ROK Resources Files Financial Results for the Second Quarter of 2023 and Provides Lithium Update

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

REGINA, SK / ACCESSWIRE / August 17, 2023 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK) has filed its interim Financial Results and Management Discussion & Analysis for the three and six months ended June 30, 2023 and provides an update on the second lithium well drilled.

Q2 2023 HIGHLIGHTS

• Production up 8% YoY: Production was up 8% from 3,054 boepd in Q2 2022, to 3,297 boepd in Q2 2023.
• Net Debt reduced by 90% YoY: Net debt was reduced from $38.4 million at June 30, 2022, to $3.8 million. Note: 2023 net debt calculation is inclusive of $7.2 million of the current portion of hedges to be realized in the next 12 months based on mark-to-market fair value.
• Term loan fully repaid: The Company fully repaid its non-revolving Term Loan, 20 months prior to expiry without penalty. Since March 2022, the Company has retired more than $60 million of debt.
• Credit facility renewed: The Company renewed its $22.5 million revolving credit facility.
• 2024 - 2025 hedges unwound: The Company made the strategic decision to unwind certain 12 to 24-month commodity swap hedges with the elimination of this requirement with the termination of the Term Loan.
• Lithium National Instrument 43-101 Technical Report Released: The Company announced the results of Hub City Lithium Corp.'s ("Hub City Lithium") National Instrument 43-101 technical report confirming an inferred lithium resource of 1.15 million tonnes of lithium carbonate equivalent.
• Delineated Viewfield lithium asset: Drilled the second lithium test well at Viewfield and confirmed high Lithium concentrations.

2023 CORPORATE OUTLOOK

The first six months of 2023 were focused on corporate debt reduction, accretive asset purchases, non-core divestitures and the integration of new assets, as well as the restructuring of the Company's hedge book to provide greater exposure to an inclining commodity price environment. Total debt was reduced by over 90% year-over-year, which has provided the Company with the flexibility to allocate additional development capital across some of the most economic plays in North America. Given the significant delivering in the first half of the year, the Company will utilize a portion of its spare debt capacity but will continue to target a D:CF level of 0.5. ROK will focus the next 12-18 months on organic production growth and will continue to evaluate strategic, tuck-in acquisitions in core operating areas. Consistent with previous disclosure, the Company's capital program remains weighted to the second half of 2023, with a focus on Southeastern Saskatchewan light oil growth. The capital budget remains unchanged at approximately $30 million and the Company continues to target a 4,500 boepd exit rate at December 31, 2023.

In summary, the Company is pleased to provide the following guidance for the remainder of 2023:

• Capital budget unchanged at $30 million
• 9 to 11 gross drilling locations targeting highly economic, light oil plays in Southeast Saskatchewan
• Exit 2023 production target of 4,500 boepd
• Exit 2023 net debt of $16-$17 million, before inclusion of any mark-to-market fair value of hedges

Q2 2023 SUMMARY

In Q2 2023, the first full quarter since the closing of the Acquisition (as defined from the news release dated January 24, 2023), the Company realized average daily production volume of 3,297 boepd (62% Liquids), resulting in crude and natural gas sales of $17.7 million oil and natural gas sales and realized hedge gain of $2.4 million. This generated a net operating income of $6.9 million, after royalties, operating expenses, and processing and other income.

The Alberta wildfires affected ROK's Kaybob, Alberta operations, resulting in production shut-ins of ~250 boepd (80% natural gas) over the period. Production has recently been restored; however periodic production shut-ins are expected throughout Q3 2023 due to ongoing constraints of 3 ^rd party facilities. In addition, as is customary for spring in Saskatchewan and Alberta, road bans reduced production by approximately 50 boepd for the period.

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, increased in Q2 2023 when compared to previous periods. This can be attributed to increased gas gathering costs associated with acquired production assets, in addition to a cost per barrel increase due to the temporary shut-ins of production. With the integration of the new assets, workover & well repair costs increased as previously down wells were brough back online. The Company expects these costs to normalize back to previous levels through the remainder of 2023, with estimated annualized operating expenses of $27 to $28 per boe, inclusive of transportation. Uncertainty around ongoing inflationary effects on operating costs will continue to be a contributing factor.

Capital expenditures in the quarter totaled $4.1 million, which included the early spud of the Company's first drilling location. The remainder of capital expenses were attributed to the recompletion and workover of newly acquired wells, core land purchases, abandonment and reclamation work and expenses related to the Hub City Lithium operations.

NET DEBT

Net Debt as at June 30, 2023, and December 31, 2022, as outlined below:

⁽¹⁾ Represents undiscounted face value of debt balances and lease obligations outstanding as of each respective date presented.
⁽²⁾ Calculation of adjusted working capital excludes current portion of debt as presented on the statement of financial position. The mark-to-market fair value of the current portion of risk management contracts is included within adjusted working capital.

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.

Complete reports and statements are available on SEDAR+ at www.sedarplus.ca and on the Company website www.rokresources.ca.

LITHIUM UPDATE

The Company, as a twenty-five (25%) percent shareholder and manager of operations of Hub Cit Lithium, is pleased to announce successful results from a multi-layer perforation and swab test of a second targeted lithium well located in the Viewfield Area of Saskatchewan. The successful step out well was approximately 800 meters east of the Viewfield discovery well (see press release dated February 21, 2023).

Third-party laboratory testing returned lithium concentrations in the Duperow formation of up to 237 mg/l (the "Test Results"). According to public records, these Test Results are among the highest lithium concentrations recorded in a brine in Canada to date. For Detailed Test Results refer to Figure 1.

Test Results - Figure 1