Red Sky Energy (ASX: ROG) has signed a landmark Risk Service Contract (RSC) for offshore Block 6/24 in Angola’s Kwanza Basin, marking a significant milestone in the company’s expansion strategy.
The deal, finalised on December 31, 2024, grants Red Sky a 35 per cent participating interest in the block, alongside partners Sonangol Exploracao e Produção SA (50 per cent) and ACREP Exploração Petrolífera SA (15 per cent).
Block 6/24, spanning 4,930 square kilometres, is situated 12 kilometres offshore Angola in water depths of 70-80 metres.
The block boasts extensive seismic coverage, including 1,531 square kilometres of 2D seismic and 1,465 square kilometres of 3D seismic data.
Red Sky’s Managing Director, Andrew Knox, highlighted the strategic importance of this acquisition: “The signing of the RSC Block 6/24 marks our first entry into Angola and is a transformational milestone for Red Sky.
“Block 6/24 contains a potential commercial oil discovery that the JV partners plan to evaluate for early production and cash flow generation.”
Key aspects of the deal include:
- Significant resource potential based on existing seismic data.
- The presence of the Cegonha oil discovery, which requires further evaluation for commerciality.
- Nine previously drilled wells in the block, with one resulting in the Cegonha discovery.
The next steps for the project involve:
- Implementing a Joint Venture Operating Agreement.
- Obtaining approval from the Angolan Parliament within 90 days.
- Conducting geological and geophysical studies over the next three years.
This acquisition aligns with Angola’s recent efforts to attract foreign investment in its oil and gas sector.
The country has implemented regulatory reforms and established the Angolan National Agency for Oil, Gas and Biofuels (ANPG) to oversee the industry.
Red Sky’s entry into Angola diversifies its portfolio, complementing its existing projects in South Australia.
The company is actively pursuing opportunities created by major energy companies’ shift away from fossil fuels.
As the project progresses, Red Sky and its partners will focus on proving up the block’s resources and evaluating the potential for early production, with several parties expressing interest in providing full project financing for development.
