Range Resources : Half Yearly Report

Range Resources Limited

('Range' or 'the Company')

Half-Yearly Report

Range today releases the half-yearly report (unaudited) for the 6 months ending 31 December 2015, with the following key points:

Corporate:

· Range is fully funded for its upcoming exploration, development and waterflood programme;

· US$30 million equity-based financing completed;

· The Company benefits from the credit terms provided by LandOcean for oilfield work undertaken in Trinidad, including waterflood and drilling services;

· Mr Yu Wang, the nominee of Sibo, appointed as a Non-Executive Director to the Board. Mr Yan Liu tendered his resignation as Chief Executive Officer and Trinidad General Manager. Mr Lijun Xiu, an oil industry veteran with long and distinguished career of over 30 years, appointed as Trinidad General Manager;

· Substantial, positive progress achieved in obtaining acceptable outcomes to a number of historic legal issues; and

· The Company continued to seek suitable value enhancing production and / or development acquisitions and rationalise the non-core assets within the portfolio.

Operational:

· The average oil production in Trinidad of 561 bopd was broadly unchanged from 545 bopd from the same period last year;

· The Company published updated reserves statement (1P of 19.4 mmbbls; 2P of 22.0 mmbbls and 3P of 27.6 mmbbls);

· Significant progress on the waterflood programmes continued with approvals for Morne Diablo and Beach Marcelle projects received. The Company identified implementation of these projects as the highest priority;

· Water injection on Morne Diablo project underway and expected to commence on Beach Marcelle during Q2 2016;

· Three development wells successfully drilled and put on production. The Company plans to drill a number of additional high impact wells onshore Trinidad during 2016; and

· Exploration work on the St Mary's and Guayaguayare licences continued, including preparations for spudding of the Canari North exploration well.

Financial:

· The balance sheet remains strong with total assets of US$158.5 million;

· As at 31 December 2015 the Company had cash, deposits and investments of approximately US$22 million. The Company has only minimal borrowings of approximately US$0.4 million;

· Given the substantial drop in oil price, Range has recognised an impairment charge of US$17.2 million against its Trinidad assets. The balance sheet valuation of Trinidad does not take into consideration the inherent value in the exploration acreage and resource potential within these assets and the Company continues to firmly believe in the long-term prospects of the Trinidad portfolio to deliver substantial value to shareholders;

· Revenues decreased by 46% to US$4.3 million (2014: US$7.8 million), which was due to the significantly lower oil prices during the period. The average oil price received was US$41.4 per barrel (2014: US$78.2 per barrel);

· Excellent progress in reducing costs with recurring G&A costs 84% lower at approximately US$0.9 million due to tight cost control measures implemented with significant reduction seen in discretionary expenditure, lower staff costs and elimination of corporate management costs;

· Operating expenses were unchanged at US$31 per barrel;

· Net loss for the period was US$25.2 million (2014: US$19.9 million). This includes a number of non-recurring and exceptional items as the Company continues to streamline its operations, reduces the complexity of the Group and disposes of non-core assets; and

· The calculated underlying NPAT for the period excluding non-recurring and exceptional items demonstrates significant positive progress with a reduced loss of US$6.5 million (2014: US$10.7 million).

Competent Person statement

In accordance with AIM Rules, Guidance for Mining and Oil & Gas Companies, the information contained in this announcement has been reviewed and approved by Dr Douglas Field. Dr Field is a petroleum and reservoir engineer who is a suitably qualified person with over 30 years' experience in assessing hydrocarbon reserves, and holds a PhD in Organic Chemistry. Dr Field is a member of the SPE (Society of Petroleum Engineers) and the PESGB (Petroleum Exploration Society of Great Britain).

Glossary

Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. 1P refers to Proved Reserves, 2P refers to Proved plus Probable Reserves, 3P refers to Proved, plus Probable, plus Possible Reserves.

