Drillsearch and Red Sky Energy have formalized the arrangements between them regarding the previous monies deposited by Red Sky with Great Artesian Oil and Gas Limited (a Drillsearch subsidiary) for exploration work pursuant to a Farm-in Agreement dated May 30, 2006.
Under the 2006 Farm-in Agreement, Red Sky deposited $1 million with Great Artesian for the opportunity to potentially participate in drilling of
However the parties have agreed that if the Planet Downs-1 well, about to be spudded by Drillsearch in ATP 539P, results in a Discovery, Red Sky will earn up to a 25% interest in that Discovery if a Petroleum Lease is issued or the Discovery is declared a potential commercial area.
The Planet Downs-1 well is targeting oil trapped in a four-way dip-closed sub-culmination located along the structural axis of the Curalle Anticline. The well's objective will test P50 reserves of approximately 1 mmbbls in the basal Birkhead and Hutton Formations.
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