ROG (ASX) Summary of ROG and why it is INSANELY undervalued

Originally posted by CariKaya: ↑

Ok, so today I saw a post from MAV01 today on the Day Trade Thread suggesting ROG... If it were anybody else, I would be like:

But because it was MAV (and BIGMARN is here too), I didn't think twice... Bought a nice parcel at 0.006 :, just right before it got lined wiped....

The fact that he is heavily invested in ROG, made me think twice about Day Trading this baby for a measly 40-50%... So tonight I decided to do some research on the company, and after what I have discovered, I have decided to go Long Term!! If I sold below 1 cent, or even 5 cents, I would regret this for the rest of life!! This is going to be LIFE CHANGING!!

For those who just bought today based on the hype and held overnight expecting a gap up, you might want to consider keeping this as a LT hold for many more BAGS to come... (I now regret not buying more, but plan to first thing in morning whether it gaps up or not)...

If you know nothing about the company you are holding overnight, here is a quick summary:

Red Sky Energy Limited, is an Australian Listed Oil & Gas Acquisition and Development Company (ASX:ROG) that acquires, drills and develops Oil & Gas resources that can be produced conventionally using proven advanced technologies and developed best practice methods.

Red Sky Energy is looking to acquire assets which are either producing or can be brought intoproduction quickly. The Flax, Juniper and Yarrow fields have been acquired and farmed out to Santos Ltd. Several other acquisition opportunities are under investigation. Successful development will enable Red Sky Energy tovery quickly develop into amid-cap companywith healthy in ground reserves as well as profitable Oil & Gas production output. Red Sky Energy has assembled a team with a demonstrated track record of excellent operational execution in the development and operation of Oil & Gas fields. Individuals within the team have the expertise to assess opportunities, acquire assets and build Red Sky Energy into a cash-flow positive business. Based in Melbourne, Australia, we are looking locally and in SE Asia for acquisition and buy-in opportunities.

Red Sky Energy is an ASX listed oil and gas development company with four 20% highly prospective projects located in Australia’s Cooper Basin. The Company’s initial development targets are; 1) the Flax Project which contains a 2C contingent resource of 9.9m barrels of oil and 24 BCF of natural gas with in place infrastructure and six production wells that produced around 180k barrels of oil between 2009 and 2015 when it was closed down due to low Australian dollar oil prices; and 2) the Yarrow Project which contains a 2C contingent resource of 20 BCF of natural gas. These
projects are expected to deliver near term revenues with modest capital expenditure requirements.

The Company’s other two projects are significant with Juniper an oil and gas target with modest existing 2C oil and gas contingent resources with significant exploration potential, and PRLs 180/181/182 with oil and gas targets that is substantially under explored.

These are collectively known as "The Innamincka Dome Projects":

Other assets include 100% working interest in the Gold Nugget gas production in Wyoming, USA.

The Company is focused on moving its near term revenue projectsinto production(BIG $$$) whilst establishing the optimum model to explore the larger two substantially under explored projects.

We also have the The Killanoola Project:

As of 11 Febuary 2021, ROG completed the acquisition of Petroleum Retention Licence 13 (PRL13) through its wholly owned subsidiary Red Sky Killanoola Pty Ltd from a subsidiary of Beach Energy Ltd (Beach, ASX:BPT).

The Company has applied to the South Australian Minister for Energy and Mining for approval and the registration of the Sale and Purchase Agreement (SPA) and associated agreements for PRL13.

As of 17 February, 2021:

With the transfer now complete, ROG will now work towards developing the Killanoola oil field. The field has two shut-in wells. The first well, Killanoola-1-DW1, was drilled in 1998 and subsequently put on an extended production test. Reports show that the initial flow rates were as high as 300 barrels per day but quickly declined and is attributed to the waxy nature of the crude oil.

ROG is currently investigating different methods of enhancement recovery techniques to achieve and maintainlong term production at the highest rate.

It is intended to store the crude onsite before trucking it to the refinery. This will provide Red Sky with aquick and positive cash flow.

The Killanoola oil field has estimated oil in place of 7 million barrels. Modern enhanced oil recovery (EOR) techniques indicate that recoveries of up to 40% can be achieved at Killanoola equating to2.8 million barrelsas advised in our announcement on 29 November 2020.

