Red Sky Energy (ASX: ROG) has targeted shallow gas at the company’s prospects in the Clarence Moreton Basin in northeast New South Wales and southeast Queensland.
The company said the resource is less than 600 metres deep and the formation is widespread of up to 300 metres thick at Kangaroo Creek.
Red Sky has a drilling program underway in the area to earn a 70% interest in four permits.
Red Sky said that the sandstones show good permeability that may not require artificial stimulation such as hydraulic fracturing, with gas production expected to involve low amounts of water extraction.
Cores obtained from the site are undergoing testing and analysis by a company specialist with results due soon.
The company is also assessing the feasibility of a small scale power station that could be located in close proximity to the gas resource, which could present a near term opportunity to generate revenue through commercialisation.