ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
ABN 94 099 116 275
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Contents
CORPORATE DIRECTORY ..................................................................................................................... 2
MANAGING DIRECTOR’S LETTER ......................................................................................................... 3
DIRECTORS’ REPORT ............................................................................................................................ 4
AUDITOR’S INDEPENDENCE DECLARATION ..................................................................................... 24
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .. 25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 26
CONSOLIDATED STATEMENT OF CASHFLOWS ............................................................................... 27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................. 28
NOTES TO THE FINANCIAL STATEMENTS......................................................................................... 29
CONSOLIDATED ENTITY DISCLOSURE STATEMENT ....................................................................... 47
DIRECTORS’ DECLARATION ............................................................................................................... 48
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ................................................................. 49
SHAREHOLDER INFORMATION .......................................................................................................... 53
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CORPORATE DIRECTORY
Non-Executive Chairman
Mr Robert Annells
Managing Director
Mr Andrew Knox
Non-Executive Director
Mr Adrien Wing
Company Secretaries
Mr Adrien Wing
Ms Pauline Moffatt
Registered & Principal Office
Level 2, 480 Collins Street
Melbourne VIC 3000
Auditor
RSM Australia Partners
Level 27
120 Collins Street
Melbourne VIC 3000
Solicitors
Johnson Winter Slattery
Level 9
211 Victoria Square
Adelaide SA 5000
Website Address
www.redskyenergy.com.au
Stock Exchange Listings
Red Sky Energy Ltd shares are listed on the Australian Securities Exchange under
the code ROG
Share Registry
XCEND
Level 2, 477 Pitt Street
Haymarket NSW 2000
Phone: 61 2 8591 8509
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
MANAGING DIRECTOR’S LETTER
Dear Shareholders,
I am pleased to report that Red Sky has enjoyed a stellar 2024 of operational delivery, cash
generation and portfolio growth. The Company has enjoyed its first full inaugural year of production
which has translated into an increased cash position and established our reserves for further
development. The acquisition on new years eve of our first licence, 06/24, in offshore Angola has set
the scene for further growth this year.
Looking back on the year it is apparent that your Company has been focused on what it set out to
achieve. We have made substantial advances in enhancing our asset portfolio while having to endure
constant delays and frustrations. The team has been resilient in our endeavours to create value for
the Company through organic growth and acquisition.
It is with pleasure we were able to announce our first international foray with the award of the
Cegohna oil field in block 06/24 offshore Angola. The field has a best estimate in place volume of
106million barrels and Red Sky holds a 35% working interest in the licence. There are in addition
several nearby structures which have substantial potential to hold recoverable resources. The
Company is also continuing to work on additional opportunities to add to the portfolio.
The operational results at the Yarrow gas field within the Innamincka project with the Yarrow 3 well
have been satisfactory despite substantial down time. Further development during the year was
marred by the delays re-entering Yarrow 1 due to a lack of ullage in the grid but this was rectified
earlier this year with the successful flow test of Yarrow 1 and bodes well for future development.
The challenges with the crudes viscosity and available markets at Killanoola have continued. We
have been working tirelessly to establish alternative markets for the crude and I am pleased to advise
that we have found a resolution to the matter. This was a precursor to our planned work program
which can now proceed with the caveat of costs and rig availability.
The domestic and international landscape is tumultuous and constantly changing and combined with
market and cost pressures has made for a challenging and somewhat uncertain business
environment. However sound financial management and steadfast focus is yielding results. Small
steps are being taken within but we are also mammoth hunting. The Company is poised to capitalise
on the opportunities before it and remains dedicated to unlocking the value in our portfolio, driving
operations and pursuing acquisitions that align with our value accretive vision for growth.
Finally I extend my gratitude to our dedicated board and management and in particular our
shareholders for your continued support and commitment to our vision for the future. We are on the
cusp, watch the space.
Andrew Knox
Managing Director
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
DIRECTORS’ REPORT
Your directors present their report consisting of Red Sky Energy Ltd (the Company) and controlled entities (the Group) as at the end of, or
during, the year ended 31 December 2024.
Directors
The following persons were directors of Red Sky Energy Ltd during the whole year and up to the date of this report, unless otherwise
stated:
Mr Robert Annells - Non-Executive Chairman
Mr Andrew Knox – Managing Director
Mr Adrien Wing – Non-Executive Director
Company Secretaries
Mr Adrien Wing
Ms Pauline Moffatt
Principal Activities
The principal activities of the Group during the year were the production of and exploration for economic deposits of oil and gas.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of the Group during the year.
Operating Results
The net operating profit of the Group for the year ended 31 December 2024 after tax was $272,410 (31 December 2023: loss of
$1,559,814).
Review of Operations
HIGHLIGHTS
Highlights during the year were as follows:
Innamincka
•
Yarrow 3 has generated gross production receipts of $3.18 million year-to-date.
•
Approximately 85% of revenue comes from gas sales, with the remainder from LPG and condensate.
•
The well’s current flow rate remains steady, reflecting stable operational performance.
•
Surveillance and flow testing in September of Yarrow 1 indicated minimal reservoir pressure depletion and low water
production, suggesting strong future well performance.
•
Analysis identified high wellbore skin, leading to a planned fracture stimulation to improve gas flow and overall well productivity.
•
Planned work involved re-sleeving the casing and conducting fracture stimulation in two stages, with anticipated post-fracture
production rates of 1.6 to 3.6 MMscf/d.
•
Re-entry of Yarrow 1 well in the Yarrow gas field commenced in the first week of November, with workover rig mobilised.
•
Pre-fracture workover at Yarrow 1 completed in December, preparing the well for fracture stimulation in March 2025.
•
Yarrow 1 expected to have the well tied in and fully operational in Q3 2025.
•
The expected ultimate recovery from Yarrow 1 is estimated at 2.4 BCF gross, distributed on a 50:50 basis between the
Patchawarra and Tirrawarra formations.
•
The Yarrow 1 re-entry is projected to boost Red Sky’s cash flow in 2025, complementing the revenue streams from Yarrow 3.
•
Successful re-entry at Yarrow 1 enhances Red Sky’s potential for long-term cash flow from its Innamincka portfolio, supporting
the Company’s growth strategy.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Killanoola
•
Red Sky finalised an agreement with Viva Energy Australia Pty Ltd (ASX:VEA) to purchase all crude from the Killanoola oil field
project, ensuring a steady revenue stream.
•
Negotiations with additional potential crude buyers are ongoing.
•
Red Sky is actively exploring its own storage and offtake plan.
•
Ongoing discussions continue regarding condensate blending to alleviate pour point issues.
•
Initial flow rates from the DW1 well showed promise despite subsequent mechanical issues.
•
Red Sky intends to drill a high impact well, KN2, based on 3D seismic interpretation.
•
Plans for new Killanoola KN2 well involve a separate well pad in a new location, necessitating site construction.
•
Drilling a vertical well at the KN2 site will enhance operational efficiency.
•
To optimise mob/demob costs it was decided to combine the workover and drilling operations.
•
Activity Notification to carry out the workover at DW1 has been submitted to SA DEM for approval.
•
Activity Notifications (ANs) to be submitted for DEM approval for KN2 and SE2 well site preparations, and drilling of KN2 and
SE2 wells.
•
Discussions with other operators are underway to determine rig contractor selection to reduce costs.
Block 6/24, Angola
•
On 31 December 2024, Red Sky was awarded a 35% interest in Block 6/24, located offshore Angola in the Kwanza Basin.
•
Block 6/24 spans 4,930 km², includes extensive seismic coverage and is located in a region with multiple oil discoveries and
high prospectivity.
•
Red Sky’s acquisition marks a transformational milestone, introducing a highly prospective oil asset with potential for early
production and significant cash flow generation.
•
Analysis of available data reveals that nine wells have been drilled in Block 6/24, including one that discovered the Cegonha oil
field. Preliminary evaluations suggest this could be a commercial discovery, with geological and geophysical studies now
underway to validate the resources.
•
The Block’s substantial resource potential will be evaluated by JV partners, with multiple parties expressing interest in fully
financing the project’s development.
•
The Company is commissioning its own independent review of the resource potential.
•
This acquisition diversifies Red Sky’s portfolio, complementing its Innamincka and Killanoola projects, and supports long-term
growth and geographic balance.
Corporate
•
Managing Director Andrew Knox participated in the Angola Oil and Gas Conference in Luanda in October.
•
The Company continues to evaluate further acquisition opportunities.
•
The Company had cash reserves as at 31 December 2024 of $2.96m.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Innamincka Dome Projects
YARROW 3 PRODUCTION CONTINUES TO GENERATE CASH RECEIPTS
Since commencing gas production in August 2023 through to the end of December 2024, Yarrow 3 has generated $3.31 million in cash
receipts. Approximately 85% of this revenue stems from gas sales, with the remainder contributed by LPG and condensate. In
December 2023, Red Sky announced the receipt of its initial revenues for November under its bilateral gas sales agreement (MBA) with
Origin Energy Limited (ASX:ORG). This milestone followed the completion of pipeline construction by Santos Limited (ASX:STO) and its
successful integration into the grid south of the Yarrow gas field.
Figure 1: Innamincka Dome Projects location map with Yarrow and Napowie highlighted
3D SEISMIC INTERPRETATION
Red Sky, in partnership with Santos, successfully completed a 3D seismic acquisition program at the Innamincka Dome, specifically
covering areas in PRL14 and PRL17 in December 2023. The program, which started in October 2023, aimed to gather detailed
subsurface data to inform future drilling and exploration decisions.
All field operations concluded with the demobilisation of crews and equipment. The joint venture with Santos was cost-effective, leading
to a shared benefit from the seismic data, which will enhance understanding of the subsurface structures crucial for well placement and
exploration. The focus has now shifted to the processing and interpretation of the acquired seismic data.
The seismic data interpretation is expected to be completed by the third quarter of 2025, with no new development wells planned until
late 2025. This schedule supports Red Sky's strategy of optimising current production while setting the stage for future growth. This
seismic acquisition is vital for Red Sky, as it provides the necessary data to make informed decisions on where to drill the new
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
development wells and may also provide further drilling opportunities, potentially increasing the efficiency and success rate of drilling
operations. Red Sky holds a 20% working interest in six PRLs (14, 17, 18, 180, 181, 182) at the Innamincka Dome.
