Red Sky signs a contract for offshore exploration in Block 6/24 in Angola

The oil and gas company Red Sky Energy, together with the Angola National Agency for Oil, Gas and Biofuels (ANPG), ACREP Exploração Petrolífero (ACREP) and Sonangol Exploração e Produção (Sonangol E&P), has signed the Risk Service Contract (RSC) for the exploration and development of offshore block No. 6/24. .

Area 6/24 is located 12 km offshore Angola in the Kwanza Basin, and covers an area of ​​1,531 km2 of 2D seismic data and 1,465 km2 of 3D seismic data.

The block is located in water depths ranging from 70 meters to 80 meters and includes the Segunha oil discovery.

Red Sky, which has a 35% participating interest, has identified “significant potential” for oil in the area after a comprehensive review of material in the ANPG data room.

RSC, a direct result of negotiations between Red Sky and ANPG, sees Sonangol E&P as the operator with a 50% stake, while ACREP owns the remaining 15%.

ANPG retains ownership of all hydrocarbons produced.

The immediate next steps for the contract include executing a joint venture operating agreement, seeking parliamentary ratification within approximately 90 days, and carrying out geological and geophysical studies over the first three years.

Andrew Knox, Managing Director of Red Sky, said: “The signing of RSC Block 6/24 represents our first entry into Angola and marks a turning point for Red Sky. Block 6/24 contains a potential commercial oil discovery that the joint venture partners plan to evaluate for early production And generate cash flow.

“The area also has significant resource potential based on existing 2D and 3D seismic data. The joint venture partners plan to demonstrate these resources, further improving the economics of the block. Several parties have expressed interest in providing 100% project financing for development.

The RSC framework allows Red Sky, ACREP and Sonangol E&P to assume exploration, development and production risks in Block 6/24, while recovering costs and a share of profits from the sale of hydrocarbons.

The contract stipulates an exploration and evaluation period of six years, extendable for 30 years upon commercial discovery.

Contractors are committed to undertaking specified geological, geophysical and drilling activities, with the option to withdraw without penalty if they choose not to proceed to year four.

Red Sky expects multiple benefits from RSC, including potential cash flow from the Cegonha oil field, resource expansion through additional seismic potential, an enhanced market position, and long-term growth from increased reserves and production capabilities.

“This transaction strengthens our asset base with a highly prospective offshore block, provides significant diversification benefits, and complements our Innaminka gas and Kelanula oil projects in South Australia,” Knox added. “This strategic move positions Red Sky for sustainable growth and stability by balancing our investment portfolio.” Across different geographies and resource types.

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