Range Resources Limited

ABN 88 002 522 009

Half-Year Results

For the period ended 31 December 2015

CONTENTS

Directors' Report............................................................................................................................................................................ 2

Auditor's Declaration of Independence........................................................................................................................................... 7

Consolidated Statement of Profit or Loss and Other Comprehensive Income.................................................................................. 8

Consolidated Statement of Financial Position................................................................................................................................... 9

Consolidated Statement of Changes in Equity............................................................................................................................... 10

Consolidated Statement of Cash Flows ........................................................................................................................................ 11

Notes to and Forming Part of the Consolidated Financial Statements............................................................................................ 12

Directors' Declaration................................................................................................................................................................... 26

Independent Review Report to the Members............................................................................................................................... 27

Corporate Directory..................................................................................................................................................................... 29

​

The Directors of Range Resources Limited ('Range' or the 'Company') and the entities it controls (together, the 'Group') present the financial report for the half-year ended 31 December 2015.

DIRECTORS

The names of the Directors in office and at any time during or since the end of the half-year are:

At the date of this report, the Board comprises of Mr David Yu Chen, Mr Yan Liu, Mr Zhiwei (Kerry) Gu, Ms Juan (Kiki) Wang and Mr Yu Wang.

The Directors were in office for the entire period unless stated.

COMPANY SECRETARY

The following persons held the position of Company Secretary during or since the end of the half-year:

Mr Beattie and Ms Kelly held the position of Company Secretaries at the date of this report.

PRINCIPAL ACTIVITIES

The principal activity of the Group during the period was an upstream oil and gas company focused on exploration, development and production in Trinidad. The Company's strategy is to create sustainable shareholder value by growing oil production and developing discovered reserves. There was no significant change in the nature of these activities during the period.

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial half-year ended 31 December 2015.

FINANCIAL POSITION

The loss for the financial half-year ended 31 December 2015 after providing for income tax amounted to US$25,218,937 (half-year ended 31 December 2014: US$19,944,375). At 31 December 2015, the Group had net assets of US$92,616,016 (30 June 2015: US$95,023,456), cash and restricted cash assets of US$21,920,031 (30 June 2015: US$10,530,104), and amortised borrowings of US$399,341 (30 June 2015: US$7,518,077).

AUDITOR'S INDEPENDENCE DECLARATION

The Lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 7 for the half-year ended 31 December 2015. This report is made in accordance with a resolution of the Board of Directors.

REVIEW OF OPERATIONS

Production

The Company's oil and gas production for the period in Trinidad was 103,193 bbls (average of 561 bopd) net to Range, which is broadly unchanged from 545 bopd from the same period last year.

Reserves

During the period, the Company published its updated reserves statement to 30 June 2015 as follows:

The Company also reported prospective resources associated with its producing Trinidad assets of 91.3mmbbls (2014: N/A). The estimates do not include any reserves or resources for the St Mary's and Guayaguayare licences.

Work programme

During the period, the Company continued with its work programme in Trinidad. The Company successfully drilled three new development wells on its Morne Diablo and Beach Marcelle licences. All three wells were subsequently put on production.

The Company obtained necessary government and regulatory approvals for the Beach Marcelle and Morne Diablo waterflood projects. Initial water injection on Morne Diablo commenced during the period, with first production as a result of waterflooding expected in 2H 2016.

The Company also commenced an implementation plan on the South East block of the Beach Marcelle waterflood project. Injection is expected to commence in Q2 2016 with first production anticipated during Q4 2016.

In addition, the Company continued to prepare to spud the Canari North exploration well on the Guayaguayare licence. This will be the first exploration well to be drilled by Range in Trinidad. Any success with the well is expected to de-risk the Moruga sub-basin and could result in material potential upside in the Guayaguayare licence.

During the period, Range continued the exploration work programme on the St Mary's block including the audit of existing field infrastructure, facilities and wells. Range has provided the Ministry of Energy and Energy Industries with a performance bond of US$8 million in support of the minimum work obligations on the St Mary's licence.

