Red Sky Energy (ASX: ROG) expects its farm in agreement with ERM Gas (ASX: EPW) to reach financial close late this week, accelerating exploration and development of its Clarence Moreton Basin acreage.
Under the agreement, ERM Gas will pay Red Sky up to A$2.7 million upon achievement of certain milestones and will fund the drilling of at least six and up to nine wells in the New South Wales coal seam gas acreage.
ERM Gas will earn a 80% stake in PEL 478 and 60% in PEL 479 and PEL 457.
Red Sky will also place 150 million shares to ERM Gas at a share price equal to the Volume Weighted Average Price for the five days preceding the execution date of the agreement, giving ERM Gas a 9.5% stake in Red Sky.
Under the agreement, ERM Gas will pay Red Sky up to A$2.7 million upon achievement of certain milestones and will fund the drilling of at least six and up to nine wells in the New South Wales coal seam gas acreage.
ERM Gas will earn a 80% stake in PEL 478 and 60% in PEL 479 and PEL 457.
Red Sky will also place 150 million shares to ERM Gas at a share price equal to the Volume Weighted Average Price for the five days preceding the execution date of the agreement, giving ERM Gas a 9.5% stake in Red Sky.
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