Figure 2: Shared Benefit Area Map and Coordinates
RE-ENTRY OF YARROW 1
In December 2024, Red Sky provided an update from Santos regarding progress at the Yarrow 1 well. Pre-fracture workover activities
proceeded as planned, with a critical milestone achieved through the successful cementing of the 4.5" sleeve. This step is essential in
preparing the well for fracture stimulation. The workover rig was demobilised as scheduled on 19 December 2024, marking the
completion of this preparatory phase.
The demobilisation of the workover rig involved safely dismantling and removing the rig and its associated equipment from the well site.
This signifies the readiness of the site for the next critical phase: fracture stimulation, which is designed to enhance gas flow. During the
workover, typical challenges associated with legacy wells were encountered but addressed safely, ensuring that the main fracture
stimulation target remains uncompromised.
Post year end the Yarrow 1 well underwent fracture stimulation, in late February 2025. This pivotal operation unlocked the well’s full
production potential, with post-fracture production rates projected to significantly increase gas flow, providing a positive outlook for future
production.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Figure 3: Location of Yarrow 1 Well
Background
Red Sky announced in late October 2024 that Santos had advised that the re-entry of the Yarrow 1 well in the Innamincka Dome
remained on schedule to commence in the first week of November. The re-entry is a critical milestone in the Company’s growth strategy,
expected to unlock significant gas production potential and enhance the Company's future cash flow profile.
Santos completed surveillance gathering for the Yarrow 1 well in September 2024. The static pressure survey and flow test results
indicated negligible reservoir pressure depletion and low water production, positively reflecting the well's performance. During a
repeatable flow test conducted over three days, sustained gas flow to the surface was estimated at approximately 1.8 million standard
cubic feet per day, at around 500 psig FTHP.
Additionally, the pressure transient analysis (PTA) of the surface pressure build-up (PBU) suggests a relatively high wellbore skin (+10),
supporting the case for implementing fracture stimulation to enhance well productivity. As a result, Santos recommended proceeding
directly with the full recompletion and fracture stimulation plan as scheduled to improve gas output and reduce wellbore skin effects.
Given the low water production observed during flow testing, the decision was made to skip the cased hole neutron logging scope. The
remaining downhole work involved a 7-inch casing re-sleeve to selectively fracture and stimulate the Patchawarra and Tirrawarra
formations in two stages. Following these enhancements, the updated project rate assessment post-fracture stimulation is expected to
be between 1.6 and 3.6 million standard cubic feet per day with a 2-3/8 inch single tubing configuration.
In November, Red Sky announced that Santos had mobilised the workover rig to the Yarrow 1 well site. The rigging process was
underway, with Santos commencing the pre-fracture stimulation workover scoping. This milestone brought Red Sky and Santos closer
to completing the re-entry and re-sleeving activities at Yarrow 1, which are aimed at optimising gas flow and improving production
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
efficiency from the well. The preface workover scope included targeted interventions to prepare the well for fracture stimulation,
expected to significantly enhance gas production capabilities.
Technical Details on the Workover and Rigging Process
As part of the Yarrow 1 re-entry, the workover rig is being utilised to perform critical preparatory tasks for the fracture stimulation. The
rigging-up phase involves assembling and securing rig components, including the derrick, blowout preventers (BOP), and other control
equipment necessary for safe well intervention. This setup is essential to allow for the re-sleeving of the casing, which will selectively
isolate certain zones within the wellbore, optimising the focus of the fracture stimulation on high-potential gas-bearing formations.
Once rigging was completed, the pre-frac workover scope involved:
1.
Cleaning and Conditioning the Wellbore: Ensuring all obstructions are cleared for optimal flow.
2.
Re-sleeving Operations: The insertion of sleeves to isolate zones that will be selectively fractured, maximising the flow from the
most productive formations.
3.
Pressure Testing and Pre-Fracture Diagnostics: These assessments will verify the well's readiness for stimulation and ensure
pressure integrity, crucial for safe and efficient fracture stimulation.
This multi-step process not only prepared the well for enhanced production but will also contribute to greater long-term asset efficiency
by optimising gas extraction.
KILLANOOLA PROJECT
Figure 4: Killanoola Oil Field (PRL-13) location map
(Adelaide Energy Pty Ltd is a subsidiary of Beach Energy Ltd (ASX:BPT))
In August 2023 Red Sky signed a conditional agreement with Viva Energy Australia Pty Ltd (ASX:VEA) to purchase all crude from the
Killanoola oil field project, subject to required quality specifications. Delivery would be made to Viva Energy's Geelong refinery by road
tanker, approximately four hours southeast of the project site. Work is ongoing regarding flow assurance, considering options such as
heating or blending, while negotiations with other potential crude buyers and performing our own offtake sales are also in progress.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
In December 2023, works to prepare the well for the extended production test commenced after Red Sky received approval from the
Government of South Australia (SA) Department for Energy and Mining (DEM), and contractors were mobilised to the site. However,
operations at the DW1 well were suspended shortly after due to a downhole mechanical failure of the existing pump, which led to the
well losing its capacity to lift fluid to the surface. Operations were halted pending the installation of a new pump.
Despite encountering mechanical issues, initial flow rates were promising. An initial rate of 62 bbl/day, on an increasing trend, was
observed. The forward programme at Killanoola was further revised as announced in May 2024.
Red Sky has decided to drill a high impact well, KN2, based on 3D seismic interpretation, with the well pad for KN2 shown in the
accompanying figure. The spud date for KN2 is subject to costs, alignment with other operators to form a drilling consortium firstly and
importantly as a prerequisite, satisfactory offtake arrangements. Drilling a vertical well at this site is expected to provide more efficient
operations. The same rig will be used for the workover at DW1 and the completion of the suspended well at SE1. Work on the AN for the
KN2 well pad is complete.
This revised approach aligns with our broader strategy to optimise resource utilisation, reduce operational risks and costs, and enhance
shareholder value through careful and calculated project management.
Figure 5: Location of well pad to be built at KN2
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Figure 6: Aerial View of the Revised Forward Programme
BLOCK 6/24, ANGOLA
On 31 December 2024, Red Sky and the Angolan National Agency for Oil, Gas and Biofuels (ANPG) signed a Risk Service Contract
(RSC) for offshore Block 6/24 in partnership with ACREP Exploração Petrolífera SA (ACREP) and Sonangol Exploracao e Produção SA
(Sonangol E&P). The RSC for offshore Block 6/24 is the result of direct negotiations undertaken by Red Sky with ANPG.
Over recent years, Red Sky has actively pursued opportunities to acquire producing or near-production assets, leveraging prospects
arising from the global shift away from fossil fuels by major energy companies. The signing of the RSC for Block 6/24 marks the
Company’s first entry into Angola and represents a transformational milestone. The Block contains a potential commercial oil discovery
that the JV partners aim to evaluate for early production and cash flow generation, with significant resource potential identified through
2D and 3D seismic data. The Company is currently pursuing the preparation of its own independent competent persons report on the
potential of this project.
This acquisition enhances Red Sky’s asset portfolio by introducing a highly prospective offshore block. Several parties have expressed
interest in fully financing the project’s development, which will improve the Block’s economics. Block 6/24 diversifies Red Sky’s holdings,
complementing its Innamincka gas and Killanoola oil projects, and positions the Company for long-term growth and stability through a
balanced, geographically diverse investment strategy.
BLOCK 6/24 OWNERSHIP AND LOCATION
Sonangol E&P is the operator of the Block with a 50% participating interest. Red Sky Energy will hold a 35% participating interest, and
ACREP will hold the remaining 15% participating interest.
Block 6/24 is located 12 kilometres offshore Angola in the Kwanza Basin, in water depths ranging from 70 to 80 metres. The Block is
covered by 1,531km2 of 2D seismic and 1,465 km2 of 3D seismic.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Red Sky was granted access to a data room by the Angolan National Agency for Oil, Gas and Biofuels (ANPG) during the direct
negotiation process. As a result of its review of the available materials in that data room at that time, the Company estimates there is
significant potential for oil to be found in Block 6/24. In addition, the Block contains the Cegonha oil discovery, and further studies are to
be undertaken to determine the commerciality of that discovery.
Figure 7: Block 6/24 Location
NEXT STEPS
The immediate next steps following the signing of the Risk Service Contract (RSC) include:
•
Implementation of a Joint Venture Operating Agreement (JVOA): Formalising roles, responsibilities, and operational
frameworks among the JV partners.
•
Independent Competent Persons Report (CPR): The Company is commissioning its own CPR on the discovery and
prospective resources of the licence.
•
Parliamentary Ratification: Approval of the RSC by the Angolan Parliament, expected within approximately 90 days.
•
Execution of Geological & Geophysical (G&G) Studies: Over the first three years, focusing on seismic reprocessing and
detailed subsurface evaluation.
•
Optional Well Decision: A decision on drilling an optional well in Year 4, contingent on the results of initial studies.
•
Importantly it should be noted this forms part of the formal work programme agreed but which can be brought
forward.
ANGOLA CONTEXT
In recent years, Angola has made significant strides to create a more favourable environment for foreign investment, particularly in the
oil and gas sector. The country has implemented regulatory reforms to streamline the process for foreign investors, making it easier to
do business in the country. This includes the establishment of the Angolan National Agency for Oil, Gas and Biofuels (ANPG) to oversee
the oil and gas sector.
Angola is investing in infrastructure development, which supports the operations of foreign companies, particularly in the oil and gas
industry. It has also been actively seeking and establishing strategic partnerships with foreign companies to further develop its natural
resources and maximise their value.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Relative stability, in conjunction with security and an attractive exploration and production landscape, provides the country with the edge
over regional peers. While challenges remain, Angola is generally considered friendly to foreign investment, particularly in sectors like oil
and gas, where it seeks to leverage foreign expertise and capital to develop its resources.
Figure 8: Angola location map with the approximate location of Block 6/24
RISK SERVICE CONTRACT
The Risk Service Contract (RSC) entered into by Red Sky is an agreement typically used in the oil and gas industry where one or more
companies (the contractors) agree to explore, develop, and produce hydrocarbons in a specific area on behalf of the host government or
national oil company. The key features of the RSC include:
Assumption of Operational and Financial Risk: The contractor parties (Red Sky, ACREP, and Sonangol E&P) assume all financial
and operational risks associated with the undertaking of exploration, development, and production activities within the Block.
