Red Sky Energy Limited : Interest in two permits sold

Level 17, 500 Collins Street, abn: 94 099 116 275

Melbourne Victoria 3000 tel: [phone]

fax: [phone] redskyenergy.com.au

ASX ANNOUNCEMENT Interest in two permits sold Key Points:

• Red Sky has sold its 20% interest in two exploration permits to ERM Gas;

• Consideration is $1.685 million.

The directors of Red Sky Energy Limited ("Red Sky" or "the Company") are pleased to announce that the Company has entered into a sale agreement for its 20% non-operated interest in exploration permits PEL 457 and 479 in the Clarence Moreton Basin to ERM Gas, a wholly owned subsidiary of ERM Power. Details of the transaction are: