red sky energy limited september 2015 strictly private & confidential

Red Sky Energy Limited

September 2015Strictly Private & Confidential

Red Sky Energy (ASX:ROG) 2

Introduction – Red Sky Energy Limited 3

Expertise 4

Red Sky Energy Difference 5

Opportunity 6

Opportunity – Investment Methodology 7

Owned and Optioned 8

Risk Management 9

Technical Partners 10

Directors 11

Advisors 12

Contact 13

Disclaimer 14

www.redskyenergy.com.au

Table of Contents


• Red Sky Energy Limited, is an Australian Listed Oil & Gas Acquisition and Development Company (ASX:ROG) that acquires, drills and develops onshore North American Oil & Gas resources that can be produced conventionally using proven advanced technologies and developed best practice methods. Red Sky Energy’s primary asset concentration is in Oil & Gas reserves in North America, focusing on cash-on-cash returns driven by a conservative valuation methodology and achieving operational efficiencies.

• As a listed Australian company with a North American Oil & Gas focus, Red Sky Energy is uniquely positioned to take advantage of the current decline in the oil price. With one very exciting asset already acquired and several others currently under investigation, Red Sky Energy will very quickly develop into a good sized mid cap company with healthy in ground reserves as well as profitable Oil & Gas production output.

• Red Sky Energy has assembled a team with a demonstrated track record of excellent operational execution in the development and operation of Oil & Gas fields in United States. This is a team who has a proven track record and experience to analyse and evaluate these acquisitions whilst taking full advantage of any new technological advances in the Oil & Gas sector.

• The strategy is to acquire existing producing Oil & Gas fields where there is significant upside from continued development and modifications. Further, the objective is to access opportunities without being involved in a direct bid process. Red Sky Energy’s key market differentiator lies in its strong team and well credentialed team of Directors and Management who have over 100 years combined experience in locating, evaluating and developing Oil & Gas interests in mainland USA. Red Sky Energy’s focus will be acquiring underexploited assets in existing Oil & Gas fields and using modern-day technology to enhance production.


Introduction

Red Sky Energy (ASX:ROG) 4www.redskyenergy.com.au

ExpertiseRed Sky Energy is a unique company offering an investor a high return on investment with development expertise in North America providing conventional funding facilities in the market.

Investment Development Management

Oil & Gas Financing• Red Sky Energy is

financing via managed accounts, Onshore Oil & Gas fields in North America using conventional structures

• We are managing these SPV’s on behalf of institutional and high-net worth investors

• Our partners have extensive experience of developing Onshore Oil & Gas Fields across North America

• Our investment products are a result of our development analysis and experience through past transactions, increasing our market knowledge of the Onshore Oil & Gas market

• Together with our partners we have over 100 years of development and Management experience in Oil & Gas Fields. We have a proven track record in development and have delivered numerous successful and profitable projects.


• Our experience and understanding of North American Oil & Gas allows us to apply an entrepreneurial approach to acquiring distressed assets with our primary focus on growing the profitability and production of the acquired oil fields.

• We offer a blend of Senior Funding (debt) and Equity (with priority returns) providing our investors with a 1st legal charge over the asset whilst filling a gap in the market which is currently empty.

• Our in-house resources and external partners enable us to physically manage risk, which is unique as we are able to step-in and complete projects as and if required

• Our experience and proven track record in the Oil & Gas sector gives us access to a solid pipeline, with the ability to evaluate multiple deals per month.

• Our team has over a 100 years of combined experience in major Oil & Gas projects in the United States. An oil field doesn’t run itself, so having the direct infield experience is the difference that sets our team apart. We believe that we have a more thorough understanding of reserves and production than any Asset Manager in the Oil & Gas sector today.

• Our knowledge and experience is in the field, not in the board room.

• Red Sky Energy has a pipeline of proprietary North American opportunities. While opportunities for Red Sky Energy may be generated via asset divestitures and portfolio adjustments by larger companies, Red Sky Energy believe that many smaller E&P companies, which own and operate Oil & Gas assets are a profitable opportunity. They will continue to be constrained by the any one of the following; current oil price, high levels of debt and decreased access to capital. Red Sky Energy will continue to benefit from proprietary access to attractive acquisition and strategic partnership opportunities by being funded now and being able to take advantage of this current downturn situation in the Oil & Gas industry.


Red Sky Energy Difference


• Recent technological advances in the production of Oil & Gas assets have dramatically increased exploitable reserves. A portfolio of opportunities are available and with combined managerial experience, can be expected to produce better than industry average returns with a target cash-on-cash minimum return of 20% per annum.

• Red Sky Energy has chosen Texas, the Mid-Continent and the Rocky Mountain regions as the initial areas of concentration since they are active Oil & Gas markets in which the team has a significant network and successfully operated assets within which numerous acquisition strategic partnership opportunities arise frequently. Many of these existing producing fields have technical characteristics within their target parameters, using new technologies in older fields to define and produce “hidden” value not exploited by the current owner. Red Sky Energy believes that this knowledge can lead to the acquisition of cheap options on substantial assets of oil in the ground.