Cost Recovery: The contractors are entitled to recover their exploration and development costs from the production revenues
generated from the sale of hydrocarbons produced from Block 6/24.
Profit Share: In addition to cost recovery, the contractors earn a share of the profits generated from the sale of such hydrocarbons
based on certain performance metrics set out in the RSC.
Ownership and Control: ANPG retains ownership of all hydrocarbons produced from Block 6/24. However, it is contractually required
to make payments in kind to the contractors on account of their cost recovery and profit share entitlements when such hydrocarbons are
sold. Sonangol E&P, as the operator appointed under the RSC, is afforded exclusive operational control of all exploration and production
activities undertaken in Block 6/24.
Duration: The RSC has an initial 6-year exploration and appraisal period, and if no commercial discovery is made or declared, the RSC
expires at the end of this period. If a commercial discovery is made or declared, then the RSC remains in force and effect for a further
30 years in respect of the applicable development area.
Minimum Work Obligations: The RSC requires that the contractors undertake geological and geophysical studies and seismic data
reprocessing during the first 3 years of the initial research period, and if they elect to enter the 4th year, they are then obliged to drill an
exploration or appraisal well, If however they do not elect to enter the 4th year, then they are taken to have withdrawn from the RSC
without penalty.
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
GOLD NUGGET, WYOMING
The Gold Nugget well was post year end plugged and abandoned. The Company will no longer be involved in the USA and is focused
on its core assets in Australia and Angola.
STRATEGIC ACQUISITIONS
Red Sky continues to assess opportunities in two regions of interest, Southeast Asia and Sub-Saharan Africa, as part of its strategy of
acquiring producing or near production assets. The recent signing of the Risk Service Contract with the Angolan National Agency for Oil,
Gas and Biofuels (ANPG) for offshore Block 6/24 is a result of this strategy. A number of potential acquisitions are currently being
pursued.
Figure 9: Red Sky’s regions of interest for strategic acquisitions
In October, Red Sky’s Managing Director, Andrew Knox, and New Ventures Manager, Serge Toulekima, attended the Angola Oil and Gas
Conference in Luanda, Angola. Focused on diversifying and de-risking its asset base, Red Sky was attracted by Angola’s favourable
environment for oil and gas investment. Andrew joined a panel of experts for a roundtable discussion on "Synergies through
Collaboration: International Ventures in Angola's Oil Sector."
Figure 10: Red Sky Energy Managing Director, Andrew Knox, and New Ventures Manager, Serge Toulekima, at the Angola Oil and Gas
Conference
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Figure 11: Red Sky’s Andrew Knox speaking at a roundtable at the Angola Oil and Gas Conference
Risks and Uncertainties
The business and operations of Red Sky are subject to numerous risks, many of which are beyond Red Sky’s control. Red Sky considers
the risks set out below to be some of the most significant to the Company, but not all of the risks associated with the Company. If any of
these risks materialise into actual events or circumstances or other possible additional risks and uncertainties of which Red Sky is
currently unaware or which it considers to be material in relation to Red Sky’s business actually occur, the Company’s assets, liabilities,
financial condition, results of operations (including future results of operations), business and business prospects, are likely to be
materially and adversely affected.
(a) Red Sky has limited financial resources and limited operating revenues. To earn and/or maintain its interest in its oil and gas
projects, the Company has contractually agreed or is required to make certain payments and expenditures for and on such
projects. Red Sky’s ability to continue as a going concern is dependent upon, among other things, Red Sky establishing
commercial quantities of oil and gas reserves on its projects and obtaining the necessary financing and permits to develop and
profitably produce such products or, alternatively, disposing of its interests on a profitable basis, none of which is assured.
(b) Until this year Red Sky has only generated losses and may require additional funds to further explore its projects. Aside from
revenue being generated from the Innamincka project, the only sources of funds for exploration programs, or if such
exploration programs are successful for the development of economic ore bodies and commencement of commercial
production thereon, presently available to Red Sky are the sale of equity or farming out its oil and gas projects to third party for
further exploration or development. Red Sky’s ability to arrange financing in the future will depend, in part, upon the prevailing
capital market conditions as well as its business performance. There is no assurance such additional funding will be available
to Red Sky when needed on commercially reasonable terms or at all. Additional equity financing may also result in substantial
dilution thereby reducing the marketability of Red Sky’s shares. Failure to obtain such additional financing could result in the
delay or indefinite postponement of further exploration and the possible, partial or total loss of the Company’s interest in its
projects.
(c) Oil and gas production and exploration are subject to a high degree of risk, which even a combination of experience,
knowledge and careful evaluation may fail to overcome. These risks may be even greater in Red Sky’s case given its formative
stage of development and the fact that its oil and gas projects are still in their early stage. Furthermore, exploration activities
are expensive and seldom result in the discovery of a commercially viable resource. There is no assurance that Red Sky’s
exploration will result in the discovery of an economically viable project.
(d) Red Sky activities are subject to the risks normally encountered in the petroleum production and exploration business. The
economics of exploring, developing and operating resource projects are affected by many factors including the cost of
exploration and development operations, variations of the quality of the oil and gas and the rate of resource extraction and
fluctuations in the price of resources produced, government regulations relating to royalties, taxes and environmental
protection and title defects.
(e) Red Sky’s oil and gas projects may be subject to prior unregistered agreements, interests or land claims and title may be
affected by undetected defects. In addition, the Company’s activities require certain licences and permits from various
governmental authorities. There is no assurance that Red Sky will be successful in obtaining the necessary licences and
permits on a timely basis or at all to undertake its activities in the future or, if granted, that the licences and permits will be on
the basis applied or remain in force as granted.
(f)
Red Sky must comply with environmental laws and regulations governing air and water quality and land disturbance and
provide for reclamation and closure costs in addition to securing the necessary permits to advance activities at is oil and gas
projects. Environmental legislation is evolving in a manner that will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree
of responsibility for companies and their officers, directors and employees. Compliance with environmental laws and
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Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
regulations may require significant capital outlays on behalf of the Company and may cause material changes or delays in the
Company’s intended activities. Furthermore, environmental hazards may exist on the Company’s projects that are unknown to
the Company at present and that have been caused by the Company or by previous owners or operators of the projects, or
that may have occurred naturally. The Company may be liable for remediating such damages.
(g) Although the Company’s immediate focus will be on the existing projects, as with most exploration entities, it will pursue and
assess other new business opportunities in the resource sector over time which complement its business. These new business
opportunities may take the form of direct project acquisitions, joint ventures, farm-ins, acquisition of tenements/permits, and/or
direct equity participation. The acquisition of projects (whether completed or not) may require the payment of monies (as a
deposit and/or exclusivity fee) after only limited due diligence or prior to the completion of comprehensive due diligence. There
can be no guarantee that any proposed acquisition will be completed or be successful. If the proposed acquisition is not
completed, monies advanced may not be recoverable, which may have a material adverse effect on the Company. If an
acquisition is completed, the Directors will need to reassess at that time the funding allocated to current projects and new
projects, which may result in the Company reallocating funds from the projects and/or raising additional capital (if available).
Furthermore, notwithstanding that an acquisition may proceed upon the completion of due diligence, the usual risks associated
with the new project/business activities will remain.
(h) Several of the Permits overlap with certain third-party interests that may limit or impose conditions on the Company's ability to
access the Permits to conduct exploration and production activities or that may cause delays in the Company's activities. In
particular, under South Australia and Commonwealth legislation, the Company may be required to obtain the consent of and/or
pay compensation to the holders of third-party interests, including private land, pastoral leases, petroleum tenure and other
mining tenure which overlay areas within the Permits in respect of any proposed exploration or production activities on the
Permits. The Company is also required to obtain the consent of the relevant Minister for activities on certain Permit areas.
(i)
The Company is reliant on a number of key personnel and consultants, including members of the Board. The loss of one or
more of these key contributors could have an adverse impact on the business of the Company. It may be particularly difficult
for the Company to attract and retain suitably qualified and experienced people given the current high demand in the industry
and relatively small size of the Company, compared with other industry participants.
(j)
Climate change is a risk the Company has considered, particularly related to its operations in the petroleum industry. The
climate change risks particularly attributable to the Company include:
a.
The emergence of new or expanded regulations associated with the transition to a lower-carbon economy and
market changes related to climate change mitigation. The Company may be impacted by changes to local or
international compliance regulations related to climate change mitigation efforts, or by specific taxation or penalties
for carbon emissions or environmental damage. These examples sit amongst an array of possible restraints on
industry that may further impact the Company and its profitability. While the Company will endeavour to manage
these risks and limit any consequential impacts, there can be no guarantee that the Company will not be impacted
by these occurrences; and
b.
Climate change may cause certain physical and environmental risks that cannot be predicted by the Company,
including events such as increased severity of weather patterns and incidence of extreme weather events and long-
term physical risks such as shifting climate patterns. All these risks associated with climate change may significantly
change the industry in which the Company operates.
The above list of risks, uncertainties and other factors is not exhaustive.
Environmental Issues
The Group’s operations are subject to various environmental regulations. The majority of the Company’s activities involve low level
disturbance associated with its programs. As at the date of this report the group complies fully with all such regulations.
Health
The Company continued to monitor and comply with the preventive measures and controls authorities require business to apply.
Safety
There were no significant incidents or injuries during the year and at 31 December 2024, the year to date performance for Minor Injuries,
Medical Treatment Injuries and Lost Time Injuries was zero.
Environment
There were no significant incidents or environmental events during the period and the Company continues to collaborate with local
landholders to ensure the Company’s exploration work programs have minimal impact on agri-business activities and rehabilitation is
completed to a high standard.
Community
In preparation for undertaking work activities there has been extensive landholder or landowner consultation and coordination meetings.
During work programs there is regular communication with landholders to ensure company activities have a minimal impact on agri-
business activities.
