Delays Behind? Yarrow 1 Completion Could Make or Break Red Sky’s Cash Flow

Operational Progress at Innamincka Dome

Red Sky Energy Limited (ASX, ROG) has announced that the Yarrow 1 well at the Innamincka Dome Project in South Australia is nearing completion, with finalisation expected by 9 November 2025. The well, operated by Santos Limited (ASX, STO) with an 80% stake, is a key asset in Red Sky’s portfolio, where it holds a 20% interest. The project is located in the prolific Cooper Basin, a region known for its conventional gas reserves.

Following a successful two-stage hydraulic fracture stimulation earlier this year, the Yarrow 1 well demonstrated a gas flow rate of approximately 1.8 million standard cubic feet per day during flowback, confirming its commercial viability. This stimulation targeted the Patchawarra and Tirrawarra formations, enhancing reservoir permeability and gas deliverability.

Production Ramp-Up and Infrastructure

Construction of the tie-in flowline, which will connect Yarrow 1 to the existing Santos-operated gas gathering system, is on schedule to be completed by 16 November 2025. This infrastructure is critical to bringing the well online, with first gas expected shortly after, by 18 November. Once operational, Yarrow 1 is forecast to more than double Red Sky’s current gas production from the Innamincka field, significantly boosting the company’s near-term revenue and cash flow.

Red Sky’s Managing Director, Andrew Knox, highlighted the strategic importance of this development, stating that the increased production will position the company for a strong finish to 2025. The partnership with Santos continues to deliver operational success, leveraging existing wellbores and infrastructure to unlock value efficiently.

Strategic Implications and Future Outlook

The success of the Yarrow 1 re-entry and stimulation program underscores Red Sky’s low-cost, short-cycle growth strategy focused on maximising discovered resources within the Innamincka Dome. The company is also awaiting the interpretation of a recent 3D seismic survey, due in the fourth quarter of 2025, which will guide further development and exploration plans for 2026.

Despite some delays caused by regional flooding earlier in the year, operations have resumed smoothly, and the project remains on track. The combined performance of Yarrow 1 and the existing Yarrow 3 well provides a solid foundation for additional drilling and infill opportunities, potentially expanding Red Sky’s footprint in the Cooper Basin.