Subsequent to the period end, the Company completed a review of its 2016 work programme, which was published on 22 February 2016.

FINANCIAL PERFORMANCE

Underlying NPAT (Net Profit after Tax) and Underlying EBITDAX (Earnings before interest, tax, depreciation, amortisation and exploration expenditure written off) are not defined measures under Australian Accounting Standards or IFRS, and are not audited. These measures have been calculated by the Company who believe they provide meaningful analysis of underlying performance.

The Group reports a loss after tax for the 6 month period of US$25,218,937 compared to a loss for the comparable period in the prior year of US$19,944,375. This result includes a number of non-recurring and exceptional items which adversely affected the financial performance during the period. These items principally constitute non-cash impairments to the goodwill associated with the Trinidad assets and other non-recurring costs that were incurred as the Company continues to streamline its operations, reduces the complexity of the Group and disposes of non-core assets.

Given the substantial drop in commodity pricing seen during the period, the Company has reassessed the valuation of the goodwill associated with the Trinidad assets taking into account a lower future assumed oil price and this has resulted in an impairment charge against the goodwill of US$17,213,961. This valuation does not take into consideration the inherent value in the exploration acreage and resource potential within the Trinidad assets and the Company continues to firmly believe in the long-term prospects of the Trinidad portfolio to deliver substantial value to shareholders.

The calculated underlying NPAT for the period excluding these non-recurring and exceptional items demonstrates significant positive progress compared to the prior period with a reduced loss of US$6,547,232 (prior year: US$10,743,209) with the principal factors in the performance as follows:

· Production was broadly stable in Trinidad and the reduction in revenue of over 45% is due to the significantly lower oil prices during the period. The average oil price received was US$41/bbl;

· Royalties payable in Trinidad also reduced in line with the fall in revenues by over 50% to US$1,337,789 (2015: US$2,883,740);

· Operating expenses on a per barrel basis were unchanged at US$31/bbl (prior year: US$31/bbl);

· Recurring general and administrative costs were 84% lower at approximately US$950,000 due to tight cost control measures implemented in the Group with significant reduction seen in discretionary expenditure, lower staff costs and elimination of corporate management costs; and

· Exploration costs written off during the period were higher at US$1,616,898 which is principally a result of continued expenditure on the Guayaguyare PSC in Trinidad in preparation for drilling of the Canari North exploration well in 2016.

The Group also reports a substantially improved underlying EBITDAX of US$(1,379,807) for the period.

The balance sheet of the Company remains strong with total assets of US$158,545,950. The most significant change to the balance sheet during the period was the issuance of the final tranche of shares to Sibo and receipt of the subscription proceeds of approximately US$22 million. Total cash has substantially increased to over US$21 million. The Company has only minimal borrowings of approximately US$400,000 being the remaining interest accrued on the Lind financing.

CORPORATE

Equity financing completed

During the period, the Company received approval at a general meeting of shareholders for the issuance of shares and options to a new investor, Beijing Sibo Investment Management LP ('Sibo'). The total investment was US$30 million at a subscription price of £0.008 per share - the first tranche of the proceeds had been received in the previous financial year, and the remaining US$22.1 million was received during September 2015. The Company's Directors and senior management also subscribed for ordinary shares totalling US$0.3 million at the same subscription price.

Funding and capital management

As at 31 December 2015 the Company had cash, deposits and investments of approximately US$22 million. The Company also benefits from the extended credit terms provided by its strategic partner, LandOcean Energy Services Co. Ltd ('LandOcean') on the oilfield services provided to the Company in Trinidad (including drilling operations).

During the period, Range and LandOcean continued to progress with finalising a US$50 million trade financing package in association with Sinosure, which is intended to be used to finance the waterflood programme in Trinidad. Subsequent to the period end (and pending completion of the Sinosure facility) Range announced that LandOcean will provide credit terms of 720 days for all work undertaken as part of purchase order 2 of the Integrated Master Services Agreement between the Company and LandOcean of up to US$50 million (which includes the waterflood programme). The Company therefore has the financial support in place to progress with its core waterflood programme during 2016 and 2017.

