ROK Resources, Inc.: ROK Resources Announces Rapid Debt Reduction, Provides Operations Update and 2024 Year-End Reserves

NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES

REGINA, SK / ACCESS Newswire / February 12, 2025 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK)(OTCQB:ROKRF) is pleased to announce expedited debt reduction through 2024 and provide an operations update and results of its 2024 year end reserves.

In 2024, the Company delivered on disciplined capital allocation with the primary goals of further enhancing its already stable balance sheet and strengthening the Company's base production. The Company's drilling program focused on light oil prospects in Southeast Saskatchewan and was underpinned by strong production rates that exceeded internal type curves by greater than 20%. The Company outperformed its 2024 guidance, deploying approximately $17.4 million^1,2 in capital expenditures, resulting in annual average production of 3,992 boepd², $31.6 million² in Funds from Operations and Adjusted Net Debt at December 31, 2024 of $10.6 million².

2024 Operational Highlights

• 43% Reduction in Adjusted Net Debt: The Company will exit 2024 with estimatedAdjusted Net Debt of $10.6 million, representing a 43%, or $8.1 million, reduction year over year;

• Funds from Operations Outperforms Forecast: Estimated Funds from Operations of $31.6 million in 2024, a 6% increase compared to internal forecast of $29.8 million; and

• Production In-Line with Forecast: Daily average production in 2024 of 3,992 boepd (66% liquids), which represents production growth of 3% compared to 2023 despite only drilling 8 gross (6.8 net) horizontal oil wells.

The Company expects to provide full-year 2025 guidance on February 27, 2025.

2024 Corporate Reserves
The Company focused its 2024 drilling program on open-hole, multi-lateral light oil prospects in Saskatchewan, which resulted in Light and Medium Crude Oil reserve growth across all three reserves categories, proved developed producing ("PDP"), total proved ("TP") and total proved plus probable ("TPP"). In addition, improvement to reserve life index ("RLI"), finding and development costs, recycle ratio and net asset value ("NAV") per share were also observed.

Reserves Evaluation Highlights

• Total proved basic NAV⁹ of $0.56/share and total proved plus probable basic NAV⁹ of $1.03/share, representing increases of 10% and 3%, respectively, when compared to 2023 (excludes any value attributed to the Company's current hedges, undeveloped land, and equity ownership in EMP Metals Corp.).

• Improved corporate decline rate¹¹ going from 23% to 21% when compared year over year; and

• As a result of our successful light oil drilling program in 2024, the Company had a 4% increase on TP Light and Medium Oil reserves and 5% increase on TPP Light and Medium Oil reserves.

Summary of Oil & Gas Reserves as of December 31, 2024^3,4,5,6

The evaluation for the Company as at December 31, 2024, was conducted by McDaniel & Associates Ltd. ("McDaniel") of Calgary and was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluators Handbook ("COGEH") and National Instrument 51-101 - Standards for Disclosure of Oil and Gas Activities ("NI 51-101").

Reserves - Total Company Interest

Light and
Medium Oil

Conventional Natural Gas

Natural Gas Liquids

Total

Mbbl

MMcf

Mbbl

Mboe

Total Proved Developed Producing

2,744

12,837

576

5,459

Total Proved

7,535

25,686

1,448

13,264

Total Probable

3,963

18,299

920

7,933

Total Proved plus Probable

11,498

43,985

2,368

21,196

Summary of Net Present Values as of December 31, 2024 (Before Income Tax)^3,4,5,6,7

Before Tax Present Value (M$)

Undiscounted

5%

10%

15%

Total Proved Developed Producing

-9,968

34,251

43,626

44,670

Total Proved

165,935

158,475

134,109

112,145

Total Probable

216,949

143,054

101,843

76,498

Total Proved plus Probable

382,883

301,528

235,951

188,642

Future Development Costs ("FDC")

FDC reflects best estimate of the capital costs to develop and produce reserves. Included in FDC are 91 gross proved booked drilling locations and 30 gross probable booked drilling locations. This year, the Company converted 46 booked locations from cemented liner/hydraulic fracture completions to open-hole, multilateral designs. This initiative reduced future development costs by 9% on TP and 6% on TPP reserves.

