Red Sky Energy Limited has chosen its preferred well locations and is in the process of securing land owner consents for the upcoming PEL 467 well.

PEL 467 is held 100% by Red Sky and is situated in northern New South Wales within the Surat Basin.

The Sandy Camp petroleum well drilled by others within the permit showed net coal thickness of approximately 7 metres. Based on this well and other data, the expected average net coal thickness across the permit is 4 to 5 metres.

A number of gassy water bores are located within the permit, which is an indicator for coal seam gas.

As the coal occurs down to a depth of 400 metres, the gas, if present, is likely to be biogenic in origin.

Given the permit is approximately 10,000km2 in area, this could represent a sizeable gas resource.

The expected cost of the well is $700,000. The Company has approximately $5.3m cash in the bank, after accounting for the cost of the Romona #1 well and cash calls made to date by Central Petroleum as part of the Broadacre Farm in.

Tags: Red Sky Energy Limited