Great Artesian told the ASX this morning that Red Sky had agreed to fully fund and conduct an airborne geological survey over the two permits to high-grade the selection of drilling targets. Results from the survey are expected in the third quarter.
Red Sky has the exclusive Australian rights to ‘Sky Hunter Airborne Geochemical Microseep Survey Technology,’ which is designed to detect minute traces of hydrocarbons that naturally seep from underground accumulations into the atmosphere.
The company has successfully used this as an exploration tool to high-grade the selection of seismically defined drilling targets in Canada.
This will be the first extensive geochemical survey undertaken in this portion of the Cooper Basin.
After the survey is complete and subject to certain conditions, Red Sky will then fund 60% of the cost to drill up to three explorations wells, with the first to be selected and funded before the end of this year.
Once it has funded three wells, the company will earn a 20% participating interest in the so-called Red Sky Farmin Block, a mutually agreed area covering up to one-third of PEL 91 located within the airborne geochemical survey area.
Great Artesian managing director Dr Ray Shaw said that the western margin of the Patchawarra Trough, which encompasses PEL 91 and 92, is considered to be an attractive oil fairway, following recent discoveries in the Sellicks and Christies oil field.
“But it’s one in which exploration success has been hampered by the relatively subtle nature of the traps and sparse seismic control,” Shaw said.
“Red Sky believes that its technology will improve its hydrocarbon finding ratio and lower exploration and drilling costs in the longer term.”
Currently Great Artesian has a 60% interest in PEL 91, which is operated by Beach Petroleum Limited holding the remaining 40%.