The Killanoola oilfield was discovered by the Killanoola-1 well in 1998 at a depth of 850 metres. The oil is a 34° API waxy crude. Previous flow tests of the well have recorded rates of up to 300 bopd.

A second well, Killanoola SE-1, was drilled in 2011 and also discovered oil. This well has not undergone a production test. The petrophysical report identifies 16 metres net of oil bearing pay zones within the Sawpit Sandstone.

An exceptional result of 16m of Net Pay is in stark contrast to the original net pay estimates of 1.5m.Red Sky is now working to revise geological and geophysical interpretations to re-determine the volume of oil in place... WOW

The Company intends to perforate and test the well with planning underway in line with the license work programme. This test, if successful will allow Red Sky to book reserves associated with Killanoola SE-1.

Commenting on report, Red Sky Managing Director, Andrew Knox, said:

“The team remains focused on recommencing production at the KIllanoola-1 well and this excellent result from the petrophysical evaluation at Killanoola SE-1 is very encouraging. We are incorporating the testing of this well into our initial work programme as we continue to determine and extract full value from the resources at Killanoola.”

And I don't believe there is an imminent risk of Capital Raise considering ROG's recent CR of 4.3 Mil (29 Jan 2021 - just 2 months ago)Further, it is our JV with SANTOS which will inject A$9m in capital into Red Sky’s Innamincka Dome projects in relation to Red Sky’s Cooper Basin licences PRLs 14, 17, 18,180, 181 and 182

And one thing I always like to look at... Does our Management team have "skin in the game"?

ABSOLUTELT!!

Andrew Knox alone has 124,442,444 ordinary shares (as of 24/12/20) with the addition of 40,000,000 non-renounceable rights issue as per announcement 13 Nov 2020. He also has 120,000,000 performance rights!!

So, with just his ordinary shares, he owns 2.7% of the company!! A LOT OF HIS OWN money riding on the success of this company

Other Directors also have a substantial amount of "skin in the game" - Refer to Top 20 or Appendix 3Y for more details...

And the Top 20 Own half of the company (probably more now) based on Top 20 data from Annual Report:

I will delve into the Top 20 in more detail over the coming days, but so far it is looking pretty impressive

I could go on forever about the positive upsides of ROG, but in short, after my research tonight, I am officially a Long Term Investor ... I believe this will be HUGEEEE!!!

Just a reminder:

Successful development will enable Red Sky Energy tovery quickly develop into amid-cap companywith healthy in ground reserves as well as profitable Oil & Gas production output!!

Mid-Cap Company?? YESS PLEASE!!!

Tomorrow morning, I'm all in (secretly hoping / praying for no GAP)!! Anything under 1 cent (or even 5 cents) is a BARGAIN! Just think about how many BAGS (x 100%) you will be letting go if you trade this one for a few pips

And as MAV01 said earlier today: "A lot of peeps don’t understand that we have the $$$ to go to production with Killanoola and Santos are footing the bill with Innamincka, ROG to pay Santos back with profits from production which will only take a few months with the estimated revenue of $70k per day. So both projects a fully de-risked and the company has no debts.What’s not to like?The run up isn’t a pump for a CR like 88E and others have previously done. So it should be smooth sailing forward!!"

#CarikayaNEEDmoreATtheseREDICULOUSprices

DYOR and Good luck all

Expand

@CariKaya
Thanks for the detailed post. It inspired me to put some numbers on the Killanoola Oil Field. I have now created another thread for this, but the highlights are in the below graph showing the forecast EBITDA and NPAT and the FORECAST SHAREPRICE. Link to new thread is here - https://hotcopper.com.au/threads/killanoola-oil-field-potential-earnings-and-share-price-targets.5989202/

V

(20min delay)
Last 0.5¢		Change 0.001(25.0%)		Mkt cap ! $27.11M

Open	High	Low	Value	Volume
0.4¢	0.5¢	0.4¢	$1.669K	386.7K

No.	Vol.	Price($)
12	16013250	0.004
38	61567291	0.003
18	59142547	0.002
13	81350999	0.001
0	0	0.000

Price($)	Vol.	No.
0.005	69955993	109
0.006	24670209	35
0.007	43802631	19
0.008	10255722	16
0.009	9272559	13

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