Highlights

  • Red Sky Energy will participate in the Yarrow North 1 (IWB) opportunity, a re-entry of an existing well cased and suspended since 2008 in the producing Yarrow gas field, separate from the current Yarrow 4 and Yarrow 5 drilling program.
  • The program targets gross incremental gas volumes of 0.52 Bcf (operator best estimate) at an initial rate of 2.1 MMscf/d, with Red Sky's 20% net share approximately 0.10 Bcf.
  • Gross project cost is estimated at approximately A$2.98 million, with Red Sky's 20% net share approximately A$0.60 million, subject to Joint Venture budget approval and an AFE vote.
  • The well will be tied into existing Yarrow 1 infrastructure, with work scheduled alongside the Yarrow 4 and Yarrow 5 wells and first gas targeted in early 2027.

Red Sky Energy Limited (ASX:ROG) has advised that it will participate in the Yarrow North 1 in-wellbore (IWB) opportunity, a proposed re-entry and workover of an existing suspended well within the producing Yarrow gas field, operated by Santos Limited (ASX:STO). The opportunity is separate from the Yarrow 4 and Yarrow 5 wells currently being drilled under the Innamincka Dome program.

A Low-Cost Path to Incremental Gas

Yarrow North 1 was originally drilled as an exploration well and was cased and suspended in March 2008, having never produced gas. The proposed program will perforate and hydraulically stimulate the Tirrawarra Sandstone before tying the well into the existing Yarrow 1 flowline, establishing a new drainage point in a portion of the field not expected to be accessed by any existing or planned well. Red Sky Managing Director Andrew Knox said the opportunity represented a low-cost way to bring an idle wellbore into production, noting that using existing Santos-operated infrastructure should keep net Capital exposure down and shorten the time to first gas.

Technical Case and Project Economics

The operator's technical evaluation estimates gross incremental gas volumes of 0.52 Bcf of raw gas (best estimate) at an initial rate of 2.1 MMscf/d on a 100% basis, with Red Sky's 20% net share approximately 0.10 Bcf. The operator's estimates range from 0.24 Bcf (low) to 0.89 Bcf (high) on a gross basis, with an 80% confidence that the Yarrow North 1 Volume is compartmentalised from Yarrow 1, meaning recovered gas is expected to be incremental rather than a re-allocation of gas already being drained by existing wells. These volumes are operator-prepared estimates and are not currently being booked as Reserves by Red Sky. The proposed work scope comprises a pre-frac workover, single-stage hydraulic stimulation of the Tirrawarra Sandstone, and surface tie-in works including a new gas metering skid and an approximately 950 metre flowline to existing Yarrow 1 facilities. Gross project cost is estimated at approximately A$2.98 million, with Red Sky's 20% net share approximately A$0.6 million, subject to supplementary Joint Venture budget approval and an Authority for Expenditure vote.

Part of a Broader Innamincka Dome Campaign

Yarrow North 1 sits within the producing Yarrow gas field, where nearby wells Yarrow 1 and Yarrow 3 have both produced from the Tirrawarra Sandstone since coming online, underpinning the technical case for the opportunity. Red Sky holds a 20% working interest across six PRLs within the Santos-operated Innamincka Dome Joint Venture, with the Yarrow field located within PRL 17. The Yarrow North 1 work is scheduled to be executed concurrently with the Yarrow 4 and Yarrow 5 wells, following Red Sky's binding Authorities for Expenditure with Santos for that two-well program and the Willowie appraisal well, announced in April 2026.

Conclusion

The Yarrow North 1 re-entry represents a disciplined, low-cost addition to Red Sky Energy's near-field work program in the Cooper Basin, leveraging existing Santos-operated infrastructure to bring incremental gas volumes online without significant new capital outlay. With first gas targeted for early 2027 alongside the broader Yarrow and Willowie drilling campaign, the opportunity remains subject to Joint Venture approval and operational scheduling, and investors should note that reported gas volumes are operator estimates not yet booked as Reserves.