties) of Killanoola Southeast-1 (Killanoola SE-1) well, which is a part of Killanoola Oil Project in South Australia.

The market responded strongly in favour of the announcement with Red Sky's share up by a massive 75%. The company closed the date at A$0.003 cents, up 50% from the previous close.

Image source: © Ryjkov | Megapixl.com

As per the explorer, the oilfield has a strong growth outlook and based on that, ROG is working to re-evaluate the volume of oilfields. It is also working on different oil recovery techniques for long-term production at highest possible price.

The Killanoola Project

  • Started by the Killanoola-1 well in 1998, the Killanoola oilfield has a depth of 850 metres. The oil is a 34° API waxy crude.
  • It had an initial flow rate of 300 barrels per day which declined later.
  • Killanoola SE-1 was discovered in 2011. As per the petrophysical report, the second well identified 16 metres of Net Pay, over ten times more than what was estimated previously.
  • Last month, the company through its wholly owned subsidiary Red Sky Killanoola Pty Ltd, acquired the Petroleum Retention Licence 13 (PRL13) from Beach Energy Ltd (ASX:BPT).

Data source: Company update, 22 March 2021

Red Sky Energy was founded in 2001 and is headquartered in Melbourne. The company deals with exploration, development, and vital gas & oil acquisitions.

Last year, the company embarked upon the Innamincka Dome Project which include six petroleum tenements like PRL181, PRL14 (Flax oil field), PRL17 (Yarrow gas field), PRL182, PRL180, and PRL18 (Juniper oil field).

Red Sky Energy also has a 100 percent stake in Gold Nugget gas production asset in USA.

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