Red Sky Energy provided an update post the completion of the drilling of and receipt of results for the Yarrow 3 well at the Innamincka Dome licenses (Innamincka). Red Sky holds 20% working interest in six PRLs (14, 17, 18, 180, 181, 182) at the Innamincka Dome in the Cooper Basin. Santos Limited previously advised their drilling operations at Yarrow 3 well in PRL17 in the Cooper Basin were an operational success, with no incidents.

Preliminary wireline log evaluation indicated gas was encountered in the Tirrawarra sandstone and the Patchawarra formation. Santos have informed Red Sky that they intend to expedite operations at Yarrow 3. The well will undergo a two stage fraccing operation, followed by a flowback. The well performance during the flowback period will be closely monitored to assess completion as a future producer.

Operations to frac and flowback Yarrow 3 may begin late October, subject to weather constraints. Post this expedited operation, on success, the next steps would be to bring a rig back and frac Yarrow 1. If this activity proved positive both Yarrow 3 and Yarrow 1 would be completed and a pipeline of approximately 18km would potentially be built to tie into the grid at Napowie to the south of the Yarrow gas field. This is turn could be potentially followed by 3D seismic to interpret where to site further development wells.

Yarrow has 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 south east of Yarrow. Yarrow 3 is an appraisal gas well which targeted the Tirrawarra sandstone as primary objective and the Patchawarra formation as secondary objective.