Page | 17
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Information on Directors and Secretaries
Robert Annells – Non-Executive Chairman
Mr Annells has over 30 years experience with public upstream oil and gas companies. He is a former member of the Australian Stock
Exchange with over 40 years of experience in the Securities Industry, and is also a qualified accountant. His experience includes
Managing Director of Securities firms Credit Lyonnais and subsequent directorship of Daiwa Securities Ltd. He was Chairman of Lakes Oil
Ltd for in excess of 30 years, founding Director of Gippsland Offshore Petroleum and founding Chairman of Greenearth Energy Ltd. Mr
Annells was appointed Chairman on 8 February 2021.
Current Directorships:
Nil
Other Directorships within the last three years:
Nil
Andrew Knox – Managing Director – B.Comm, CA, CPA, FAICD
Mr Knox has over 40 years of experience in the upstream oil and gas sector. He has worked extensively throughout Australasia,
Southeast Asia and North America with several entities predominantly in oil and gas and has been a director of several public resource
companies. Mr Knox was appointed Director on 6 July 2018.
Current Directorships:
Rimfire Pacific Mining NL (since 18 March 2020)
Other Directorships within the last three years:
Nil
Adrien Wing – Non Executive Director and Joint Company Secretary, B.Acc, CPA
Mr Wing is a Certified Practicing Accountant. He practised in the audit and corporate advisory divisions of a chartered accounting firm
before working with a number of public companies listed on the Australian Securities Exchange as a corporate/accounting consultant and
company secretary. Mr Wing was appointed Company Secretary on 3 February 2011 and Non-Executive Director on 7 March 2014. Mr
Wing resigned as a Director on 22 March 2016 and was re-appointed on 15 December 2016.
Current Directorships:
Cleo Diagnostics Limited
New Age Exploration Limited
Sparc Technologies Limited
Other Directorships within the last three years:
Mitre Mining Corporation Limited (from 21 May 2021 to 9 March 2023)
Pauline Moffatt – Joint Company Secretary, B.Comm, GAICD, FGIA ICSA
Ms Moffatt is a graduate of the Australian Institute of Company Directors (GAICD) and a fellow GIA ICSA of the Governance Institute of
Australia. Ms Moffatt has a wealth of experience, providing specialised accounting and company secretary services to public companies
for over 20 years. Ms Moffatt was appointed Joint Company Secretary on 15 January 2019.
Meetings of Directors
The number of meetings held by the Company’s directors during the year and the number of meetings attended by each director were:
Director
Board meetings held
Board meetings
attended
Robert Annells
8
8
Adrien Wing
8
8
Andrew Knox
8
8
Page | 18
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Securities held and controlled by Directors
As at the date of this report, the interests of Directors in securities of the Company were as follows:
Holder
Ordinary Shares
Performance Rights
Robert Annells
20,625,000
100,000,000
Andrew Knox
255,500,000
175,000,000
Adrien Wing
78,240,111
100,000,000
Total
354,365,111
375,000,000
Performance Rights and incentives granted to directors
Performance Rights were issued to directors following shareholder approval and others on 10 June 2021 (Mr Andrew Knox 175,000,000,
Mr Robert Annells 100,000,000 and Mr Adrien Wing 100,000,000). The Performance Rights issued were subject to the following vesting
conditions:
-
The Company achieving a market capitalisation of equal to or greater than $100 million for 5 consecutive trading days within 5
years; and
-
The recipient remaining continuously employed or engaged up to the date of satisfaction of the market capitalisation vesting
condition.
These Performance Rights are being expensed over the 5-year term up to the expiry date.
Shares under option
There are currently no options on issue.
Dividends Paid or Recommended
No dividend was paid or declared during the period and the Directors do not recommend the payment of a dividend.
Events Subsequent to Balance Date
No matters or circumstances have arisen since 31 December 2024 that have significantly affected, or may significantly affect the group’s
operations, the results of those operations, or the group’s state of affairs in future years.
Likely developments
The group will focus on the producing of and the exploration for economic deposits of oil and gas. It is the intention of the Board to
continue the strategy of acquiring an oil and gas portfolio.
Page | 19
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Remuneration Report (audited)
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporation Act 2001.
This report outlines the remuneration arrangements in place for Directors and executives of Red Sky Energy Limited. This report has
been set out under the following main headings:
A.
Principles Used to Determine the Nature and Amount of Remuneration
B.
Service Agreements
C.
Details of Remuneration
D.
Key Management Personnel Equity Holdings
E.
Share-based Compensation
F.
Other Transactions with Key Management Personnel
G.
Additional Information
A. Principles Used to Determine the Nature and Amount of Remuneration
The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors and Executive Officers.
The Board will assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high-
quality Board and executive team.
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the
results delivered. The framework aligns executive reward with achievement of strategic objectives, and the creation of value for
shareholders, and conforms to market best practice for delivery of reward. The Board ensures that executive reward satisfies the following
key criteria for good reward governance practices:
➢
Competitiveness and reasonableness
➢
Acceptability to shareholders
➢
Performance linkage/alignment of executive compensation
➢
Transparency
➢
Capital management
The board policy is to remunerate Non-executive Directors at fair market rates for comparable companies for the relevant time,
commitment and responsibilities. The board determines payments to the non-executive Directors and reviews their remuneration annually
based on market practice, duties and accountability. The maximum amount of fees that can be paid to Non-executive Directors is subject
to approval by shareholders at the Annual General Meeting. The maximum amount approved is $250,000. Fees for non-executive
Directors are not linked to the performance of the Group. However, to align Director’s interests with shareholder interests the Directors are
encouraged to hold shares in the Company and may be issued with additional securities as deemed appropriate.
The Board believes that the remuneration policy is appropriate given the stage of development of the Company and the activities which it
undertakes and is appropriate for aligning Director and executive objectives with shareholder and business objectives. The board will
continually develop new practices which are appropriate to the Company’s size and stage of development.
Executive Officers are those directly accountable for the operational management and strategic direction of the Company and the Group.
All contracts with Directors and executives may be terminated by either party with three months notice.
Fixed remuneration
Fixed remuneration consists of a base remuneration package, which includes Directors’ fees (in the case of Directors), salaries, consulting
fees and employer contributions to superannuation funds.
Page | 20
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
B. Service Agreements
The directors and key management personnel during the current year included:
Directors
Mr Robert Annells – Non-Executive Chairman
➢
Director fees set at $48,000 per annum inclusive of superannuation. Effective 1 February 2024, the salary for Mr Annells was
increased to $85,000 per annum inclusive of superannuation.
Mr Andrew Knox – Managing Director
➢
Director salary set at $260,000 per annum plus superannuation. Effective 1 February 2024, the salary for Mr Knox was
increased to $360,000 per annum plus superannuation. Effective 1 April 2024, the salary for Mr Knox was increased to
$468,000 per annum plus superannuation upon the Company’s EBITDA exceeding $4,000 per day for 90 consecutive days
(average).
➢
In addition to annual reviews, Mr Knox’s base salary may increase to $624,000 per annum plus superannuation upon the
Company’s EBITDA exceeding $6,000 per day for 90 consecutive days (average).
➢
The Company may terminate Mr Knox’s salary by giving not less than 6 months written notice, or upon payment of 6 months’
base salary in lieu of notice.
Mr Adrien Wing – Non-Executive Director and Company Secretary
➢
Director fees set at $48,000 per annum. Effective 1 February 2024, the salary for Mr Wing was increased to $60,000 per
annum.
➢
The company has an agreement with Northern Star Nominees Pty Ltd (a related party of Mr Wing) for company secretarial
services at a rate of $5,500 per month. Effective 1 February 2024, the rate was increased to $5,775 per month.
Performance Rights were issued to directors following shareholder approval and others on 10 June 2021 (Mr Andrew Knox 175,000,000,
Mr Robert Annells 100,000,000 and Mr Adrien Wing 100,000,000, Employees 50,000,000 (currently reduced to 25,000,000 due to
employee resignation) and Consultants 50,000,000). The Performance Rights issued were subject to the following vesting conditions:
-
The Company achieving a market capitalisation of equal to or greater than $100 million for 5 consecutive trading days within 5
years; and
-
The recipient remaining continuously employed or engaged up to the date of satisfaction of the market capitalisation vesting
condition.
These Performance Rights are being expensed over the 5-year term up to the expiry date.
C. Details of Remuneration
The key management personnel of Red Sky Energy Limited during the years ended 31 December 2024 and 2023 included all directors
mentioned above. There are no other executives of the Company which are required to be disclosed.
Remuneration packages contain the following key elements:
➢
Primary benefits – salary and consulting fees;
➢
Equity – share options, performance rights and other equity securities; and
➢
Other benefits.
Page | 21
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Nature and amount of remuneration:
2024
Short-term employee benefits
Post -
employme
nt benefits
Other
long-term
benefits
Equity Performance related
Director
Fees/Salary
$
Company
secretarial, or
other benefits
$
Leave
Accruals
$
Super-
annuation
$
Leave
accruals
$
Performance
Rights
$
Performance
Based
%
Total
$
Directors
R Annells
73,627
-
-
8,290
-
130,452
61.4%
212,369
A Knox
432,667
3,127
45,310
48,898
26,807
228,290
29.1%
785,099
A Wing
59,000
69,025
-
-
-
130,452
50.5%
258,477
TOTAL
565,294
72,152
45,310
57,188
26,807
489,194
1,255,945
2023
Short-term employee benefits
Post -
employment
benefits
Equity Performance related
Director
Fees/Salary
$
Company
secretarial, or
other benefits
$
Leave
Accruals
$
Superannuation
$
Performance
Rights
$
Performance
Based
%
Total
$
Directors
R Annells
43,538
-
-
4,462
130,452
73.1%
178,452
A Knox
260,000
2,608
29,709
27,950
468,290
59.4%
788,557
A Wing
48,000
66,000
-
-
130,452
53.4%
244,452
TOTAL
351,538
68,608
29,709
32,412
729,194
1,211,461
D. Key Management Personnel Equity Holdings
As at 31 December 2024, the interests of the Directors in shares, options and performance rights of the Company were:
Ordinary Shares
Holder
Balance at beginning
of the year
Initial Interest
Achievement of
Milestone
Net change other *
Final Interest
Balance at end of
the year
Robert Annells
20,625,000
-
-
-
-
20,625,000
Andrew Knox
135,067,222
-
120,000,000
432,778
-
255,500,000
Adrien Wing
78,240,111
-
-
-
-
78,240,111
* Net change other includes shares acquired or disposed of during the year.
