Mr. Cameron Taylor reports

Rok RESOURCES ANNOUNCES REVISED FIRST-HALF 2024 GUIDANCE & FILES 2023 FINANCIAL RESULTS & MANAGEMENT DISCUSSION & ANALYSIS

Rok Resources Inc. has released its revised first-half 2024 guidance, and has filed its annual financial results and management discussion and analysis for the year ended Dec. 31, 2023.

First-half 2024 revised guidance

With the recent stability of WTI (West Texas Intermediate) pricing, the company anticipates commencing its drilling program after spring breakup in late Q2 2024. Key initiatives for 2024 include reducing corporate finding and development costs and expanding core operating areas in southeast Saskatchewan. The six-well program, which will target Frobisher light oil prospects, will begin with prospects offsetting the best oil well in Saskatchewan in December, 2023. To support these endeavours, the first-half 2024 capital budget has been revised from $4.0-million to $4.5-million to $10.0-million to $10.5-million. This acceleration of development is contingent on various factors, including favourable weather and road conditions following spring breakup.

The company intends to provide second-half 2024 guidance in late Q2 2024.

Highlights of revised first-half 2024 guidance

• Stability in WTI: The company will increase its capital budget in first-half 2024 to $10.0-million to $10.5-million, with an expected benefit to net operating income through second-half 2024 as new unhedged production comes on stream. The company expects to average about 4,000 boepd (barrels of oil equivalent per day) in first-half 2024 (61 per cent liquids);
• Net debt: Estimated $16.0-million to $16.5-million in adjusted net debt at the end of first-half 2024;
• Expedited drill program: Addition of six gross (5.4 net) Frobisher wells in late Q2, weather permitting;
• Efficient use of capital: A total of $1.0-million allocated to reactivations and recompletions, expected to yield average capital efficiencies of $5,000 to $10,000 per boepd.

2023 financial and operating highlights

• Record average production: Daily average production in 2023 of 3,876 boepd (62 per cent liquids), a 40-per-cent increase compared to prior year;
• Organically increased production by 55 per cent: In second-half 2023 the company drilled 13 gross (11.6 net) wells, adding 1,650 boepd, which represents a 55-per-cent increase in production over the period;
• Exceeded 2023 funds from operations forecast: Funds from operations of $37.2-million in 2023, exceeding the company's forecast by 3.5 per cent despite weaker commodity pricing;
• Net debt: The company exited 2023 with net debt of $14.7-million (or adjusted net debt of $18.7-million). This represents a 58 per cent, or $20.6-million, reduction in net debt year over year;
• Hedge gain: Realized an annual hedge gain on commodity contracts of $6.7-million.

Net debt

The continued reduction of net debt quarter over quarter is a result of organically generated funds flows utilized to reduce company indebtedness. Rok uses net debt as a measure of the company's financial position and liquidity, however it is not intended to be viewed as an alternative to other measures calculated in accordance with IFRS (international financial reporting standards).

About Rok Resources Inc.

Rok is primarily engaged in exploring for petroleum and natural gas development activities in Alberta and Saskatchewan. It has offices located in both Regina, Sask., Canada, and Calgary, Alta., Canada. Rok's common shares are traded on the TSX Venture Exchange under the trading symbol ROK.

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