Legal proceedings

During the period, Range announced that the Western Australian Supreme Court, Court of Appeal dismissed Range's appeal seeking to reverse the decision of the Supreme Court (at first instance) refusing to set aside a statutory demand issued by Lind Asset Management LLC ('Lind'). Range, accordingly, paid the balance of the amount outstanding the subject of the statutory demand (approximately US$2.2 million) in November 2015. Earlier in the period, Range had made a voluntary repayment to Lind of the original capital amount advanced of US$5 million. Lind subsequently initiated further legal action in New South Wales Supreme Court seeking payment of approximately US$600,000 in respect of interest alleged to be due on the outstanding amount and legal costs. Lind is also seeking other (unspecified) damages for breach of contract. Range has filed its defence to Lind's claims and has also filed a cross-claim against Lind seeking in effect that Lind disclose its dealings in the 38 million Collateral Shares issued by Range to Lind as part of the Funding Agreement, and to account in favour of Range in relation to those dealings. Range and Lind have entered into discussions to ascertain whether these disputes can be resolved commercially. If the disputes cannot be resolved by negotiation, the legal process is expected to continue throughout 2016.

The Company made substantial, positive progress during the period (and subsequent to the reporting date) in obtaining acceptable outcomes to a number of other historic legal issues that had been previously reported as contingent liabilities. The most material amongst these was the arbitration with Mr Mark Patterson who had claimed approximately US$5.8 million. The hearing took place in Texas during December 2015 and Range received the final award of the arbitration tribunal in February 2016 who found fully in favour of the Company (with just an immaterial award of costs being made to Mr Patterson).

Director and management changes

On 1 October 2015, the Company announced the appointment of Mr Yu Wang, a nominee of Sibo, as a Non-Executive Director to the Board.

Subsequent to the period end, Mr Yan Liu tendered his resignation as Chief Executive Officer and Trinidad General Manager, effective 31 January 2016. Mr Liu remains on the Board as a Non-Executive Director. Mr Lijun Xiu has been appointed as Trinidad General Manager.

Non-core assets

The Company continues to pursue disposals of its interests in Georgia and Guatemala. In respect of the Colombian assets, following the period end, Range has received notification from the Agencia Nacional de Hidrocarburos ('ANH') in Colombia advising that the licences over three exploration blocks had been revoked. The licenses had been awarded to a Consortium of Optima Oil Corporation ('Optima') and the Company in December 2012. ANH alleges that various obligations and commitments contained within the exploration licences had not been fulfilled and that invalid letters of credit had been presented by Optima to support the minimum work obligations. It is currently anticipated that the Consortium will lodge an appeal of the decision by ANH to revoke the licences with the Administrative Tribunal of Bogota in the coming months.

Acquisition strategy

In line with the growth strategy of the Company to create value for shareholders, and to provide Range with additional production and revenue, the Board continues to evaluate potential acquisitions of high quality assets at attractive valuations. During recent months the Company has witnessed an increase in the available attractive opportunities, and is well positioned to take advantage of this opportune environment for acquirers.

SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE

Management changes

On 27 January 2016, the Board announced that Mr Yan Liu had tendered his resignation as Chief Executive Officer and Trinidad General Manager, effective 31 January 2016. Mr Liu remained on the Board of Directors as a Non-Executive Director.

Legal proceedings - Mark Patterson

During the period, the Company was involved in an arbitration hearing with Mr Mark Patterson who had claimed approximately US$5.8million. In February 2016, the Company received the final award of the arbitration tribunal who found fully in favour of the Company (with just an immaterial award of costs being made to Mr Patterson).

OUTLOOK

The Company is committed to delivering value to shareholders and believes that ithas the capabilities to achieve the incremental production plans, and increase market value in the interests of all shareholders. The Company has identified implementation of its waterflood projects as the highest priority, and expediting those is key for Range's operations. In addition, the Company plans to drill a number of selective high impact development and exploration wells onshore Trinidad during 2016.