Page | 22
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Performance Rights
Holder
Balance at beginning
of the year
Granted as
compensation
Rights vested
Rights lapsed
Final Interest
Balance at end of
the year
Robert Annells
100,000,000
-
-
-
-
100,000,000
Andrew Knox
295,000,000 (i)
-
(120,000,000)
-
-
175,000,000
Adrien Wing
100,000,000
-
-
-
-
100,000,000
(i) 120,000,000 Performance Rights were issued following shareholder approval on 15 May 2019 subject to the following vesting
condition:
-
The achievement of production (being production of a saleable quantity) at the Innamincka Dome Project. This
vesting condition was achieved during 2024.
E. Share-based Compensation
Other than the above Performance Rights granted as compensation, there was no share-based compensation granted to key
management personnel.
F. Related party transactions with key management personnel
There were no loans to/from related parties during the year.
G. Additional information
Principles used to determine the nature and amount of remuneration: relationship between remuneration and Company performance.
In considering the Company’s performance and its effect on shareholder wealth, the Board has regard to a broad range of factors, some
of which are financial and others of which relate to the progress on the Company’s projects, results and progress of exploration and
development activities, joint venture agreements, etc.
The Board also gives consideration to the Company’s result and cash consumption for the year. It does not utilise earnings per share as
a performance measure or contemplate payment of any dividends in the short to medium term given that all efforts are currently being
expended to build the business and establish self-sustaining revenue streams.
The earnings of the Group for the five years to 31 December 2024 are summarised below:
2020
2021
2022
2023
2024
$
$
$
$
$
Revenue and other income
97,961
28,415
45,608
472,506
3,000,488
Net profit/(loss) before tax
(1,779,122)
(1,512,352)
(1,675,163)
(1,559,814)
272,410
Net profit/(loss) after tax
(1,779,122)
(1,512,352)
(1,675,163)
(1,559,814)
272,410
The factors that are considered to affect total shareholders return (TSR) are summarised below:
2020
2021
2022
2023
2024
Share price at start of year ($)
0.003
0.002
0.008
0.005
0.005
Share price at end of year ($)
0.002
0.008
0.005
0.005
0.011
Basic earnings/(loss) per share (cents per
share)
(0.10)
(0.03)
(0.03)
(0.03)
0.01
Diluted earnings/(loss) per share (cents per
share)
(0.10)
(0.03)
(0.03)
(0.03)
0.01
END OF AUDITED REMUNERATION REPORT
Page | 23
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company maintained an insurance policy which indemnifies the Directors and Officers of Red Sky Energy
Limited in respect of any liability incurred in connection with the performance of their duties as Directors or Officers of the Company. The
Company’s insurers have prohibited disclosure of the amount of the premium payable and the level of indemnification under the insurance
contract.
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any
related entity against a liability incurred by the auditor. During the financial year, the company has not paid a premium in respect of a
contract to insure the auditor of the company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the court under section 237 of the
Corporations Act 2001.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the Company and/or the Group are important.
There were no non-audit services provided during the year.
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires the consolidated entity's auditor, RSM Australia Partners to provide the directors with
a written Independence Declaration in relation to their audit of the financial report for the year ended 31 December 2024. The written
Auditor's Independence Declaration is attached at page 21 and forms part of this Director's Report.
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
Andrew Knox
Managing Director
28 March 2025
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the annual financial report of Red Sky Energy Limited for the financial year ended
31 December 2024, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
R J MORILLO MALDONADO
Partner
Melbourne, Victoria
Dated: 28 March 2025
Page | 24
Page | 25
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2024
Group
Notes
2024
$
2023
$
Sales revenue
5
2,896,956
357,903
Other income
5
103,532
114,603
Costs of sales
(845,138)
(172,159)
Administration and travel expenses
(481,919)
(392,874)
Employee entitlements
(662,623)
(450,871)
Employee entitlements – share based payments
(521,805)
(821,805)
Legal fees
(12,714)
(20,882)
Corporate advisory and investor relations
(93,117)
(78,110)
Exploration costs expensed
(25,588)
(42,741)
Depreciation
11
(52,032)
(52,878)
Amortisation of oil and gas assets
13
(33,142)
-
Profit/(loss) from continuing operations before income tax
272,410
(1,559,814)
Income tax expense/benefit
7
-
-
Net profit/(loss) for the year
272,410
(1,559,814)
Other comprehensive income
Items that may be reclassified to profit or loss:
Foreign currency translation
-
-
Total comprehensive profit/(loss) for the year, net of tax
272,410
(1,559,814)
Basic and diluted profit/(loss) per share – overall (cents per share)
18
0.01
(0.03)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes to the financial statements.
Page | 26
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Group
Notes
2024
$
2023
$
Current Assets
Cash and cash equivalents
8
2,964,776
2,670,063
Trade and other receivables
9
262,739
259,432
Inventories
10
-
181,983
Prepayments
98,319
97,317
Total current assets
3,325,834
3,208,795
Non-Current Assets
Plant and equipment
11
147,299
199,331
Other financial assets – security deposits
824,633
823,513
Exploration and evaluation assets
12
4,261,607
3,632,035
Oil and gas assets
13
50,215
83,357
Total Non-Current Assets
5,283,754
4,738,236
Total Assets
8,609,588
7,947,031
Current Liabilities
Trade and other payables
14
298,512
595,255
Provisions – employee entitlements
15
162,608
100,977
Total Current Liabilities
461,120
696,232
Non-Current Liabilities
Provisions - rehabilitation
15
800,000
800,000
Provisions – employee entitlements
15
69,684
31,454
Total Non-Current Liabilities
869,684
831,454
Total Liabilities
1,330,804
1,527,686
Net Assets
7,278,784
6,419,345
Equity
Issued share capital
16
50,628,088
50,328,088
Reserves
17
2,434,195
2,147,166
Accumulated losses
(45,783,499)
(46,055,909)
Total Equity
7,278,784
6,419,345
The above consolidated statement of financial position should be read in conjunction with the accompanying notes to the financial
statements.
Page | 27
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 31 December 2024
Group
Notes
2024
$
2023
$
Cash flows from operating activities
Receipts from customers (inclusive of GST)
3,192,872
131,656
Payments to suppliers and employees (inclusive of GST)
(2,365,841)
(945,832)
Interest received
97,254
118,984
Net cash provided by/ (used in) operating activities
19
924,285
(695,192)
Cash flows from investing activities
Exploration and evaluation expenditure
(629,572)
(804,698)
Payments for plant and equipment
-
-
Net cash used in investing activities
(629,572)
(804,698)
Net increase/ (decrease) in cash and cash equivalents
294,713
(1,499,890)
Cash and cash equivalents at the beginning of the financial year
2,670,063
4,169,953
Cash and cash equivalents at the end of the financial year
8
2,964,776
2,670,063
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes to the financial statements.
Page | 28
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Consolidated
2023
Issued Capital
Accumulated Losses
Reserves
Total
(Deficiency)/Equity
Balance at beginning of year
50,328,088
(44,496,095)
1,260,673
7,092,666
Loss for the year
-
(1,559,814)
-
(1,559,814)
Other comprehensive loss for the year
-
-
-
-
Total comprehensive loss for the year
-
(1,559,814)
(1,559,814)
Transactions with equity holders in their capacity
as equity holders
Share based payments - Performance Rights
-
-
886,493
886,493
-
-
886,493
886,493
Balance at the end of the year
50,328,088
(46,055,909)
2,147,166
6,419,345
Consolidated
2024
Issued Capital
Accumulated Losses
Reserves
Total Equity
Balance at beginning of year
50,328,088
(46,055,909)
2,147,166
6,419,345
Profit/(Loss) for the year
-
272,410
-
272,410
Other comprehensive loss for the year
-
-
-
-
Total comprehensive loss for the year
-
272,410
-
272,410
Transactions with equity holders in their capacity
as equity holders
Share based payments - Performance Rights
-
-
587,029
587,029
Performance rights shares issued
300,000
-
(300,000)
-
300,000
-
287,029
587,029
Balance at the end of the year
50,628,088
(45,783,499)
2,434,195
7,278,784
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes to the financial
statements.
Page | 29
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
1. MATERIAL ACCOUNTING POLICY INFORMATION
The material accounting policies adopted in the preparation of the financial report are set out below. These policies have been
consistently applied to all the year presented, unless otherwise stated. The financial report includes separate financial statements for Red
Sky Energy Limited as an individual entity and the consolidated entity consisting of Red Sky Energy Limited and its subsidiaries.
(a)
Basis of Preparation
The financial report is a general-purpose financial report that has been prepared in accordance with Australian Accounting Standards and
Interpretations and the Corporations Act 2001. Red Sky Energy Limited and its subsidiaries (the Group) is a for-profit entity for the
purpose of preparing the financial statements.
Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently
applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or
Interpretations that are not yet mandatory have not been early adopted.
(i) Compliance with IFRSs
Australian Accounting Standards include Australian Equivalents to International Financial Reporting Standards (AIFRs). Compliance with
AIFRSs ensures that the financial report of the Group complies with International Financial Reporting Standards (IFRSs).
(ii) Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies (refer note 3).
(iii) Going Concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the
recognition and settlement of liabilities in the normal course of business. As disclosed in the financial statements, the consolidated entity
earned a profit of $272,410 (2023: loss of $1,559,814) and had net cash inflow from operating activities of $924,285 (2023: outflow of
$695,192) for the year ended 31 December 2024. As at that date the consolidated entity had net current assets of $2,864,714 and net
assets of $7,278,784.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report on the basis that the entity has prepared a cash flow
forecast for the next 12 months which allows for future expenditure to be paid from existing cash reserves.
(b)
Parent Entity Information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 25.
Page | 30
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
1. MATERIAL ACCOUNTING POLICY INFORMATION
(c)
Principles of Consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Red Sky Energy Limited (“Company” or
“parent entity”) as at 31 December 2024 and the results of all subsidiaries for the year then ended. Red Sky Energy Limited and its
subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all those entities (including special purpose entities) over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date that control ceases. Inter-Company transactions, balances and recognised gains on
transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of
the impairment of the asset transferred. Accounting policies of subsidiaries are consistent with the policies adopted by the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Red Sky Energy Limited.
