Red Sky Energy Limited · ASX:ROG
Red Sky Energy — Investor Presentation (August 2011)
24 slides from Red Sky Energy's investor presentation, Aug 22, 2011
Slide 1: Red Sky Energy: Focus on value creation
For personal use only Red Sky Energy Focus on value creation Rohan Gillespie, Managing Director 22nd August g 2011
Slide 2: Red Sky's key assets
Red Sky’s key assets For personal use only • Coal seam gas in Clarence Moreton Basin: Right h to earn 100%, earned d 30% so far f Reserves independently certified (100% basis): Probable Reserves 2P 17PJ Possible Reserves 3P 380PJ Contingent g Resources 2C 629PJ • Major shallow gas discovery in Clare
Slide 3: Comparison with peers
Comparison with peers For personal use only 120 100 . Metgasco Market Capitalisation $m $ 80 60 no reserves minimal i i l 3P .... Icon Energy Exoma Energy Blue Energy . no reserves Comet Ridge 40 20 . Pl Planet Red Sky Energy G Gas
Slide 4: Recent market volatility
Recent market volatility For personal use only Peer Group: Metgasco, Blue Energy, Comet Ridge, Exoma, Icon Energy, Planet Gas Average share price ffall off p Red d Sky k Energy has Red h d Sky k 37% been over‐ sold? Share price fall of 74% Nov 2010 Aug 2011
Slide 5: Corporate Overview
Corporate Overview For personal use only Issued Capital ASX Code: ROG Shares: 1 366 million 1,366 Listed Options: 358 million (exercisable @ $0.02 by 2/9/2011) Unlisted Options: 200 million(ex @ $0.04 by 18/9/2014), 60 million(directors options) Price & Capitalisation Share Register Share price: 0.8
Slide 6: Red Sky Energy team
Red Sky Energy team For personal use only • Rohan Gillespie: Managing Director. As Vice President and Chief Operating Office, Rohan created and led BHP Billiton’s CSG business . He has extensive experience in gas commercialisation including power generation and petrochemicals. Prior roles include cr
Slide 7: Focus on Clarence Moreton Project
Focus on Clarence Moreton Project For personal use only • More flexible farm‐in agreed on 8th August with joint venture partner, Clarence Moreton Resources Pty Ltd. • Bindingg term sheet executed,, with the followingg keyy terms;; ¾ The initial 30% interest in PEL 479 and 457 can be increased to 70%
Slide 8: Clarence Moreton Project
Clarence Moreton Project For personal use only Walloon Coals Annvale 1 • Successful two core hole program – Annvale 1 and Talma 1 Talma 1 – Target Walloon coal measures – Completed in April • Reserves independently certified by MHA Petroleum Consultants (100% basis) • Probable P b bl Reserves R 2P 1
Slide 9: Major discovery at Talma well
Major discovery at Talma well For personal use only Kangaroo Creek Sandstone (KCSS) Resource • Gas spikes from KCSS while drilling Talma 1 core hole • Set casing at 480m depth ndstone • Cored lower 82m of KCSS of ~500m total thickness • DST at 545 m to 555 m depth flowed at ~28,000cfd Kangaaroo Cree
Slide 10: Geological setting
Geological setting For personal use only • Clarence Moreton Basin has been uplifted and the top 2000m eroded • Kangaroo Creek Sandstone is a bowl shaped bed in the central part of the basin • Thickness of KCSS up to 500 metres • Talma 1 and Annvale 1 were drilled in the central portion of the bed
Slide 11: Areal extent
Areal extent For personal use only Annvale 1 outcrop 30kms KCSS o Talma 1 11
Slide 12: Reservoir properties
Reservoir properties For personal use only • Attractive features: • Shallow, hence low cost development • Laterally extensive • Thick – up to 500 metres • Expect minimal water extraction during gas production • Not expected to use fraccing • Porous but tight reservoir, with porosity 10 ‐ 12% and per
Slide 13: Western Canada analogy
Western Canada analogy For personal use only • There are a number of shallow gas basins in North America, but the best analogy appears to be in southern Alberta and Saskatchewan and in central and eastern Montana. Montana • The reservoir properties are similar to those of the KCSS • Contain approxim
Slide 14: Potential producibility
Potential producibility For personal use only • The KCSS resource will flow predominantly from the high permeabilityy streaks p • Well completion needs to maximise intersection of these streaks • Field development scenario has been developed based on production wells from Canadian shallow gas • Esti
Slide 15: Forward plan
Forward plan For personal use only • Evaluate KCSS resource with pilot wells • Progress feasibility study for initial phase of power project 2011 2012 2013 Pre-feasibility Complete Talma Pilot Further Pilots and Certified Reserves Grid connection agreement Land acquisition and Planning Approval Powe
Slide 16: Resource evaluation plan
Resource evaluation plan For personal use only • Single well pilot, re‐enter Talma 1 core hole • Planned Pl d to t drill d ill the th pilot il t wellll d during i Q4 2011 (subject ( bj t to regulatory approvals which are pending) • Commence production by year end • Drill with air to avoid water cont
Slide 17: Commercialisation plan
Commercialisation plan For personal use only • Gas into power is a viable option – Significant local demand (~250MW) – Nearby high voltage electricity grid – Comparable gas pricing to that selling into LNG • Gas prices expected to rise strongly – LNG pricing linked to oil price – Likely to flow thro
Slide 18: Summerland Way Power Project
Summerland Way Power Project For personal use only Scale 1 km Casino 34kms • Pre‐feasibility study completed – Involved major engineering consultants Existing Talma 1 core hole – Grid connection study undertaken and proposed Talma – Pilot • Project configuration – Adjacent 66kV line can take 10‐ 15M
Slide 19: Yaraka Project
Yaraka Project For personal use only • ATP946 is located near the Gilmore Gas Field in the Eromanga Basin. • The main coal bearing formation in the area is the Winton Formation,, with depths p of 800m and with a likelyy thickness of 400‐600m. • Net coal accumulations are estimated to be up to 25m in
Slide 20: Fundamentals of gas in Eastern Australia
Fundamentals of gas in Eastern Australia For personal use only LNG market in Gladstone creates huge demand • Three projects committed, another likely to follow – Initial 8 trains totalling ~34mtpa of LNG – Buyers want evidence full 20 years of contracted gas is there – Requires ~55TCF of gas – Anoth
Slide 21: Significant recent news
Significant recent news For personal use only Santos acquisition of Eastern Star Gas • Underpins p CSG sector valuations • Priced at 50c per GJ of 3P reserves LNG players need more gas • Santos ESG deal • Santos deal with Beach for 750PJ gas purchase agreement ex Moomba • BG Drillsearch deal to deve
Slide 22: Key value drivers for Red Sky
Key value drivers for Red Sky For personal use only Low exploration risk Access to gas market Well located Experienced team Funded thru next phase Significant potential upside
Slide 23: Contact Details
Contact Details For personal use only Red Sky Energy Limited Level 17, 17 500 Collins Street MELBOURNE, VIC, 3000 Ph: (03) 9614 0600 F (03) 9614 0550 Fax: E: info@redskyenergy.com.au Rohan Gillespie Managing Director Mob: 0438 722 443 E: rohan.gillespie@bigpond.com 23
Slide 24: Disclaimer
Disclaimer For personal use only The information presented herein contains predictions, estimates and other forward looking statements that are subject to risk factors that are associated with the oil and gas business. Certain information in this presentation has been derived from third parties and,