($ millions)	Total Proved	Total Proved Plus Probable
2025	25.4	26.3
2026	32.8	39.1
2027	28.1	38.6
2028	30.3	39.2
2029	13.5	30.9
Remainder	-	-
Total FDC Undiscounted	130.1	174.2
Total FDC Discounted at 10%	105.2	137.2

Performance Measures (including FDC)

The following table highlights finding and development ("F&D") and finding, development and acquisition ("FD&A") costs and associated recycle ratios, including FDC, based on the evaluation of the Company's petroleum and natural gas reserves prepared by McDaniel:

	2024	2023
Proved Developed Producing
F&D costs per boe	$14.74	$22.24
F&D recycle ratio	1.5	0.9
FD&A costs per boe	$11.40	$71.25
FD&A recycle ratio	1.9	-
Total Proved
F&D costs per boe	$3.65	$25.82
F&D recycle ratio	5.9	0.8
FD&A costs per boe	$0.81	$13.69
FD&A recycle ratio	26.6	1.4
Total Proved Plus Probable
F&D costs per boe	$4.31	$49.06
F&D recycle ratio	5.0	0.5
FD&A costs per boe	$1.95	$11.20
FD&A recycle ratio	11.0	1.8

Reserve Life Index

The following table highlights our reserve life index based on the evaluation of the Company's petroleum and natural gas reserves prepared by McDaniel:

	2024	2023
Proved Developed Producing
RLI (years)	4.4	4.3
Total Proved
RLI (years)	9.3	8.9
Total Proved Plus Probable
RLI (years)	14.1	12.8

Price Forecast⁴ (Sproule, GLJ, McDaniel Average), January 1, 2025

Year

F/X

WTI

Cromer Medium

Alberta AECO

USD/CAD

USD/bbl

CAD/bbl

CAD/Mmbtu

2025

0.71

71.58

91.15

2.36

2026

0.73

74.48

93.35

3.33

2027

0.74

75.81

93.62

3.48

2028

0.74

77.66

95.96

3.69

2029

0.74

79.22

97.88

3.76

2030

0.74

80.80

99.83

3.83

2031

0.74

82.42

101.83

3.91

2032

0.74

84.06

103.87

3.99

2033

0.74

85.74

105.95

4.07

2034

0.74

87.46

108.06

4.15

Reconciliation of Total Company Reserves

	Total Light & Medium Crude			Total Natural Gas			Total Natural Gas Liquids & Condensates			BOE
FACTORS	Proved	Probable	Proved + Probable	Proved	Probable	Proved + Probable	Proved	Probable	Proved + Probable	Proved	Probable	Proved + Probable
	Mbbl	Mbbl	Mbbl	MMcf	MMcf	MMcf	Mbbl	Mbbl	Mbbl	Mboe	Mboe	Mboe
Open Dec 31, 2023	7,275	3,655	10,930	27,196	18,257	45,453	1,591	958	2,549	13,399	7,655	21,054
Acquisitions	7	2	9	1	7	8	0	1	1	8	4	12
Economic Factors	49	23	73	-737	-354	-1,091	-21	-9	-30	-94	-45	-139
Extensions/Improved Rec.	734	445	1,178	735	499	1,234	67	46	113	923	574	1,497
Technical Revisions	256	-158	98	1,655	-123	1,532	-31	-79	-110	501	-257	244
Transfer to PDP	11	-3	8	-47	18	-30	-4	4	-0	-1	4	3
Production	-798	-1	-799	-3,118	-4	-3,123	-154	-0	-154	-1,471	-2	-1,473
Close Dec 31, 2024	7,535	3,963	11,498	25,686	18,299	43,985	1,448	920	2,368	13,263	7,933	21,196

Notes:

1. Does not include approximately $0.7 million of expenditures related to lithium project, or $2.1 million of expenditures toward abandonment and reclamation obligations.

2. Estimated prior to finalizing year-end audited financial statements.

3. Reserves from acquisition may differ from previous disclosure due to well underperformance or overperformance.

4. The inflation rate is 0% in 2025, 2% per year in 2026 and 2% per year starting in 2027.

5. Estimated future undiscounted development costs at December 31, 2024 were $130 million for proved reserves and $174 million for proved plus probable reserves.