(ii) Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures
depending on the contractual rights and obligations each investor has, rather than the legal structure of the joint arrangement. The Group
has assessed the nature of its joint arrangements and concluded that the correct classification is ‘joint operations’.
The proportionate interests in the assets, liabilities, income and expenditure of joint operations have been incorporated in the financial
statements under the appropriate headings.
(d)
Segment reporting
The Group currently operates in the oil and gas industry. Refer to Note 4 for details.
(e)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably
measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of gas and liquids is recognised at the point of sale (Sales point ex the gate at Moomba for the Innamincka project), which is where
the customer has taken delivery of the goods, the risks and rewards are transferred to the customer and there is a valid sales contract.
Amounts disclosed as revenue are net of sales returns and trade discounts.
Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired, the Group
reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest
rate of the instrument and continues unwinding the discount as interest income.
(f)
Foreign currency translation
The financial statements are presented in Australian dollars, which is the Group's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate
the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when
the foreign operation or net investment is disposed of.
Page | 31
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
1. MATERIAL ACCOUNTING POLICY INFORMATION
(g)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less allowance for doubtful debts.
Trade receivables are due for settlement between thirty (30) and ninety (90) days from the date of recognition.
(h)
Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis to write off the net cost of each item of
property, plant and equipment (excluding land) over their expected useful lives as follows:
Computer equipment
3 years
Motor vehicles
8 years
Plant and equipment
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
(i)
Inventories
Inventories are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises direct materials and delivery
costs, direct labour, import duties and other taxes, and an appropriate proportion of variable and fixed overhead expenditure based on
normal operating capacity. The cost of purchased inventory is determined after deducting rebates and discounts received or receivable.
(j)
Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is either written off as incurred or accumulated in respect of each
identifiable area of interest. Costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the
existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the
area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to that area of interest.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to
the rate of depletion of the economically recoverable reserves. Restoration, rehabilitation and environmental costs necessitated by
exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure. Proceeds from the
sale of exploration permits or recoupment of exploration costs from farm-in arrangements are credited against exploration costs previously
capitalised. Any excess of the proceeds over costs recouped are accounted for as a gain on disposal.
(k)
Oil and Gas assets
Capitalised oil and gas development costs include expenditures incurred to develop new oil or gas fields or to expand the capacity of a
field and to maintain production. Development costs also include costs transferred from exploration and evaluation phase once production
commences in the area of interest.
Amortisation of oil and gas development costs is computed by the units of production basis over the estimated proved and probable
reserves. Proved and probable oil and gas reserves reflect estimated quantities of economically recoverable reserves which can be
recovered in the future from known fields. These reserves are amortised from the date on which production commences. The amortisation
is calculated from recoverable proven and probable reserves.
Restoration costs expected to be incurred are provided for as part of the development phase that give rise to the need for restoration.
(l)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year, which remain
unpaid at year end. The amounts are unsecured and are usually paid within 60 days of recognition. They are recognised at fair value on
initial recognition and subsequently at amortised cost.
Page | 32
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
(m)
Contributed Equity
Issued and paid-up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on
the issue of ordinary shares are recognised directly in equity as a reduction, net of tax, of the share proceeds received.
(n)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after-income
tax effect of interest and other financing costs associated with dilutive potential ordinary share and the weighted average number of
shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(o)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
(p)
Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services
rendered to the reporting date, when it is probable that settlement will be required, and they are capable of being measured reliably. The
calculation of employee benefits includes all relevant on-costs and is calculated as follows at the reporting date.
(i) Wages and Salaries, Annual Leave and Long Service Leave
Provisions made in respect of employee benefits are measured based on an assessment of the existing benefits to determine the
appropriate classification under the definition of short term and long-term benefits, placing emphasis on when the benefit is expected to be
settled. Short-term benefits provisions that are expected to be settled within 12 months are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Long-term benefits are not expected to be wholly settled within 12 months and consequently are measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. Consideration
is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date to estimate the future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money.
Regardless of the expected timing of settlement, provisions made in respect of employee benefits are classified as a current liability
unless there is an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date, in which case it
would be classified as a non-current liability. Provisions made for annual leave and unconditional long service leave are classified as a
current liability where the employee has a present entitlement to the benefit. A non-current liability would include long service leave
entitlements accrued for employees with less than 10 years of continuous service who do not yet have a present entitlement.
(ii) Accumulated superannuation contribution plans
Obligations for contributions to accumulated superannuation contribution plans are recognised as an expense as incurred.
(p) Share Based Payments
The Group may at times provide benefits to employees (including directors) and consultants of the Group in the form of share-based
payment transactions, whereby employees and consultants render services in exchange for shares or rights over shares (‘equity-settled
transactions’). The cost of these equity-settled transactions with employees and consultants is measured by reference to the fair value at
the date at which they are granted. The fair value is determined using the Black & Scholes or Monte-Carlo simulation methods. The cost
of equity-settled transactions is recognised, together with a corresponding increase in equity over the year in which the performance
conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which
the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest. This
opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date. No expense is recognised
for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.
Page | 33
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the
date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification
of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share.
(q) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of
three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
(r) Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by
the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements and are recognised for all taxable temporary differences:
➢
Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
➢
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, except where the timing of the reversal of the temporary differences can be controlled, and it is probable that the
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax
losses can be utilised:
➢
Except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor the taxable profit or loss; and
➢
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests and joint
ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in
the foreseeable future extent that it is probable that the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.
(s) Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
.
Page | 34
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
2. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables, cash and short-term deposits. The Group manages its
exposure to key financial risks in accordance with the Group’s financial risk management policy. The objective of the policy is to support
the delivery of the Group’s financial targets while protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, credit risk and liquidity risk. The Group does not
speculate in the trading of derivative instruments. The Group uses different methods to measure and manage different types of risks to
which it is exposed. These include monitoring levels of exposure to interest rates and assessments of market forecasts for interest rates.
Ageing analysis of and monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored through the development
of future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for identification
and control of financial risks rests with the Board. The Board reviews and agrees policies for managing each of the risks identified below,
including for interest rate risk, credit allowances and cash flow forecast projections.
Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in note
1 to the financial statements.
Risk Exposures and Responses
Market Risk
Interest rate risk
The Group’s exposure to risks of changes in market interest rates relates primarily to the Group’s cash balances. The Group constantly
analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative
financing positions and the mix of fixed and variable interest rates. As the Group has no interest-bearing borrowings its exposure to
interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits.
At reporting date, the Group had the following financial assets exposed to variable interest rates not designated in cash flow hedges:
Group
2024
$
2023
$
Security deposits
24,633
23,755
Cash and cash equivalents (interest-bearing accounts)
2,964,776
2,670,063
Net exposure
2,989,409
2,693,818
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date. At the reporting date, if
interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity relating to
financial assets of the Group would have been affected as follows:
Judgments of reasonably possible movements:
Post tax profit – higher / (lower)
+ 0.5%
14,947
13,469
- 0.5%
(14,947)
(13,469)
Equity – higher / (lower)
+ 0.5%
14,947
13,469
- 0.5%
(14,947)
(13,469)
Page | 35
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
2. FINANCIAL RISK MANAGEMENT
Commodity Price and Foreign Currency Risk
The Group’s exposure to commodity price is minimal at present.
Foreign currency risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a
currency that is not the entity’s functional currency. The risk is measured, monitored and managed using cash flow forecasting. The
consolidated entity does not enter into any hedging contracts. The carrying amount of the consolidated entity’s foreign currency
denominated financials assets and financial liabilities the reporting date was minimal.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be
predicted, such as natural disasters.
The financial liabilities the Group had at reporting date were trade payables incurred in the normal course of the business. Trade payables
were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting
date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Group
Less
than 1
month
$
1 - 3
months
$
3 months
- 1 year
$
1 - 5
years
$
5+
years
$
Total
contractual
cash flows
$
Carrying
amount
$
As at 31 December 2024
Non-interest bearing
Trade and other payables
298,512
-
-
-
-
298,512
298,512
As at 31 December 2023
Non-interest bearing
Trade and other payables
595,255
-
-
-
-
595,255
595,255
Credit risk
Credit risk arises from the financial assets of the Group, which comprise deposits with banks, security deposits and trade and other
receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to
the carrying amount of these instruments. The carrying amount of financial assets included in the consolidated statement of financial
position represents the Group’s maximum exposure to credit risk in relation to those assets. The Group does not hold any credit
derivatives to offset its credit exposure.
The Group trades mainly with recognised, credit worthy third parties and as such collateral is not requested nor is it the Group’s policy to
securities its trade and other receivables. Receivable balances are monitored on an ongoing basis with the result that the Group does not
have a significant exposure to bad debts.
There are no other significant concentrations of credit risk within the Group.
Page | 36
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
2. FINANCIAL RISK MANAGEMENT
Capital Management Risk
Management controls the capital of the Group in order to maximise the return to shareholders and ensure that the Group can fund its
operations and continue as a going concern.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of expenditure, debt levels and share
and option issues.
There have been no changes in the strategy adopted by management to control capital of the Group since the prior year.
3. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
(i) Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and
equipment and oil and gas assets. The useful lives could change significantly as a result of technical innovations or some other event. The
depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete
or non-strategic assets that have been abandoned or sold will be written off or written down.
(ii) Exploration expenditure
Exploration expenditure that does not form part of the cash generating units assessed for impairment has been carried forward on the
basis that exploration and evaluation activities have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing. In the event
that significant operations cease and/or economically recoverable reserves are not assessed as being present, this expenditure will be
expensed to the Income Statement.
(iii) Rehabilitation provision
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or used in production. The
consolidated entity's production and exploration activities are subject to various laws and regulations governing the protection of the
environment. The consolidated entity recognises management's best estimate for assets retirement obligations and site rehabilitations in
the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally,
future changes to environmental laws and regulations, life of field estimates and discount rates could affect the carrying amount of this
provision.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
(iv) Revenue from contracts with customers involving sale of goods
When recognising revenue in relation to the sale of goods to customers, the key performance obligation of the consolidated entity is
considered to be the point of delivery of the goods to the customer, as this is deemed to be the time that the customer obtains control of
the promised goods and therefore the benefits of unimpeded access.
(v) Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking
into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to
equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual
reporting period but may impact profit or loss and equity.
