nsw csg punt with big leverage, page-4

Ok took a better look I wish I'd got more

http://redskyenergy.com.au/?page_id=5639#clarencemoretonproject

Clarence Moreton Project

This project encompasses the permits PEL 479, 457 and PELA 135 (formerly PSPA 37) in the Clarence Moreton Basin north east NSW. With the drilling of the Annvale and Talma core wells in late 2010 / early 2011, Red Sky earned a 30% interest in each of PEL 479 and 457. This exploration was very successful, resulting in the independent certification of significant reserves and the discovery of gas in the highly prospective Kangaroo Creek sandstone.

On 4 July 2012 the Company announced a multi faceted agreement with ERM Power. It included the placement of 150 million ROG shares, farm-in to the Clarence Moreton permits and a series of cash payments upon achieving agreed milestones totaling $2.7m. The agreement went unconditional on 13 September 2012.

The transaction sees ERM take over as the Operator and has committed to drill at least four wells across PEL 479 and 457, with an option for a further two wells. Accordingly, Red Sky’s interest in PEL 479 and 457 reduced to 20%.

Red Sky is contracted to receive $1m from ERM upon renewal of PEL 479. Also, ERM has the option over the next three years to buy out Red Sky’s 20% interest for $5m in each permit.