Red Sky Energy Adds Fourth Gas Work Front at Cooper Basin for Just $600K Net
Key Takeaways
- Red Sky Energy has elected to participate in the Yarrow North 1 in-wellbore re-entry, targeting best-estimate gross raw gas volumes of 0.52 Bcf at an initial rate of 2.1 MMscf/d, with Red Sky's net cost approximately A$0.60 million at its 20% working interest.
- The operator estimates 80% confidence that Yarrow North 1 volumes are compartmentalised and separate from gas already being drained by Yarrow 1, meaning the targeted volumes are genuinely incremental.
- Yarrow North 1 has been cased and suspended since March 2008 without ever producing — the existing wellbore and Santos-operated Yarrow 1 flowline infrastructure are already in place, compressing both cost and timeline to first gas.
- The re-entry adds a fourth active work front to Red Sky's 2026 Innamincka Dome campaign alongside Yarrow 4, Yarrow 5, and the Willowie appraisal well, with first gas targeted in early 2027.
- The opportunity is not yet in the approved JV budget and remains subject to supplementary budget approval and a JV Authority for Expenditure vote before work can proceed.
Red Sky adds Yarrow North 1 re-entry to growing Innamincka Dome work program
Red Sky Energy (ASX: ROG) has elected to participate in the Yarrow North 1 in-wellbore (IWB) re-entry opportunity within the producing Yarrow gas field, Cooper Basin, South Australia. The proposed program targets gross incremental raw gas volumes of 0.52 Bcf (operator best estimate) at an initial rate of 2.1 MMscf/d, with Red Sky’s net cost approximately A$0.60 million (representing its 20% working interest share of a gross project cost of approximately A$2.98 million).
Yarrow North 1 is a separate opportunity, running alongside the Yarrow 4 and Yarrow 5 wells already underway in the current drilling program. First gas is targeted in early 2027, subject to Joint Venture approval and operational scheduling.
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What makes Yarrow North 1 compelling
A suspended well, a proven formation
Yarrow North 1 was drilled as an exploration well, then cased and suspended in March 2008 without ever producing gas. The proposed program will perforate and hydraulically stimulate the Tirrawarra Sandstone in the existing wellbore before tying it into the existing Yarrow 1 flowline, establishing a new drainage point in the field.
The compartmentalisation case is a key part of the technical rationale. The operator estimates 80% confidence that Yarrow North 1 volumes are separate from gas already being drained by Yarrow 1, meaning the targeted volumes are genuinely incremental rather than a reallocation of gas already being produced. Both Yarrow 1 and Yarrow 3 have produced from the Tirrawarra Sandstone since coming online, which underpins the technical case for this opportunity.
Volume and rate estimates at a glance
| Scenario | Gross Raw Gas (Bcf) | Initial Rate (MMscf/d) | Red Sky Net Share @ 20% |
|---|---|---|---|
| Low | 0.24 Bcf | 0.9 MMscf/d | Not disclosed |
| Best | 0.52 Bcf | 2.1 MMscf/d | ~0.10 Bcf |
| High | 0.89 Bcf | 3.2 MMscf/d | Not disclosed |
Raw gas volumes include approximately 11% CO₂, so sales gas volumes will be lower than the figures above. These are operator-prepared estimates and are not being booked as Reserves by Red Sky at this stage. Any recognition of Reserves or Resources will follow Joint Venture approval and Red Sky’s normal reserves reporting process.
Andrew Knox, Managing Director
“Yarrow North 1 is a low-cost way to bring an idle cased and suspended well into production… The gas is incremental. No existing or planned Yarrow well is expected to access this part of the field. Using this existing wellbore and Santos-operated infrastructure already in place should keep our net capital exposure down and shorten the time to first gas. This is exactly the type of disciplined near-field work we intend to pursue in a proven part of the Cooper Basin.”
Understanding well re-entries and why they matter for investors
A well re-entry, or in-wellbore (IWB) workover, involves reopening an existing drilled wellbore and modifying it to produce from a formation it never previously tapped, rather than drilling an entirely new well from scratch. The Yarrow North 1 wellbore already exists and has been in place since 2008, which means the most time-consuming and expensive part of the process — getting a hole in the ground — is already done.
The capital efficiency is the investor-relevant point here. Because the wellbore already exists and the Yarrow 1 flowline infrastructure is already in place, costs and timelines are compressed compared to a greenfield well. For Red Sky, that translates to a net capital exposure of approximately A$0.60 million to target a best-estimate 0.10 Bcf net share of incremental raw gas — a more favourable risk/reward profile than a new well would typically offer if the stimulation is successful.
It is worth noting that the opportunity is not currently in the approved Joint Venture budget and remains subject to a supplementary budget approval and a JV Authority for Expenditure (AFE) vote. Yarrow North 1 has been suspended since 2008, and its downhole condition is not fully confirmed — the pre-frac workover scope includes wellbore integrity checks, a cement bond log, and pressure testing before any stimulation proceeds.
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Part of a bigger picture at Innamincka Dome
Red Sky holds a 20% working interest in PRL 17 (and five other PRLs: 14, 18, 180, 181, and 182) within the Santos (ASX: STO)-operated Innamincka Dome Joint Venture. Yarrow 1 and Yarrow 3 are currently producing gas into the Santos-operated gathering system, with the Innamincka Dome connecting directly to the Moomba facility via established gas-gathering, pipeline, and processing infrastructure.
The broader active campaign has been building throughout 2026. Binding AFEs were signed for Yarrow 4 and Yarrow 5 (announced April 2026) and the Willowie appraisal well (announced April 2026), with site preparation commencing at the Yarrow gas field in June 2026. Yarrow North 1 now adds a fourth work front to that campaign. The four active work fronts are:
- Yarrow 4 — new directional well, dual-well pad
- Yarrow 5 — new directional well, same dual-well pad
- Willowie appraisal well — PRL 18, targeting Patchawarra and Tirrawarra formations
- Yarrow North 1 — IWB re-entry, scheduled to be executed concurrently with Yarrow 4 and Yarrow 5
Yarrow North 1 adds a fourth work front to an already active campaign at a modest incremental net cost, with first gas targeted in the early 2027 window, subject to Joint Venture approval and operational scheduling.
Red Sky Energy drilling programme at Killanoola represents a separate active front in the company’s broader 2026 operational push, with the Innamincka Dome campaign now running alongside field activity at other assets in the portfolio.
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