Page | 37
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
4. SEGMENT REPORTING
The Group operated predominantly as an explorer with the view to identify attractive oil and gas deposits of sufficient scale to provide
sustainable returns to shareholders.
The directors do not believe that there are any reportable segments that meet the requirements of Accounting Standard AASB 8 Segment
Reporting, on the basis that the chief operating decision maker, being the Board of Directors, review geological results and other
qualitative measures as a basis for decision making. Financial results are reviewed on a consolidated group basis.
Types of products and services
The Group currently has significant revenue from gas and liquids sales.
Major customers
The Group has no reliance on major customers.
Geographical areas
The Group’s production and exploration assets were located in Australia during the year ended 31 December 2024.
5. REVENUE AND OTHER INCOME
Group
2024
$
2023
$
Sales revenue
Sales of gas and liquids
2,896,956
357,903
Total
2,896,956
357,903
All revenue is earned in Australia and recognised at a point in time.
Other income
Interest income calculated using the effective interest method
103,532
114,603
Total
103,532
114,603
6. EXPENSES
Group
Loss from continuing operations before income tax has been determined after including
payroll related expenses as follows:
2024
$
2023
$
Directors and employee superannuation
39,885
24,563
Directors and employee leave entitlements
99,861
48,023
Page | 38
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
7. INCOME TAX
Group
2024
$
2023
$
The prima facie income tax benefit on pre-tax accounting loss from operations reconciles
to the income tax benefit in the financial statements as follows:
Profit/(loss) before tax
272,410
(1,559,814)
Income tax benefit calculated at 25% (2023: 30%)
68,103
(467,944)
Effect of expenses that are not deductible in determining taxable profit
150,331
259,226
Prior years tax losses recognised
(218,434)
-
Temporary differences and tax losses in the current year for which no deferred tax asset has been
brought to account
-
208,718
Income tax benefit
-
-
Deferred tax assets:
Deferred tax assets not brought to account arising from temporary differences and tax losses, the
benefits of which will only be realised if the conditions for deductibility set out in Note 1(t) occur:
7,824,791
9,042,744
8. CASH AND CASH EQUIVALENTS
Group
2024
$
2023
$
Cash at bank
2,964,776
2,670,063
9. TRADE AND OTHER RECEIVABLES
Group
Current
2024
$
2023
$
Trade debtors
171,429
-
Accrued income
75,732
238,225
Other receivables
15,578
21,207
Total
262,739
259,432
There is no expected credit losses or bad debt provision.
Page | 39
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
10. INVENTORIES
Group
Current
2024
$
2023
$
Gas and liquids
-
181,983
11. PLANT AND EQUIPMENT
Group
Non-Current
2024
$
2023
$
Plant and equipment
278,710
278,710
Less: Accumulated depreciation
(131,411)
(79,379)
147,299
199,331
Reconciliations of movements:
Opening balance
199,331
252,209
Additions
-
-
Depreciation expense
(52,032)
(52,878)
Closing Balance
147,299
199,331
12. EXPLORATION AND EVALUATION ASSETS
Group
2024
$
2023
$
Opening balance
3,632,035
2,738,031
Additions
629,572
977,361
Transfer to Oil and Gas assets (Note 13)
-
(83,357)
4,261,607
3,632,035
13. OIL AND GAS ASSETS
Group
2024
$
2023
$
Opening balance
83,357
-
Innamincka costs transferred from Exploration and Evaluation assets (Note 12)
-
83,357
Amortisation of oil and gas assets
(33,142)
-
50,215
83,357
Page | 40
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
14. TRADE AND OTHER PAYABLES
Group
2024
$
2023
$
Trade creditors
55,760
110,812
Accrued expenses
224,324
484,443
Other payables
18,428
-
298,512
595,255
15. PROVISIONS
Group
2024
$
2023
$
Current
Annual leave entitlements
162,608
100,977
Non-Current
Long service leave entitlements
69,684
31,454
Rehabilitation
800,000
800,000
869,684
831,454
16. ISSUED CAPITAL
(a) Share Capital
Group
2024
$
2023
$
5,422,227,197 fully paid ordinary shares (31 December 2023: 5,302,227,197)
50,628,088
50,328,088
On 9 February 2024, 120,000,000 shares valued at $300.000 were issued to Mr Andrew Knox following the achievement of production
(being production of a saleable quantity) at the Innamincka Dome Project. This was a vesting condition of Performance Rights issued
following shareholder approval on 15 May 2019.
No other movements occurred during the year.
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value, and the company does not have a
limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
Page | 41
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
16. ISSUED CAPITAL (continued)
(b) Options
No Options were issued during the year:
(c) Performance Rights
The following table sets out the movements in Performance Rights during the year:
Grant Date
Expiry Date
Fair Value
per Right
(cents)
Amount
expensed
during 2024 $
Recipients
Number on issue
at beginning of
the year
Vested during
the year
Number on issue
at year end
10/6/2021
9/6/2026
0.70
586,493
Directors,
Employees and
Consultants
450,000,000
-
450,000,000
Total
586,493
450,000,000
-
450,000,000
Performance Rights were issued to directors following shareholder approval and others on 10 June 2021 (Mr Andrew Knox 175,000,000,
Mr Robert Annells 100,000,000 and Mr Adrien Wing 100,000,000, Employees 50,000,000 and Consultants 50,000,000). The Performance
Rights issued were subject to the following vesting conditions:
-
The Company achieving a market capitalisation of equal to or greater than $100 million for 5 consecutive trading days within 5
years; and
-
The recipient remaining continuously employed or engaged up to the date of satisfaction of the market capitalisation vesting
condition.
These Performance Rights are being expensed over the 5-year term up to the expiry date.
The fair value of the Performance Rights granted is estimated using a trinomial model taking into account the terms and conditions upon
which the Performance Rights were granted. The model inputs used an expected volatility of 81%, and a share price at the grant date of
0.8 cents.
There were also long-term incentives to receive 30,000,000 Shares issued during 2018 to Mr Andrew Knox in 3 tranches of 10,000,000
each subject to the following vesting conditions:
-
Tranche 1: The volume weighted average price (VWAP) of the Company’s shares over 14 consecutive days on which trades in
the Company’s shares are recorded meets or exceeds 0.6 cents. Tranche 1 was achieved during 2021.
-
Tranche 2: The VWAP of the Company’s shares over 14 consecutive days on which trades in the Company’s shares are
recorded meets or exceeds 1.2 cents. Tranche 2 was agreed to be cancelled during 2021.
-
Tranche 3: The VWAP of the Company’s shares over 14 consecutive days on which trades in the Company’s shares are
recorded meets or exceeds 2.4 cents. Tranche 3 was agreed to be cancelled during 2021.
Page | 42
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
17. RESERVES
Nature and purpose of reserves:
Share based payments reserve records the value of options and performance rights issued which have been taken to expenses.
Foreign currency translation reserve recognises exchange differences arising from translation of the financial statements of foreign
operations to Australian dollars.
18. EARNINGS PER SHARE
Group
2024
$
2023
$
Net profit/(loss)
272,410
(1,559,814)
Calculation of basic and dilutive EPS – continued operations (cents)
0.01
(0.03)
Weighted average number of ordinary shares outstanding during the year used in calculation of basic
EPS
Number
5,409,440,312
Number
5,302,227,197
Weighted average number of ordinary shares outstanding during the year used in calculation of
dilutive EPS
Number
5,859,440,312
Number
5,302,227,197
Group
2024
$
2023
$
Share based payments reserve
2,429,448
2,142,419
Foreign currency translation reserve
4,747
4,747
2,434,195
2,147,166
Opening balance
2,147,166
1,260,673
Movements during the year:
-
-
Performance rights shares issued
(300,000)
-
Share based payments – performance rights
587,029
886,493
2,434,195
2,147,166
Page | 43
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
19. CASH FLOW INFORMATION
Reconciliation of cash flow from operations with profit/ (loss) from continuing operations after income tax:
GROUP
2024
$
2023
$
Profit/ (loss) after income tax
272,410
(1,559,814)
Non-cash flows in loss:
Share based payments
587,029
886,493
Depreciation
52,032
52,878
Amortisation of exploration assets
33,142
-
Changes in assets and liabilities:
(Decrease)/increase in trade creditors and accruals
(315,171)
275,776
(Decrease)/increase in provisions
99,861
48,024
(Increase)/decrease in trade and other receivables
14,001
(218,821)
(Increase)/decrease in inventories
181,983
(181,983)
(Increase)/decrease in prepayments
(1,002)
2,255
Cash flows provided by/ (used in) operating activities
924,285
(695,192)
Page | 44
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
20. RELATED PARTY TRANSACTIONS
(a) Parent entity
Red Sky Energy Ltd is the parent entity.
(b) Key management personnel
Disclosures in relation to key management personnel are set out in Note 21 and the Remuneration Report in the Directors’ Report.
(c) Transactions with related parties
Directors and officers, or their personally related entities, did not provide any services other than as disclosed in the Remuneration Report.
(d) Loans to/from related parties
None.
(e) Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
(f) Controlled entities
Ownership Interest
Country of Incorporation
2024
%
2023
%
Red Sky NT Pty Ltd
Australia
100
100
Red Sky Killanoola Pty Ltd
Australia
100
100
Red Sky Gold Nugget LLC
United States
100
100
Red Sky Angola Limited
British Virgin Islands
95
-
Page | 45
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
21. KEY MANAGEMENT PERSONNEL DISCLOSURES
Details of the names and positions of key management personnel and their remuneration are provided in the remuneration report in the
Directors’ Report. Summary disclosures are as follows:
Group
Key Management Personnel Compensation
2024
$
2023
$
Short-term employee benefits
682,756
449,855
Post employment benefits
57,188
32,412
Other long-term benefits
26,807
-
Share-based payments
489,194
729,194
Total
1,255,945
1,211,461
22. REMUNERATION OF AUDITORS
GROUP
2024
$
2023
$
Amounts received or due and receivable by RSM Australia Partners for:
Audit and audit review services
52,190
47,809
23. COMMITMENTS AND CONTINGENCIES
The consolidated entity has no commitments or contingencies.
24. EVENTS SUBSEQUENT TO BALANCE DATE
No matters or circumstances have arisen since 31 December 2024 that have significantly affected, or may significantly affect the group’s
operations, the results of those operations, or the group’s state of affairs in future financial years.