Red Sky Energy has the following criteria to develop its business model:

• Acquire and exploit strong legacy assets with solid proved reserves (Oil and Liquid Rich Gas) with significant reserves of production upside. Focus on legacy conventional oil fields with significant remaining oil in place that can be enhanced through using technologies utilised in unconventional reservoirs;

• Identify exploitable volume upside from operational improvements on existing production and field development activities from drilling/down spacing, horizontal drilling, re-completions, reconfiguring/expanding water and polymer floods, LOE reduction and fracking;

• Acquire opportunities where Red Sky Energy will be the operator; and

• Acquire opportunities where Red Sky Energy expects to have a minimum IRR of 20%.


Opportunity


Investment Methodology

• Red Sky is looking to form Joint Ventures with investors to acquire Oil & Gas fields that are currently producing and have some or all of the above-mentioned characteristics. Once having been screened by the group and shown to fit into the investment criteria, including having an IRR of no less than 20%, a SPV will be established to acquire the asset, which will be owned by both Red Sky and the Investor. Red Sky is looking to have the project funded along the following lines:

• Investor will receive preferential payback of distribution

• Investor will receive an agreed upon per annum interest rate on the full amount invested

• Once initial investment; plus interest has been fully repaid the distribution reverts to actual percentage ownership

• Red Sky will manage and operate all projects


Opportunity – Investment Methodology


Owned and OptionedLocation Description

Equity Required

InvestmentAsset Value

Return IRR%

Cache Unit Oil Field

• Paradox Basin, Montezuma County, Colorado, USA

• 1,840 acres, 10 miles east of the Greater Aneth Field (1.5bn barrels OOIP & peak production of 100,000 BOPD)

• 100% Operated Working Interest, 80% Net Revenue Interest

• Field has produced ~5 million barrels historically from 24 wells

• 12 – 15 BOPD conventional production of sweet 44° – 45° API oil (from one operating 47 year old well)

• ~24 million barrels Original Oil-in-Place (OOIP)

• ~80% oil remaining in place (~19.33 million barrels)

• Expected that 5 million barrels still remain recoverable

• An additional million barrels of recovery is being targeted with CO2 injection techniques, as has successfully been deployed at the Aneth field.

$5m $1.2m $30m 33%+/-

Gold Nugget Gas Field

• Located in the Wind River Basin, Wyoming• Multiple discrete s and stone reservoirs at

between 8,600’ and 13,800’• Large Gas column in Lance and Ft Union

layers• 3,000+- feet of gross pay interval• Only 10% of pay has been developed• All infrastructure and support is built and in

place

$1m $800k $10m [#]


Effective risk management underpins our investment objectives

Two-stage due diligence process:

1. Feasibility

• Assessment of the Asset i.e. Is the asset commercially feasible and in-line with our core investment objectives

• A deal is only passed through to a prospective investor following our filtering process

2. Detailed due diligence

• Detailed due diligence pack will be prepared and presented to an investor on each project of interest

• Heads of Terms issued by Red Sky Energy subject to detailed due diligence satisfying investment criteria

Each deal is structured to ensure minimal risk to investor capital


Risk Management


• Red Sky Energy has partners with world recognised third party engineers and consultants to assist with due diligence

and assess the viability of the assets that are under investigation

• Once all analysis and reports are satisfied by the investment comity Red Sky Energy will proceed with the acquisition

of the asset.


Technical Partners


DirectorsMr. Kerry Smith Kerry Smith has over 30 years of experience as an independent contract at Oil & Gas operator and is the Executive Chairman of Red Sky Energy. He has experience in all areas of Oil & Gas production, ranging from wellhead to P&L responsibility. His project management experience includes data interpretation, usage of new methods to enhance operations, evaluation of Oil & Gas reserves and analysis of research together was seismic studies to develop the most cost-effective drilling program. He has experience in all areas of well exploration preparation, production enhancement and well stimulation design. Mr. Smith is skilled in developing and implementing work-over, completion, drilling and production operations. Mr. Smith’s responsibilities will include vetting all recommendations for the Red Sky Energy team. His lengthy experience as an owner will be invaluable in reviewing and participating in all the deliverables from Red Sky Energy. Mr. William Reinhart William Reinhart has nearly 40 years experience in geology and geophysics. Mr. Reinhart has extensive geologic experience in most major Oil & Gas provinces in North America. He has held senior positions with Mobil, both in exploration and producing units for over two decade. Mr. Reinhart has a BS and MS in geology from Washington State University with a primary focus on Mineralogy and Metallic ore deposits.

