Highlights
- Red Sky awarded a 35% interest in Block 6/24 offshore Angola in the Kwanza Basin
- Block 6/24 has an aerial size of 4,930km2and is covered by 1,531km2 of 2D seismic and 1,465km2 of 3D seismic
- Following Red Sky’s assessment of the materials contained in the data room for Block 6/24, the Company estimates that there is significant potential for oil to be found in Block 6/24
- The Company’s review and analysis of all data available also indicates that 9 wells have been drilled in Block 6/24, with one of the wells discovering the Cegonha oil field. Preliminary assessments indicate a potential commercial discovery. Geological and Geophysical studies are now being initiated to firm up the resources of this discovery
- Block 6/24 is located in an area with several oil discoveries and high prospectivity
Red Sky Energy (ROG: ASX) (Red Sky or the Company) is pleased to advise that the Angolan National Agency for Oil, Gas and Biofuels (ANPG) and Red Sky signed a Risk Service Contract (RSC) on 31 December 2024 for offshore Block 6/24 in partnership with ACREP Exploração Petrolífera SA (ACREP) and Sonangol Exploracao e Produção SA (Sonangol E&P). The RSC for offshore Block 6/24 is the result of direct negotiations undertaken by Red Sky with ANPG.
Red Sky Managing Director, Andrew Knox, commented: "Over the past few years, Red Sky has been evaluating opportunities to acquire producing or near-production assets. The company is actively pursuing prospects created by major energy companies' global shift away from fossil fuels.
The signing of the RSC Block 6/24 marks our first entry into Angola and is a transformational milestone for Red Sky. Block 6/24 contains a potential commercial oil discovery that the JV partners plan to evaluate for early production and cash flow generation. The Block also has substantial resource potential based on the existing 2D and 3D seismic data. The JV partners plan to prove up these resources, further improving the economics of the Block. Several parties have expressed interest in providing 100% project finance for the development.
This transaction enhances our asset base with a high prospectivity offshore block and provides substantial diversification benefits, complementing our Innamincka gas and Killanoola oil projects in South Australia. This strategic move positions Red Sky for sustained growth and stability by balancing our investment portfolio across different geographical regions and resource types.”
Block 6/24 Ownership and Location
- Sonangol E&P is the operator of the Block with a 50% participating interest. Red Sky Energy will hold a 35% participating interest, and ACREP will hold the remaining 15% participating interest.
- Block 6/24 is located 12 kilometres offshore Angola in the Kwanza Basin, in water depths ranging from 70 to 80 metres. The Block is covered by 1,531km2 of 2D seismic and 1,465 km2 of 3D seismic.
Figure 1: Block 6/24 Location
Red Sky was granted access to a data room by the Angolan National Agency for Oil, Gas and Biofuels (ANPG) during the direct negotiation process. As a result of its review of the materials in that data room, the Company estimates that there is significant potential for oil to be found in Block 6/24. In addition, the Block contains the Cegonha oil discovery, and further studies are to be undertaken to determine the commerciality of that discovery.
Next Steps
The immediate next steps following the signing of the Risk Service Contract (RSC) include:
- Implementation of a Joint Venture Operating Agreement (JVOA): Formalising roles, responsibilities, and operational frameworks among the JV partners.
- Parliamentary Ratification: Approval of the RSC by the Angolan Parliament, expected within approximately 90 days.
- Execution of Geological & Geophysical (G&G) Studies: Over the first three years, focusing on seismic reprocessing and detailed subsurface evaluation.
- Optional Well Decision: A decision on drilling an optional well in Year 4, contingent on the results of initial studies.
Angola Context
In recent years, Angola has made significant strides to create a more favourable environment for foreign investment, particularly in the oil and gas sector. The country has implemented regulatory reforms to streamline the process for foreign investors, making it easier to do business in the country. This includes the establishment of the Angolan National Agency for Oil, Gas and Biofuels (ANPG) to oversee the oil and gas sector.
Angola is investing in infrastructure development, which supports the operations of foreign companies, particularly in the oil and gas industry. It has also been actively seeking and establishing strategic partnerships with foreign companies to further develop its natural resources and maximise their value.
Relative stability, in conjunction with security and an attractive exploration and production landscape, provides the country with the edge over regional peers. While challenges remain, Angola is generally considered friendly to foreign investment, particularly in sectors like oil and gas, where it seeks to leverage foreign expertise and capital to develop its resources.
Figure 2: Angola location map with the approximate location of Block 6/24
Next Steps
The immediate next steps following the signing of the Risk Service Contract (RSC) include:
- Implementation of a Joint Venture Operating Agreement (JVOA): Formalising roles, responsibilities, and operational frameworks among the JV partners.
- Parliamentary Ratification: Approval of the RSC by the Angolan Parliament, expected within approximately 90 days.
- Execution of Geological & Geophysical (G&G) Studies: Over the first three years, focusing on seismic reprocessing and detailed subsurface evaluation.
- Optional Well Decision: A decision on drilling an optional well in Year 4, contingent on the results of initial studies.
Link to ASX Announcement: Red Sky Energy Signs Landmark Contract For Block 6/24, Offshore Angola
For further information on the Company and our projects, please visit:
Contact details:
Andrew Knox
Managing Director
+61 407 356 557
[email protected]
Mark Flynn
Investor Relations
+61 416 068 733
[email protected]