In line with the growth strategy of the Company to create value for shareholders, and to provide Range with additional production and revenue, the Board continues to evaluate potential acquisitions of high quality assets at attractive valuations.

AUDITORS INDEPENDENCE DECLARATION

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 for the half-year ended 31 December 2015 can be found on the following page.

This report is made in accordance with a resolution of the Board of Directors.

David Chen

Chairman

Dated this 15 day of March 2016

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

The Company's potential ordinary shares were not considered dilutive as the Company is in a loss position.

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Note 1: Basis of preparation

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134: Interim Financial Reporting.

The half-year financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, it is recommended that these financial statements be read in conjunction with the annual financial report for the year ended 30 June 2015 and any public announcements made by Range and its controlled entities during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

Impact of standards issued but not yet applied by the entity

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. There were no new standards issued since 30 June 2015 that have been applied by Range. The 30 June 2015 annual report disclosed that Range anticipated no material impacts (amounts recognised and/or disclosed) arising from initial application of those standards issued but not yet applied at that date, and this remains the assessment as at 31 December 2015.

Reporting Basis and Conventions

The half-year financial statements have been prepared on an accruals basis and are based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

New and amended standards adopted by the Group

None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2015 affected any of the amounts recognised in the current period or any prior period and is not likely to affect future periods.

Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Going Concern

The Directors have prepared the financial statements on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

As disclosed in the financial statements, the Group incurred losses of US$25,218,937 for the period ending 31 December 2015. The Group also had net cash outflows from operating and investing activities for the period totalling US$3,665,724, and a net current asset position (excluding assets held for sale) of US$5,704,274.

The Group completed a new equity investment during the period from Sibo. The proceeds from this investment together with the credit terms provided for the Trinidad drilling and waterflood programme by Range's strategic partner, LandOcean are more than sufficient to cover Range's cash requirements for the 12 months from date of sign-off.

The Company is continuing to seek to rationalise the portfolio of non-core assets and redeploy capital to maximise current production from its core assets in Trinidad and pursue growth opportunities that enhance cash generation and returns to shareholders.

The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities that might be necessary if the Group does not continue as a going concern.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

i) The Group recorded an impairment in the period in relation to goodwill on its Trinidad asset. For further details see Note 7.

Note 4: Discontinued operations

In 2013, the Company indicated that it was in the process of disposing of the Company's North Chapman Ranch and East Texas Cotton Valley assets hence the transfer from producing assets to assets classified as held-for-sale in that accounting period. As announced on 23 December 2014 a sale of Range's 100% equity interest in Range Australia (US) Ltd (holder of Texas assets) was agreed with Citation Resources Limited.

During 2014, the Company committed to a plan to dispose of its 45% interest in the unlisted company Strait Oil & Gas Limited (Strait), to place greater focus on the Group's core producing assets in Trinidad.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Note 4: Discontinued operations (continued)

The loss from the discontinued operations of US$ Nil (2014: US$6,268,914) is attributable entirely to the owners of the Company.

Note 5. Contingent liabilities and contingent assets

Colombian exploration licences

In January 2016, Range received notification from Agencia Nacional de Hidrocarburos ('ANH') in Colombia advising that the E&P licences over three exploration blocks (PUT-5, VSM-1 and VMM-7) had been revoked. The licences had been awarded to a Consortium of Optima Oil Corporation ('Optima') and the Company in December 2012. ANH alleges that various obligations and commitments agreed within the exploration licences have not been complied with and also that invalid letters of credit had been presented to ANH by Optima to support the minimum work obligations. The effect of revocation of the licences by ANH is: (i) expiry of the contracts, (ii) Range would be unable to enter into any further agreement with Colombian State for a period of 5 years, (iii) final settlement and liquidation of the licences, and (iv) joint and several liability of the Consortium partners to ANH for all sums due to ANH and for potential damages claim of up to the aggregate financial value of the work commitments of the Consortium for the three licences which totalled approximately US$53million. To date, ANH has not initiated any legal action to seek payment of damages.