Mr. Clinton Carey Clinton Carey has 20+ years as a manager and director in a range of listed companies in the resources, Oil & Gas and technology sectors. Mr. Carey has extensive experience in the resource sector providing management, capital raising and corporate advisory services to a range of listed mining and energy companies. He has worked for mining and energy companies in Russia, Brazil, Australia and England

Mr. Russell Krause Russell Krause has 25+ years of executive management and director level experience in a range of corporate advisory, stockbroking and investment banking rolls with some of Australia’s leading financial services firms Mr. Krause also has extensive experience in the resource sector providing equity capital markets, capital raising a corporate advisory services to a range of ASX listed mining and energy companies. Mr. Krause is currently a director of ASX listed Oil & Gas producer Austex Oil Ltd and Elk Petroleum Limited.


Mr. Patrick Morris

Patrick Morris has over 18 years of experience in financial services including investments in Oil & Gas leases and negotiating and closing financing for both public and private E&P companies internationally. Mr. Morris is the Chief Operating Officer of HAGIN Investment Management. He began his career with Phillette Investment Management and continued at Deutsche Bank, Pulse trading and Natixis before founding HAGIN Investment Management. He is an expert commentator on the investment management industry and global politics; he has been featured on numerous financial news media outlets such as the Wall Street Journal’s; Market Watch, FOX Business News and Bloomberg. Mr. Morris is also a regular speaker at financial conferences such as Quant Invest, Reuters Hedge World and IMN. Mr. Morris has a BA from Syracuse University and an MA in Communication from Emerson College. Mr. Morris is a founding member of the Society for Financial Econometrics (SoFiE). Mr. Morris is also an associate member of Certified Fraud Examiners and a member of the Investment Management Consultants Association He has a BA from Syracuse University and an MA in Communication from Emerson College.

Mr. Edward B. Coalson

Edward B. Coalson has more than 40 years of experience as a distinguished professional in Geology and Geophysics. Dr. Coalson has worked on a wide range of projects, most recently focused in the Piceance, Bighorn, Paradox and Green River basins. Dr. Coalson is an expert in the Rocky Mountain and Mid-Continent oils and gas sector. During his career he has held various positions with Coyote Oil & Gas Company, Strike Oil & Gas, LLC, Vecta Oil & Gas Company, Ltd., Cabot Oil & Gas Corporation, Bass Enterprises Production Company, and American Hunter Exploration Company. Dr. Coalson has a Ph.D. in Geology from the Colorado School of Mines, an MS in Geology from the University of Wyoming and a BS in Geology from Cal-State Long Beach. Dr. Coalson is widely recognized as an expert in his field and has written or contributed to numerous publications.


Advisors


Australia

Level 17,

500 Collins Street,

Melbourne, Australia

Phone: +61 3 86929047

Subsidiary Office:

USA

12160 North Abrams Road,

Dallas, Texas, USA

Phone: +1 214 691 1713


Contact

Clinton Carey - Director

[email protected]

Kerry Smith - Director

[email protected]

Management

Registered Office

Website



This material reflects the views of Red Sky Energy Limited (RSEL) and is for general information. It does not take into account the particular investment

objectives, financial situation, or needs of any individual clients or types of clients. This material may contain proprietary data from third party providers and is

intended for the personal use of the recipient only. Opinions expressed herein are current opinions only as of the date indicated and are subject to change. This

presentation is based on information obtained from various sources that RSEL believes to be reliable, but RSEL makes no representation or warranty with

respect to the accuracy or completeness of this information. Any references to historical results or performance are no indication of future performance and

there can be no assurance that any investment will achieve stated or particular returns or its targeted objectives. There is no guarantee of future performance.

This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of RSEL or to invest in any part of its portfolio of projects

and assets. This document has been prepared by RSEL, for the purpose of describing certain anticipated aspects of the Company’s intentions and strategy for

its portfolio of projects and assets. The information herein is a summary and is only intended to be reviewed in detail with RSEL personnel. This presentation

should be kept confidential and it should not be distributed without RSEL’s prior written consent. This document does not provide all information that may be

necessary to make a decision to invest in RSEL or any part of its portfolio of projects and assets, including, but not limited to various risk factors, and is subject

to change without notice. All of the information provided herein with respect to RSEL and its portfolio of projects and assets is subject to and qualified in its

entirety by reference to the terms and conditions described in other documents. Before you make any investment in RSEL or any of its portfolio of projects and

assets, you should thoroughly review the full set of documents with your financial, legal and tax advisors to determine whether an investment is suitable for you.

The information in this document represents our current focus and plans. Depending on the availability of funds, conditions and trends in relevant markets and

the economy we may pursue other objectives, employ other techniques, or modify our overall approach. We cannot make any assurances that RSEL or its the

portfolio of projects and assets will achieve their objectives. Historical results or performance is not indicative of future returns. All results, performance

information and other data is for illustrative purposes only. There is no assurance that these or similar results will be realized in the future. We can make no

assurances that risks, including market risk, risks associated with RSEL’s portfolio of projects and assets, interest rate risk, or any other risks, will be in line with

historical experience. We can make no assurance that the costs involved in executing our strategies will be reasonable and acceptable.


Disclaimer

red sky energy limited september 2015 strictly private & confidential

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