Red Sky Energy advised the seismic survey has commenced at Killanoola. Red Sky had been discussing seismic acquisition with affected landowners for some time and is pleased to advise that all discussions were most satisfactory and landowner agreements have all now been concluded. The Company wishes to thank those landowners for their understanding and assistance.

As previously announced in the recent Quarterly Report, an additional associated activity license has been granted surrounding the PRL13 licence, AAL295, to allow the seismic acquisition to exceed the licence limits by approximately 5km2, to better facilitate and improve the imaging. Santos Ltd. (Santos) have recently updated and advised Red Sky that due to the recent extreme wet weather in South Australia, the current drilling forecast has been pushed out and does not indicate the rig moving to Yarrow as re-scheduled. The rig and its crew had been put on standby and was ready to be deployed to Yarrow subject to improved weather conditions.

Santos have made the decision to move the rig to another accessible well location due to the current and forecast weather impact on access roads to the Yarrow drilling location. Red Sky will update all shareholders once it receives an update on rig availability and the rescheduled drilling commencement date. Red Sky is free carried through the drilling of this well.

Yarrow has previously been estimated to have a 2C contingent resource of 18BCF. A further 20BCF 2C of associated gas is estimated at the Flax oil field 8km to the southeast of Yarrow. A pipeline of approximately 20km would potentially be built to tie into the grid at Napowie to the south of the Yarrow gas field.

The pipeline is expected to have a gross capacity of 20mmcfpd (4mmcfpd net to Red Sky).