A Joint Operating Agreement ('JOA') is in place amongst the Consortium partners. Under the terms of the JOA it was agreed between the Consortium that it was the sole responsibility of Optima to complete the minimum work obligations and to provide all necessary funding, including the provision of valid letters of credit in favour of ANH. Under the JOA, Range has an indemnity to recover from Optima any payment incurred by Range for any contractual obligations under the licences which were not paid by Optima.

Range has engaged legal advisers in Colombia. The Consortium has also engaged separate legal advisers. It is currently anticipated that a claim for the annulment of the ANH decision and restatement of the licences will be submitted to the Administrative Tribunal of Bogota by the Consortium in the coming months. It is not possible at this stage to estimate the length of time it will take the Administrative Tribunal to deliver their decision but Range believes that the full process could take several years to reach a final conclusion. Given the process is still at an early stage, and that, to date, ANH has not initiated any legal action to seek payment of damages, Range is unable to quantify any likely financial impact against the Company at present.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Geeta Maharaj

Range has received an invoice from Geeta Maharaj, a Trinidad based attorney seeking payment of approximately US$1.9million. The invoice purports to relate to legal work undertaken during mid-2014 in the preparation of inter-company loan agreements. Range strongly refutes the amount of this purported invoice and intends to vigorously defend its position.

There are no other material changes since June 2015 to note.

Note 6: Restricted cash

Restricted cash is held in a deposit account that is secured against a bank guarantee given in respect of the Group's work commitments on the St Mary's block in Trinidad. The funds are freely transferrable but alternative collateral acceptable to the bank, would need to be put in place to replace the cash security.

Note 7: Goodwill

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. The Group reported goodwill of US$28,985,013 (30 June 2015: US$46,198,974), which was derived from the acquisition of SOCA Petroleum Limited through the parent's subsidiary Range Resources (Barbados) Ltd.

(a) The Group recorded an impairment based on the carrying value of the cash generating unit exceeding the recoverable amount.

The recoverable amount is based on an asset's fair value less costs to sell (level 3 fair value hierarchy) using a discounted cash flow method and is most sensitive to the following key assumptions:

- 1P and 2P recoverable reserves

- Commodity price of between US$40 and US$80 per barrel dependent on the year.

- Average operating costs estimated at 18% of revenue.

- Post-tax discount rate of 10%

- Licence life until 2032

An adverse 20% change to oil prices, reserves, operating costs and the discount rate would result in additional impairments of US$34.5million, US$16.8million, US$7.1million and US$33.7million respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Note 8: Non-current assets held-for-sale

Significant judgement

During 2014, as part of a strategy to rationalise non-core assets, the Company committed to a plan to dispose its shares in Strait. The Company is in advanced discussions and negotiations surrounding the sale of this asset which is currently anticipated to complete in the coming months. The asset is recognised at its fair value being the expected recoverable value on sale.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Borrowings relate to the financing facility with Lind. In the 2015 financial year, Range received a statutory demand from Lind demanding repayment of approximately US$7.2 million that Lind alleged was due and payable. Range filed an application to the Supreme Court of Western Australia to set aside the statutory demand. This application was unsuccessful and Range subsequently appealed the decision.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Range paid US$5.0 million to Lind on 28 July 2015 and the remaining balance of approximately US$2.2 million was paid following the dismissal of Range's appeal by the Western Australian Supreme Court.

The remaining balance relates to accrued interest payable to Lind at an interest rate of 8.5% p.a.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Options:

The Company has on issue 1,137,156,762(June 2015:788,998,289)options over un-issued capital in the Company.

