Mr. Cameron Taylor reports

ROK RESOURCES FILES FINANCIAL RESULTS AND MANAGEMENT DISCUSSION & ANALYSIS FOR THE SECOND QUARTER OF 2024 AND PROVIDES OPERATIONS UPDATE

Rok Resources Inc. has filed its interim financial results and management's discussion and analysis for the six months ended June 30, 2024.

The company executed on its previously announced postspring breakup drilling program in late Q2 2024, utilizing funds flow of $5.0-million toward the drilling of four gross (3.44 net) wells in southeastern Saskatchewan. The company purposefully utilized Q1 (first quarter) 2024 to deliver on: (i) debt reduction; (ii) improvement of operational efficiencies; (iii) strategic well optimizations; and (iv) advancement of the lithium project, and began its southeastern Saskatchewan development program in Q2 (second quarter).

The company remains well positioned to continue its 2024 drilling program through the year-end, with the flexibility to allocate capital across its light oil prospects in Saskatchewan. Despite operational delays due to abnormally wet weather in Q2 2024, the company's 2024 guidance remains relatively unchanged.

H2 (second half) 2024 production guidance assumes Kaybob volumes are back on stream before the year-end.

Q2 2024 highlights:

• Production in line with forecast: production averaged 3,937 barrels of oil equivalent per day (boepd) (63 per cent liquids), a year-over-year increase of 19.4 per cent;
• Operating netback increase: operated netback of $17.87 per barrel of oil equivalent (boe) compared with $16.06 per boe in Q1 2024;
• Successful Frobisher drill program: drilled four gross (3.44 net) wells with an average IP30 of 148 boepd;
• Successful optimization program: continued success with casing gas compressor installations on Midale producers, resulting in average capital efficiencies of $3,850 per boepd and four-to-six-month payouts;
• Adjusted net debt reduction: adjusted net debt reduced from $18.7-million at the end of Q4 (fourth quarter) 2023 to $15.1-million at the end Q2 2024;
• Credit facility renewed: The company maintains a $22.5-million credit facility through June 30, 2025.

2024 operations update and outlook

Year to date, the company has successfully drilled five gross (4.33 net) wells in 2024, currently producing a total of 735 boepd (640 boepd net to Rok). In addition, since beginning casing gas compressor installations on existing Midale wells in southeastern Saskatchewan, the company has added 280 boepd (IP90) to the base production levels of 15 wells. Management has identified an additional 22 locations for compressor installations over the next 18 months.

Key initiatives for 2024 remain unchanged with the company focusing on using its current balance sheet to target strategic opportunities in core areas, improving operational efficiencies through targeted well optimizations and undertaking operational cost reduction measures. The remaining drill program aims to add Frobisher drilling inventory while proving up Midale prospects with multilateral drilling. The company anticipates completing its 2024 drilling program by drilling a total of seven to nine gross wells in H2 2024.

Kaybob, Alberta, update

As previously mentioned, with the current softening of the North American natural gas markets, the company has continued to shut in 300 boepd (80 per cent natural gas) in its Kaybob, Alberta, area. The strategic shut-ins are expected for the balance of Q3 (third quarter) 2024 with reactivation expected by the year-end.

Q2 2024 financial summary

In Q2 2024, the company realized average daily production volume of 3,937 boepd (63 per cent liquids), resulting in oil and natural gas sales of $21.7-million, and realized hedge loss of $100,000. The company realized funds from operations of $7.0-million, after royalties, operating expenses, and processing and other income.

Operating costs, which include expenses incurred to operate wells, gather, treat and transport production volumes, as well as costs to perform well and facility repairs and maintenance, were consistent with company expectations for the quarter, averaging $32.25 per boe, with lower maintenance and workover costs for the period when compared with 2023. Operating costs are expected to average $30 per boe in 2024.

Capital expenditures in the first half of 2024 totalled $8.0-million, which included $4.4-million toward the company's drilling programs, $1.0-million toward well reactivations, $800,000 toward land and seismic acquisitions, and $900,000 toward facilities and gathering systems. Compared with the company's H1 (first half) 2024 capital budget of $9.5-million, lower costs were incurred due to delays associated with abnormally wet conditions in southeastern Saskatchewan.

Net debt

Net debt as at June 30, 2024, and Dec. 31, 2023, is outlined in an attached table.

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).

Complete reports and statements will be made available on SEDAR+ and on the company's website.

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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