The Australian oil and gas company is preparing to begin production activities at the Killanoola DW1 well immediately and plans to mobilise contractors to the site, after receiving approval from South Australia’s Department for Energy and Mining (DEM)
Australian oil and gas company Red Sky Energy has secured government approval to commence production from the existing pay zone at the DW1 well in the Killanoola oil project.
Red Sky gets nod to begin production from Killanoola DW1 well. (Credit: WORKSITE Ltd. on Unsplash)
The South Australia’s Department for Energy and Mining (DEM) has granted the approval.
The oil and gas company is preparing to begin production activities immediately, with plans to mobilise contractors to the project site.
Earlier this year, Red Sky signed an agreement with Viva Energy Australia to purchase all crude produced from the Killanoola oil field project, subject to quality specifications.
It will deliver the crude oil to Viva Energy’s Geelong refinery, which is located to the southeast of the Killanoola Project, within four hours by road tanker.
Furthermore, the crude produced at the Killanoola Project will be benchmarked against dated Brent for pricing, said the Australian company.
Red Sky managing director Andrew Knox said: “The Red Sky team is pleased to have received government approval to commence production at DW-1. We continue to push to extract full value from the resources at Killanoola as soon as possible.”
The Killanoola oilfield, located in South Australia’s onshore Otway Basin, was discovered by the Killanoola-1 well in 1998 and was acquired by Red Sky in February 2021, from Beach Energy.
Red Sky’s independent petrophysical report on the Killanoola-1DW-1 well found 37m of additional oil-bearing pay zones within the 149m thick Sawpit Sandstone.
The Australian company recently completed the acquisition of the 3D seismic survey at Killanoola, on schedule and with minimal downtime, in March last year.
It has secured an additional associated activity license (AAL295), for activity surrounding the PRL13 licence, which holds the Killanoola project.
The AAL295 licence allows Red Sky to conduct seismic acquisition to exceed the licence limits by nearly a 5km2 to better facilitate and improve the imaging.
The seismic survey is expected to help unlock additional resources and planning for the full-field development of the Killanoola oil project.
Furthermore, the company has started works related to contracting a rig and the wireline perforation of the additional zones of interest identified at both DW1 and SE1.