6. Report includes well and facility abandonment and reclamation costs of $103.5 million (with inflation) for the proved plus probable case.

7. The net present values disclosed may not represent fair market value.

8. Totals may vary due to rounding.

9. Basic Net Asset Value ("Basic NAV") includes NPV10 of TP and TPP reserves, respectively, less estimated² adjusted net debt balance of $10.6 million as of December 31, 2024, divided by 219,769,315 outstanding common shares.

10. Total capital attributed to oil and gas finding and development in 2024 was $17.4 million.

11. Corporate decline rate calculated on a 3-year timeframe (2025, 2026, 2027) on Proved Developed Reserves, and assumes no maintenance capital required.

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

For further information, please contact:
Cameron Taylor, Chairman and Chief Executive Officer
Bryden Wright, President and Chief Operating Officer
Jared Lukomski, Senior Vice President, Land & Business Development
Lynn Chapman, Chief Financial Officer
Phone: [phone]
Email: [e-mail]
Website: www.rokresources.ca

Non-IFRS Measures
The non-IFRS measures referred to above do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable to similar measures used by other companies. Management uses this non-IFRS measurement to provide its shareholders and investors with a measurement of the Company's financial performance and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used.

"Operating Income" is calculated by deducting royalties and operating expense from total sales revenue. Total sales revenue is comprised of oil and gas sales. The Company refers to Operating Income expressed per unit of production as an "Operating Netback". "Funds from Operations" is calculated by adding other income and realized gains/losses on commodity contracts ("hedging") to Operating Income. "Net Debt" includes all indebtedness of the Company, such as the "credit facility" and "lease obligations" (each as defined within the Company's interim condensed financial statements for the nine months ended September 30, 2024), net of Adjusted Working Capital. "Adjusted Working Capital" is calculated as current assets less current liabilities, excluding current portion of debt and lease liability as defined on the Company's statement of financial position within the Company's interim condensed financial statements for the nine months ended September 30, 2024. "Adjusted Net Debt" is calculated by removing the "current portion of risk management contracts", "deferred revenue liability" and "lease obligations" (each as defined within the Company's interim condensed financial statements for the nine months ended September 30, 2024) from Net Debt.

Conversion Measures
Production volumes and reserves are commonly expressed on a barrel of oil equivalent ("boe") basis whereby natural gas volumes are converted at the ratio of 6 thousand cubic feet ("Mcf") to 1 barrel of oil ("bbl"). Although the intention is to sum oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants, boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In recent years, the value ratio based on the price of crude oil as compared to natural gas has been significantly higher than the energy equivalency of 6:1 and utilizing a conversion of natural gas volumes on a 6:1 basis may be misleading as an indication of value.

Reserve Disclosure
All reserves information in this press release was prepared by an independent reserve evaluator, effective December 31, 2024, using the reserve evaluators December 31, 2024 forecast prices and costs in accordance with National Instrument 51-101 - Standards of Disclosure of Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). All reserve references in this press release are "Company gross reserves". Company gross reserves are the Company's total working interest reserves before the deduction of any royalties payable by the Company and before the consideration of the Company's royalty interests. It should not be assumed that the present worth of estimated future cash flow of net revenue presented herein represents the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained, and variances could be material. The recovery and reserve estimates of the Assets and ROK's crude oil, NGLs and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and NGLs reserves may be greater than or less than the estimates provided herein.

Abbreviations

bbls/d bopd		barrels per day barrels per day
boepd		barrels oil equivalent per day
IP		Initial Production
NGLs		Natural Gas Liquids
Mboe Mg/l		Thousands of barrels of oil equivalent Milligrams per Litre
MMboe		Millions of barrels of oil equivalent
PDP		Proved Developed Producing
TP		Total Proved Reserves
TPP		Total Proved and Probable Reserves
WTI YoY CA$ US$		West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade Year over year Canadian dollars U.S. dollars

Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company's objectives, goals, or future plans and the expected results thereof. Forward-looking statements are necessarily based on several estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to general business, economic and social uncertainties; litigation, legislative, environmental, and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in ROK's public documents filed on SEDAR+ at www.sedarplus.ca; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether because of new information, future events, or otherwise.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: ROK Resources Inc.

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