- 01Red Sky to re-enter Yarrow North 1 in Innamincka.
- 0220% stake; net ~A$0.60m; capex ~A$2.98m.
- 03First gas targeted early 2027; not booked as reserves yet.
Red Sky Energy (ASX: ROG) will participate in the proposed re-entry and workover of the suspended Yarrow North 1 well in South Australia’s producing Yarrow gas field, adding another opportunity alongside its current Innamincka Dome drilling program.
Santos (ASX: STO) estimates the well could recover gross incremental raw gas of 0.52 billion cubic feet (Bcf) at an initial rate of 2.1 million standard cubic feet per day (MMscf/d), with Red Sky’s 20% working interest equating to about 0.10Bcf.
The gross project cost is estimated at approximately A$2.98 million, leaving Red Sky with a 20% share of about A$0.60m, while first gas is targeted for early 2027 subject to joint venture approval and operational scheduling.
Yarrow North 1 is separate from the Yarrow 4 and Yarrow 5 wells already included in the current program and is intended to create a new drainage point in part of the field not expected to be accessed by existing or planned wells.
Existing Low-Cost Well
Yarrow North 1 was drilled as an exploration well and cased and suspended in March 2008, but has never produced gas.
The proposed program will perforate and hydraulically stimulate the Tirrawarra Sandstone before connecting the well to the existing Yarrow 1 flowline through a new gas metering skid and a flowline approximately 950 metres long.
Before stimulation proceeds, the planned pre-frac workover will include wellbore integrity checks, a cement bond log, and pressure testing because the condition of the suspended well is not fully confirmed.
“Yarrow North 1 is a low-cost way to bring an idle cased and suspended well into production,” managing director Andrew Knox said.
“Using this existing wellbore and Santos-operated infrastructure already in place should keep our net capital exposure down and shorten the time to first gas—this is exactly the type of disciplined near-field work we intend to pursue in a proven part of the Cooper Basin.”
Incremental Gas Target
The operator’s estimate ranges from 0.24Bcf to 0.89Bcf of gross raw gas, with an initial production-rate range of 0.9MMscf/d to 3.2MMscf/d and an estimated economic well life of about 21 months.
Raw gas volumes include approximately 11% carbon dioxide, meaning sales gas volumes would be lower than the raw gas figures.
Santos assigns an 80% confidence that the Yarrow North 1 volume is compartmentalised from Yarrow 1, supporting the view that production would be incremental rather than gas already being drained by existing Yarrow wells.
Red Sky is not booking the volumes as Reserves at this stage, with any future recognition of Reserves or Resources to follow joint venture approval and its normal reserves reporting process.
Innamincka Program Continues
Yarrow North 1 sits within the same producing field as Yarrow 1 and Yarrow 3, which have both produced from the Tirrawarra Sandstone and underpin the technical case for the re-entry.
The work is scheduled to be executed alongside Yarrow 4 and Yarrow 5, for which Red Sky has already signed binding Authorities for Expenditure with Santos, together with a separate authority covering the Willowie appraisal well.
Red Sky holds a 20% working interest across six licences in the Santos-operated Innamincka Dome joint venture, where established gas gathering, pipeline and processing infrastructure connects to the Moomba facility.
The Yarrow North opportunity remains outside the approved joint venture budget and requires supplementary budget approval and a vote before execution can proceed.
Get the wire before the market opens.
The ASX small-cap stories that matter, filed before 9am AEST. Curated by the Small Caps desk.