Red Sky Energy (ASX: ROG) will accelerate exploration and development of its gas acreage in the Clarence Moreton Basin, New South Wales, after reaching a farm in agreement with ERM Power (ASX: EPW).
Under the agreement, ERM Gas, a wholly owned subsidiary of ERM Power, will fund up to 9 wells across three permits and pay Red Sky up to A$2.7 million on achievement of milestones.
ERM will also act as the operator for the permits.
In return, Red Sky will place 150 million shares to an ERM entity, giving ERM a 9.5% interest in the company.
“This is an important step forward for the company. We have spent a lot of money and effort on our Clarence Moreton permits and it is pleasing to see a company of the calibre and standing of ERM Gas place a significant value on them,” Red Sky managing director Rohan Gillespie said.
Farm-in agreement
ERM Gas will initially be assigned a 10% interest in PEL 479 and PEL 457 by paying Red Sky A$700,000, leaving Red Sky with a 20% interest in the 2 permits.
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Under the agreement, ERM Gas, a wholly owned subsidiary of ERM Power, will fund up to 9 wells across three permits and pay Red Sky up to A$2.7 million on achievement of milestones.
ERM will also act as the operator for the permits.
In return, Red Sky will place 150 million shares to an ERM entity, giving ERM a 9.5% interest in the company.
“This is an important step forward for the company. We have spent a lot of money and effort on our Clarence Moreton permits and it is pleasing to see a company of the calibre and standing of ERM Gas place a significant value on them,” Red Sky managing director Rohan Gillespie said.
Farm-in agreement
ERM Gas will initially be assigned a 10% interest in PEL 479 and PEL 457 by paying Red Sky A$700,000, leaving Red Sky with a 20% interest in the 2 permits.
Read More
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