Range Resources Limited

ABN 88 002 522 009

Annual report for the year ended 30 June 2015

Range Resources is a growing dual listed (ASX: RRS and AIM: RRL) E&P company with the largest private onshore acreage in Trinidad. The Company has established a stable funding position for its growth through a number of attractive equity, supplier and trade finance packages. The Company's objective is to create sustainable shareholder value by growing oil production, developing discovered resources and continuing exploration on its highly prospective assets.

Attractive Investment Proposition:

Highly prospective assets

• Largest private onshore acreage in world class petroleum province of Trinidad

• Combination of current production from infill drilling, implementation of waterflood projects, combined with highly prospective exploration acreage on two new blocks

• Solid reserve base in proven reservoirs

  
  

  Funded work programme

• Equity funding of US$30 million completed at a significant premium to the share price

• 12-month credit facility on drilling services in place

• US$50 million trade financing secured

  
  

  Strong strategic partner

• Integrated Master Services Agreement in place with LandOcean

• LandOcean provides full oilfield operations services to Range in Trinidad with four new drilling rigs added to the fleet

  
  

  Extensive drilling campaign underway

• Nimble, low cost operator

• Active drilling campaign of 22 exploration and development wells commenced

• First exploration well to be spudded in Q4 2015

  
  

  Streamlined operations and non-core asset rationalisation

• The sale of the drilling business, Texas assets, Citation Resources equity stake completed

• Puntland exit completed; Georgia and Guatemala exits continue

  
  

  Liquid stock

• Combination of cornerstone / retail investors: Directors and Management invested personally

  HIGHLIGHTS OF THE FINANCIAL YEAR

  
  

• Funding secured: Despite a challenging market for junior E&P companies, Range has established a stable funding position for the growth of the Company through attractive equity and supplier financing packages. In addition, the Company is looking to finalise a trade financing of up to US$50 million.

  
  

• Cutting costs and streamlining operations: The Board has been focused on driving efficiency and cost reduction by streamlining the scale and geographic footprint of non-core and cash draining businesses; and a reduction in G&A costs which have shown a material decrease in the last year, with the Company striving to reduce these costs even further. During the year, the Company has successfully completed the sales of its drilling business, Texas assets, Citation Resources equity holding and an exit from Puntland. These assets required capital funding so each disposal has eliminated imminent spending commitments whilst raising cash for the Company (during the year Range raised approximately US$5 million from these disposals).

  
  

• Trinidad operations: The Board is confident that the financial year of 2016 will be pivotal in improving operational performance and growing production (the average production for the period was 562 bopd). The expected access to four brand new drilling rigs during Q4 2015 will be crucial to improving capabilities and limiting the downtime of Range's development and exploration operations. The Company has finalised a 22 development and exploration well work programme, which commenced subsequent to the period end. In addition, the Company has commenced exploration operations on the two highly prospective St Mary's and Guayaguayare blocks. Waterflood projects are also progressing, with water injections planned to commence once the necessary approvals have been received.

  
  

• Licences: The Company successfully signed the Exploration & Production licence and negotiated the Joint Operating Agreement on the new St Mary's block. Range also completed assignment of the partial interest and the operatorship on the Guayaguayare block and applied for the approvals to transfer the remaining interest and extension of the PSCs.

  
  

• Environmental: Ongoing activities to comply with existing licence obligations and in preparation for drilling and exploration across five blocks in Trinidad.

  
  

• Financial: As a result of the actions taken by the Board and management, the financial performance during the year has substantially improved compared to the prior year. Despite the overall loss still recorded there is a notable, positive trend in financial performance with particular improvement being seen in key areas between the first and second half of the year.

  • The Consolidated Statement of Profit or Loss and Other Comprehensive Income for the financial year shows a net loss attributable to owners of US$30,279,054 (2014: net loss of US$102,541,990).

     The Group's revenue was US$13,152,954 (2014: US$21,185,745). The decrease of US$8,032,791 was primarily due to lower oil prices during the period.

  • The net loss after tax from continuing operations was US$22,581,895 (2014: US$59,096,590). Decrease in loss primarily due to large numbers of write-offs in the prior year.

  • Net cash outflow from operating activities for the period was US$6,955,264 (2014: outflow US$6,221,781).

  • General and administrative costs overall decreased by US$4,537,360 to US$9,948,494 (2014: US$14,485,854) as a result of cost cutting measures implemented across the Group.

