Red Sky Energy Secures Landmark Contract for Block 6/24 Offshore Angola

Key Highlights

• Red Sky Energy (ASX: ROG) awarded a 35% stake in Block 6/24, spanning 4,930 km² in the Kwanza Basin, Angola.
• The block includes extensive seismic data: 1,531 km² of 2D and 1,465 km² of 3D coverage.
• Preliminary studies indicate significant oil potential, including the Cegonha oil field discovery.
• Collaboration with Sonangol E&P and ACREP under a Risk Service Contract (RSC).

Introduction

Red Sky Energy (ASX: ROG) has taken a transformative step in its growth strategy by signing a Risk Service Contract (RSC) for Block 6/24, located offshore Angola in the Kwanza Basin. This agreement, executed with the Angolan National Agency for Oil, Gas, and Biofuels (ANPG), marks a strategic milestone for the company, unlocking potential in one of the world's most promising hydrocarbon regions.

Block 6/24: A Strategic Asset in Angola’s Oil Landscape

Block 6/24 is situated 12 kilometers offshore Angola in the prolific Kwanza Basin, an area renowned for its high prospectivity and numerous oil discoveries. With water depths ranging from 70 to 80 meters, the block is covered by significant seismic data, including:

• 1,531 km² of 2D seismic coverage
• 1,465 km² of 3D seismic coverage

Red Sky’s (ASX: ROG) analysis of the data suggests substantial oil potential, including the previously identified Cegonha oil field. This discovery, supported by nine drilled wells, highlights the block's promising commercial viability.

Ownership Structure and Collaboration

Block 6/24 will be jointly operated by three key stakeholders:

• Sonangol E&P (50%): Angola’s state oil company serves as the operator, ensuring alignment with national energy goals.
• Red Sky Energy (35%): As the second-largest stakeholder, Red Sky Energy (ASX: ROG) brings expertise in geological and geophysical studies.
• ACREP (15%): A regional partner contributing local insights and operational support.

This collaborative structure positions Red Sky Energy (ASX: ROG)  to leverage local expertise while maintaining a significant influence over exploration and development decisions.

Next Steps: Laying the Foundation for Exploration

Following the RSC signing, Red Sky Energy (ASX: ROG) has outlined a clear roadmap to realize the potential of Block 6/24:

Joint Venture Operating Agreement (JVOA)

Defining roles, responsibilities, and operational frameworks among the joint venture partners.

Parliamentary Ratification

Seeking approval of the RSC by the Angolan Parliament, anticipated within 90 days.

Geological and Geophysical (G&G) Studies

Over the next three years, focusing on reprocessing seismic data and conducting subsurface evaluations to firm up resource estimates.

Optional Well Decision

Based on the results of initial studies, a decision on drilling an exploratory well in Year 4 will be made. These structured steps ensure a thorough evaluation of Block 6/24’s potential while aligning with industry best practices.

Significance of the Cegonha Oil Discovery

The Cegonha oil field, discovered in one of the nine wells drilled within Block 6/24, is a standout feature of this contract. Preliminary assessments suggest that the discovery has commercial potential, making it a focal point for ongoing studies.

Geological and geophysical evaluations will aim to validate this potential, paving the way for development decisions that could significantly enhance Red Sky Energy’s (ASX: ROG) resource base.

Why Angola’s Kwanza Basin Matters

The Kwanza Basin is a well-established oil province, hosting numerous discoveries and ongoing production activities. Its proximity to existing infrastructure and favorable geological conditions make it a prime target for exploration and development.

Red Sky Energy’s (ASX: ROG) entry into this region aligns with the company’s strategy to invest in high-potential blocks with a balanced risk-reward profile.

By partnering with established entities like Sonangol E&P and ACREP, Red Sky Energy (ASX: ROG) mitigates operational risks while benefiting from shared expertise. This partnership enhances the joint venture’s ability to navigate regulatory requirements and operational challenges effectively.

Broader Implications for Red Sky Energy

This contract signals a strategic pivot for Red Sky Energy (ASX: ROG), expanding its portfolio into offshore exploration and positioning the company for long-term growth.

Key benefits include:

• Resource Expansion: Potential to significantly increase Red Sky Energy’s (ASX: ROG) reserves.
• Revenue Growth: Commercializing discoveries like the Cegonha oil field could provide a substantial revenue stream.
• Enhanced Market Position: Strengthening Red Sky Energy’s (ASX: ROG) reputation as a serious player in the international energy market.

Looking Ahead

Red Sky Energy’s (ASX: ROG) acquisition of a 35% interest in Block 6/24 represents a landmark achievement, underpinned by strong partnerships and promising geological data. As the company embarks on this ambitious exploration journey, its structured approach and focus on collaboration are likely to yield substantial rewards.

This move not only enhances Red Sky Energy’s  portfolio but also underscores its commitment to creating value for shareholders through strategic investments in high-potential assets.