carinda #1

Carinda #1 well shows promising results

The directors of Red Sky Energy Limited (?Red Sky? or ?the Company?) are pleased to announce an update on
the Carinda #1 well within its prospective Sandy Camp Project in northern New South Wales.
The well was drilled to a total depth (TD) of 354 metres. As previously advised, the presence of extensive
claystones did not allow coring. However wireline logs were conducted and analysed, which revealed 5.2 metres
of coal from 14 seams. This amount of coal was in line with expectations. Although some of the seams were too
shallow to contain gas, the amount of coal is very encouraging.
The Sandy Camp Project is comprised of four permits in which Red Sky has a 100% interest; PEL 467, 480, 481
and 482. The Project encompasses the Coonamble Embayment, a geological feature which covers an area of
15,000 km2 and which has the potential for a substantial gas resource. Wells drilled by Eastern Star Gas in this
feature have intersected at least 4 metres of gassy coals, being the Kurrabooma #1 and Baradine Creek #1 wells.
Refer map below.
A revised well design was successfully deployed for the Carinda #1 well. The results have demonstrated the
Sandy Camp Project area can be explored at a significantly reduced cost, whilst maintaining high safety and
environmental standards.
The exploration focus going forward will be on deeper parts of the project area, where it is expected coal seams
will be more gas charged. Given the large area of the project acreage, the Company?s exploration strategy is to
drill at least six to eight wells across PEL 480, 467, 481 and 482. This is expected to cost approximately $1m and
would be targeted for later in 2011.
The Company will make a decision on this work program towards mid 2011, whilst maintaining the focus on its
highly prospective permits in the Clarence Moreton Basin.