Page | 46
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2024
25. PARENT ENTITY DISCLOSURES
(a) Summary financial information
Parent
2024
$
2023
$
Financial Position
Assets
Current assets
3,078,673
3,208,795
Non-current assets
5,283,754
4,738,236
Total assets
8,362,427
7,947,031
Liabilities
Current liabilities
414,620
696,232
Non-current liabilities
2,720,841
831,454
Total liabilities
3,135,461
1,527,686
Net assets
5,226,966
6,419,345
Equity
Issued share capital
50,328,088
50,328,088
Share based payments reserve
2,729,448
2,142,419
Accumulated losses
(47,830,570)
(46,051,162)
Total equity
5,226,966
6,419,345
Financial Performance
Loss for the year
(1,779,408)
(1,559,814)
Other comprehensive income
-
-
Total comprehensive income
(1,779,408)
(1,559,814)
(b) Guarantees
Red Sky Energy Limited has not entered into any guarantees in relation to the debts of its subsidiaries.
(c) Other Commitments and Contingencies
Red Sky Energy Limited has no commitments to acquire property, plant and equipment, and has no contingent liabilities.
Page | 47
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
For the year ended 31 December 2024
Name of entity
Country of Incorporation
Taxi Residency
Equity holding
%
2024
Equity holding
%
2023
Red Sky Energy
Australia
Australia
n/a
n/a
Red Sky Gold Nugget LLC
United States
Unites States
100
100
Red Sky NT Pty Ltd
Australia
Australia
100
100
Red Sky Killanoola Pty Ltd
Australia
Australia
100
100
Red Sky Angola Limited
British Virgin Islands
British Virgin Islands
95
-
Page | 48
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
DIRECTORS’ DECLARATION
In the directors’ opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
●
the consolidated entity disclosure statement on page 47 is true and correct;
●
the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position as at 31
December 2024 and of its performance for the financial year ended on that date; and
●
the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position as at 31
December 2024 and of its performance for the financial year ended on that date; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors:
Andrew Knox
Managing Director
Melbourne, Victoria
28 March 2025
INDEPENDENT AUDITOR’S REPORT
To the Members of Red Sky Energy Limited
Opinion
We have audited the financial report of Red Sky Energy Limited (‘the Company’) and its subsidiaries (together
‘the Group’), which comprises the consolidated statement of financial position as at 31 December 2024, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the financial year then ended, and notes to
the financial statements, including material accounting policy information, the consolidated entity disclosure
statement and the directors' declaration.
In our opinion, the accompanying financial report of Red Sky Energy Limited is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group's financial position as at 31 December 2024 and of its
financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Page | 49
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed this matter
Revenue Recognition
Refer to Note 5 to the financial statements
During the year ended 31 December 2024, the
Group
incurred
revenue
amounting
to
$2,896,956 relating to the sale of gas and liquid
commodities.
We have assessed this to be a Key Audit
Matter because it is the most significant
account balance in the consolidated statement
of profit or loss and other comprehensive
income; and giving consideration that the
Group is still on early stages of producing
saleable output and recognised income.
Our audit included the following procedures:
•
Assessing whether the Group’s revenue recognition
policies
were
in
compliance
with
Australian
Accounting Standard AASB 15 Revenue from
Contracts with Customers;
•
Gathering and updating our understanding of the
Group’s
revenue
transaction
cycle,
including
performing walkthrough testing;
•
Testing a sample of revenue transactions to
supporting documentation and ensuring these
transactions were recognised in accordance with the
Group’s accounting policies; and
•
Requesting and corroborating data to the production
reports to ensure an appropriate amount of revenue
has been recognised.
Carrying value of Exploration and Evaluation assets
Refer to Note 12 to the financial statements
As at 31 December 2024, the carrying value of
the Group’s Exploration and evaluation assets
amounted to $4,261,607 (approx. 50% of the
Group’s total assets). We assessed this to be
a Key Audit Matter because of the materiality
of the balance at the reporting date and due to
the significant management judgment involved
in assessing the carrying value in accordance
with AASB 6 Exploration for and Evaluation of
Mineral Resources, including:
•
Assessing
whether
the
capitalised
exploration expenditure meets the criteria
of being capitalised in accordance with
AASB 6; and
•
Assessing whether any indicators of
impairment are present, and if so, to
quantify any impairment loss.
Our audit procedures in relation to the carrying value of
Exploration and evaluation assets included:
•
Reviewing the Group’s accounting policy and criteria
recognition
of
capitalisation
of
exploration
expenditure and assessed whether it is in line with
AASB 6;
•
Agreeing a sample of the additions to capitalised
Exploration and evaluation asset during the year to
supporting documentation, and ensuring that these
meet the Group’s accounting policy;
•
Reviewing
management’s
assessment
of
impairment indicators, including assessing the
reasonableness of their conclusions;
•
Ensuring that the right to tenure of the areas of
interest was current through confirmation with the
relevant government departments; and
•
Assessing the reasonableness of the basis on which
it was determined that
exploration activities
associated
with
the
Innamincka
mine
have
progressed to the point where the existence or
otherwise of an economically recoverable mineral
resource has been determined.
Page | 50
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company's annual report for the year ended 31 December 2024; but does not include the
financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a.
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b.
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001,
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Page | 51
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 22 of the annual report for the year
ended 31 December 2024.
In our opinion, the Remuneration Report of Red Sky Energy Limited for the year ended 31 December 2024,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
R J MORILLO MALDONADO
Partner
Melbourne, Victoria
Dated: 28 March 2025
Page | 52
Page | 53
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
SHAREHOLDER INFORMATION
TWENTY LARGEST SHAREHOLDERS
SHAREHOLDERS (Fully Paid Ordinary) 20 March 2025
NUMBER OF
SHARES
Percentage
MR GEORGE SPIROS PAPACONSTANTINOS
344,412,893
6.35
ABACUS ENTERPRISES PTY LTD
255,067,222
4.70
MR LUKE CARLO ROSSI
207,517,545
3.83
MR GEORGE SPIROS PAPACONSTANTINOS
117,548,170
2.17
CITICORP NOMINEES PTY LIMITED
97,579,490
1.80
MR BRETT PARTRIDGE & MRS CHRISTINE JOANNE PARTRIDGE
79,367,227
1.46
PARTRIDGE & CLEVEN PTY LTD
75,645,300
1.40
MR BRETT PARTRIDGE & MRS CHRISTINE JOANNE PARTRIDGE
75,388,331
1.39
MR MICHAEL HOUGH
75,000,000
1.38
MJG APEXN PTY LTD
67,000,000
1.24
NORTHERN STAR NOMINEES PTY LTD
66,646,111
1.23
FINLAYSON INVESTMENTS PTY LTD
65,822,114
1.21
MR MARK JOHN WARD
50,400,000
0.93
MR GREGORY JAMES SERATO
48,050,000
0.89
SELLICKS BEACH PTY LTD
40,500,000
0.75
MR PETER DAVID AMOS
33,000,000
0.61
BIT NOMINEES PTY LTD
30,000,000
0.55
BNP PARIBAS NOMS PTY LTD
29,949,609
0.55
MR SEONG YUN KANG
29,491,001
0.54
MR ARTHUR BROMIDIS
28,000,000
0.52
TOP 20 SHAREHOLDERS
1,816,385,013
33.50
TOTAL ISSUED SHARES
5,422,227,197
100.00
Distribution schedule of the number of fully paid ordinary shareholders in each class of equity security as at 20 March 2025.
By Class
Holder of Ordinary shares
Number of Ordinary shares
Percentage
1 – 1,000
592
278,582
0.01
1,001 - 5,000
562
1,420,184
0.03
5,001 – 10,000
175
1,361,400
0.03
10,001 – 100,000
1,508
91,323,519
1.68
100,001 and over
2,736
5,327,843,512
98.25
Totals
5,573
5,422,227,197
100.00
Page | 54
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
ADDITIONAL SHAREHOLDER INFORMATION
A. CORPORATE GOVERNANCE
Refer to the Company’s Corporate Governance Statement at www.redskyenergy.com.au
B. SHAREHOLDING
1.
Substantial Shareholders
George Spiros Papaconstantinos
461,961,063 shares
8.52% voting power
There are no other substantial shareholders recorded.
2.
Unquoted Securities
There are no unlisted Options present.
3.
Number of holders in each class of equity securities and the voting rights attached.
At the general meeting, every ROG shareholder present in person or by proxy, representative or attorney has one vote on a show of
hands and on a poll, one vote for each share (which is fully paid). There are 6,320 holders of fully paid ordinary shares.
4.
Marketable parcel
There were 327 Shareholders with less than a marketable parcel as at 20 March 2025.
C. EXPLORATION PROJECTS
1.
Australian interests
Project
Interest owned %
Innamincka Dome, South Australia
PRL 14
20.00
Innamincka Dome, South Australia
PRL 17
20.00
Innamincka Dome, South Australia
PRL 18
20.00
Innamincka Dome, South Australia
PRL 180
20.00
Innamincka Dome, South Australia
PRL 181
20.00
Innamincka Dome, South Australia
PRL 182
20.00
Killanoola, South Australia
PRL 13
100.00
2.
Angola interests
Project
Interest owned %
Kwanza Basin
Block 6/24
35.00
Page | 55
Red Sky Energy Ltd
For the year ended 31/12/2024
ABN 94 099 116 275
D. OTHER DETAILS
1.
Company Secretaries
Mr Adrien Wing
Ms Pauline Moffatt
2.
Address and telephone details of the entity’s registered and administrative office
The address and telephone details of the registered and administrative office:
Level 2, 480 Collins Street
Melbourne VIC 3000
Telephone: + (61) 03 9614 0600
Facsimile: + (61) 03 9614 0550
3.
Address and telephone details of the office at which a register of securities is kept
The address and telephone number of the office at which a registry of securities is kept:
XCEND
Level 2, 477 Pitt St
Haymarket NSW 2000
Telephone: +61 (2) 7208-8033
4.
Stock exchange on which the Company’s securities are quoted
The Company’s listed equity securities are quoted on the Australian Stock Exchange.
5.
Restricted Securities
The Company has no restricted securities on issue.