Unaudited half-yearly results period ended 31 Dec

31 March 2016

Red Rock Resources plc ("Red Rock" or the "Company"), the oil and mineral exploration and development company with interests in oil production in Louisiana, manganese production in South Africa, and gold production in South America, announces its unaudited half-yearly results for the six months ended 31 December 2015.

Chairman's statement

We present the Company's interim report for the six months to 31^st December 2015.

The repositioning and restructuring of the company have continued during the period and since. Operating off a low cost base, cost outflows have been minimised, while management has concentrated on developing streams of income, as the company moves from a typical exploration company model to a cash flow-generative model.

In December 2015 a capital reorganisation was carried out and reduced the number of ordinary shares outstanding by consolidating every 25 old shares into one new share. While it is too early to be definitive, the indications so far are that the exercise may be succeeding in its purpose of reducing trading spreads and increasing tradability of the shares.

After a prolonged period of study of potential cash-flow generative oil opportunities in 2014 and 2015, the company acquired a 20% working interest in the Shoats Creek Oil Field in Louisiana in late 2015, initially by an agreement to participate in the drilling of two future wells, Lutcher More 21 and Lutcher More 22. Subsequently an equivalent interest in the Lutcher More 20 (LM 20) well, already drilled and coming into production, was purchased. On 7 March 2016 the coming into full production and first stable production rates from LM 20 (at over 200 barrels per day) were announced, and so as of that date Red Rock became an oil producer.

This investment was stress-tested for a number of different scenarios before it was made. On the basis of $30 a barrel oil, an 18% discount rate (rather than the normal 10% assumption), and first year production figures 40% below operator forecasts, Red Rock modelled a satisfactorily positive net present value. Currently, comparable oil prices are over $40 a barrel, while first year production appears likely to exceed operator forecasts.

The company expects to participate in drilling LM 21 and LM 22 over the course of the Summer, which access the same shallow Frio horizon as the nearby LM 20, and then LM 23 in the Fall. The consortium, with Red Rock participating, also intends to re-enter a well that accesses the deeper but economically important Cockfield horizon with a view to re-establishing production, to extend the held acreage, and to negotiate a natural gas contract in order to sell, rather than flare off, the gas production from these wells. Red Rock will meet its share of costs, and its net programme exposure will peak at around US$393,000 in the third quarter of 2016.        

It is therefore hoped that the year will end with the Company holding interests in five producing wells at Shoats Creek. Given success this year, another substantial programme at Shoats Creek is projected for next year.

Elsewhere, the Company received in February the next tranche due of proceeds from the sale of Colombia, with another US$225,000 due in July. From May Red Rock also expects to start receiving royalty payments from gold production in Colombia.

Jupiter Mines Ltd, where the Company retains a holding of 27,324,375 shares (c. 1.2%) and which operates the Tshipi Borwa manganese mine in South Africa, has benefitted from the recent sharp rise in the manganese price and as one of the most efficient and significant operators in the global manganese market is operating profitably off a carefully controlled cost base.

The Company is now providing accommodation to other businesses within its leased premises and expects to receive significant rental income over the coming months.

Exploration and development interests in Kenya, Ivory Coast and Greenland are being maintained. In Kenya, in order to protect its interests and those of its local partner, the Company is pursuing an action for judicial review on behalf of itself and its local partner, and until that is resolved is restricted in its activities.

The traditional exploration model for smaller companies listed on junior markets has been heavily dependent on access to funding through new issues of stock, but has not in the recent years of declining commodity prices offered a satisfactory return on monies raised. The consequence is that there is much less public and corporate money available for exploration. In order to control its destiny Red Rock has set the objective of moving towards cash breakeven and then cash generation within this year. Once this is achieved, the intention is that any further external funding can be clearly linked to the acquisition and development of projects with projected rates of return and present values that can be seen to add shareholder value. This is a work in progress, but Red Rock is on course so far and has every hope of achieving these objectives. 

Andrew Bell

Executive Chairman

30 March 2016