As at 31 December 2015, the unissued ordinary shares of the Company under option are as follows:

The holders of these options do not have any rights under the options to participate in any share issues of the company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends and, in the event of winding-up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

Key management personnel

The remuneration and fees of board members during the period was as follows:

In addition to the above, there was a change to the assumption of when options will vest, resulting in a change in timing of expenses. Therefore, the following expenses were recognised in relation to share based payments related to the key management personnel during the period.

On 1 September 2015, 25 million options were issued to Mr Nick Beattie.

All options expire on 30 March 2020 with an exercise price of £0.01 per share. The vesting conditions of these options are as follows:

(a) 25% will become exercisable on 30 March 2016.

(b) 25% will become exercisable upon the Company reaching production of 1,500 barrels of oil per day for a continuous 15 day period in Trinidad

(c) 25% will become exercisable upon the Company reaching production of 2,500 barrels of oil per day for a continuous 15 day period in Trinidad

(d) 25% will become exercisable upon the Company reaching production of 4,000 barrels of oil per day for a continuous 15 day period in Trinidad

Other than the above, there are no changes in related party transactions to those reported in the annual report for the year ended 30 June 2015.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

Sibo investment

During the period, the Company received approval at a general meeting of shareholders for the issuance of shares and options to a new investor, Sibo. The total investment was US$30 million at a subscription price of £0.008 per share - the first tranche of the proceeds had been received in the previous financial year, and the remaining US$22.1million was received during September 2015.

At the date of this report, Sibo owned approximately 32% of the share capital of Range. Pursuant to Sibo's contractual right to appoint up to three Non-Executive Directors to the Board of the Company, on 1 October 2015 Range announced the appointment of Mr Yu Wang, a nominee of Sibo, as a Non-Executive Director to the Board.

Management changes

On 27 January 2016, the Board announced that Mr Yan Liu had tendered his resignation as Chief Executive Officer and Trinidad General Manager, effective 31 January 2016. Mr Liu remained on the Board of Directors as a Non-Executive Director.

Legal proceedings - Mark Patterson

During the period, the Company was involved in an arbitration hearing with Mr Mark Patterson who had claimed approximately US$5.8 million. In February 2016, the Company received the final award of the arbitration tribunal who found fully in favour of the Company (with just an immaterial award of costs being made to Mr Patterson).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

(a) Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),

(b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2), and

(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs (level 3).

The following table presents the Group's financial assets and financial liabilities measured and recognised at fair value at 31 December 2015 and 30 June 2015 on a recurring basis:

The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 31 December 2015.

The Group's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the end of the reporting period. There were no transfers between the levels of the fair value hierarchy in the six months to 31 December 2015.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

(a) Valuation techniques used to derive level 2 and level 3 fair values

The fair value of financial instruments that are not traded in an active market (for example, derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. An instrument is included in level 2 when all significant inputs required to fair value an instrument are observable.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The fair value of convertible notes not traded in an active market is determined using an internally prepared discounted cash flow valuation technique using observable inputs (such as share price and the terms and conditions of the convertible notes as disclosed per note 17) and release of the initial calibration adjustment to the profit or loss.

Specific valuation techniques used to value financial instruments include:

· The use of quoted market prices.

· The fair values of the convertible note derivative liabilities and option and share repricing derivative liability is determined based on a Black Scholes option pricing model, based upon various inputs at the end of the reporting period.

During the period, the Group made no changes to the valuation techniques that were applied at 30 June 2015.

(b) Fair values of other financial instruments

The Group has no financial instruments not measured at fair value in the Consolidated Statement of Financial Position.

Due to their short term nature, the carrying amounts of the current receivables, current payables, current borrowings, and current other financial liabilities is assumed to approximate their fair value.

DIRECTORS' DECLARATION

FOR THE HALF-YEAR ENDED

31 DECEMBER 2015

The Directors of the Group declare that:

1. the financial statements comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:

(a) comply with Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(b) give a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the half-year ended on that date.

2. In the Directors' opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

David Chen

Chairman

Dated this 15 day of March 2016

CORPORATE DIRECTORY