By acquiring a further 22.5% working interest, Redfork has lifted working interest in the project to 100% (80% net revenue interest).

In addition, Redfork will acquire the right to operate the project and will take control and ownership of the project infrastructure, including the gas gathering system, tank battery, pipelines, laterals, connections, meters, taps and related equipment.

The total consideration for this acquisition is $US1.8 million ($A2.4 million).

Redfork said it expected the payback on this acquisition to be about 12 months, based on current estimates of production potential from its 15 existing work-over wells and assuming the successful drilling and completion of the initial eight-well program.

This acquisition will be funded in part through a capital raising of $A1.32 million (before costs) via a placement of 6 million shares at 22c each to a large overseas fund, with the balance of the purchase consideration coming from existing cash reserves.

Redfork now has several wells producing oil and gas, with initial production coming from only existing open zones.

The next phase of the planned development program to access “behind pipe” zones is now underway.

“Successful completion of these zones, which are known to produce oil and gas, is expected to result in a substantial increase in production,” the company said.

Redfork also plans to shortly begin a CBM drilling program.

“The company has a very clear and simple goal – to build significant CBM gas-in-place reserves on its leases,” it said.