  • The net assets of the Group decreased by US$14,271,807 to US$95,023,456 (2014: US$109,295,263). This decrease is primarily due to impairments made in the year to the Group's Georgian assets (impairment of US$5,000,000) and Guatemalan assets (impairment of US$1,779,476), and other losses made by the Group.

CONTENTS

Chairman's Statement 5

Chief Executive's Statement 7

Corporate Social Responsibility 12

Corporate Governance 14

Directors' Report 24

Auditor's Independence Declaration 50

Financial Statements

Consolidated Statement of Profit or Loss and Other Comprehensive Income 51

Consolidated Statement of Financial Position 52

Consolidated Statement of Changes in Equity 53

Consolidated Statement of Cash Flows 54

Notes to Financial Statements 55

Directors' Declaration 108

Independent Audit Report 109

ASX Additional Information 111

CHAIRMAN'S STATEMENT

Dear Shareholder

On behalf of the Board of Directors, I would like to send a very warm welcome to all shareholders as this is the first Annual Report of the Company that we have the honour of presenting.

Despite the challenges facing the energy sector during the period, the last financial year was a year of change and unprecedented activity for the Company, and the progress made so far by our team has been extremely encouraging. With renewed leadership six months into the financial year, we were able to achieve a number of significant milestones in a relatively short period. We have completed an important equity transaction with a cornerstone investor at a significant premium to the share price and secured a credit facility with our strategic partner and oilfield services provider LandOcean, which not only allowed the Company to commence its work programme, but also enabled us to repay invoices through future cashflows.

Following a thorough review, we have adopted a revised Company strategy to focus on growing, managing and operating our upstream assets. We have driven efficiency and cost reduction by streamlining the scale and geographic footprint of our business. We successfully completed a number of non-core asset divestments, including sales of the drilling business, Texas assets, and equity holding in Citation Resources, as well as withdrawal from Puntland. For the first time in Range's history, following the sale of the drilling business, the Company has positive operating cashflows from its Trinidad operations.

During the year, we have successfully signed the Exploration & Production licence on St Mary's block and PSCs and operatorship on the Guayaguayare block. The first exploration well on the Guayaguayare Shallow PSC is expected to spud during Q4 2015. Range is one of the only operators to be undertaking an extensive exploration campaign onshore Trinidad. We feel extremely privileged to be in this advantageous position compared to our peers and very much look forward to our continued progress with these exciting opportunities.

Waterflood projects are also progressing well. During the year, Range and LandOcean have been evaluating multiple waterflood blocks on Beach Marcelle, South Quarry field, and Morne Diablo fields. Water injections are planned to commence during 2016 and the projects will play a key role in our next stage of growth as oil producer.

The progress made to date is a testimony of the impressive work that our team has achieved and validates the Company's strategy, prospectivity of the assets and the potential to achieve significant oil production growth. There is no doubt that the next few years will bring many challenges for the Board, management team and employees. However, we will continue to be focused on improving the results by executing a bold and simple agenda - expand drilling activities, grow production and cashflows.

I was extremely encouraged by the Directors and management team participating in the share purchases during the year to a value of US$300,000. By making personal investments, we have further aligned our and shareholders' interests and demonstrated our commitment and belief in the Company and return on the investment.

During the next financial year, shareholders can look forward to a number of key developments and steady positive newsflow, including:

• Drilling programme of initial 22 wells, aimed at production and cashflow growth

• Implementation of large scale waterflood projects

• Exploration programme on the Guayaguayare block, including drilling of at least two exploration wells

• Exploration programme on the St Mary's block, including audit of existing field infrastructure, facilities and wells and tendering for drilling rig, equipment, and other oilfield services

• Remaining non-core asset divestments (Georgia, and Guatemala)

• Continued reduction of G&A costs and streamlining of operations

• In line with the business growth strategy of the Company, the Board continues to evaluate potential acquisitions of high quality, near-term oil production assets at attractive valuations, which will create value for shareholders, provide Range with additional production and revenue, and leverage our partner's capabilities and resources.

The creation of long-term value for our shareholders remains the fundamental driver of everything we do and we look forward to demonstrating this as we develop our ambitious plans and achieve our goals. With the Company's highly prospective licences, drilling underway, and funding in place, I believe the Company is well positioned for future success by growing production and reserves, and transforming Range into a significant oil producing company, which is not yet reflected in today's share price.

CHAIRMAN'S STATEMENT (continued)

On behalf of the Board, I thank all our shareholders, for your continued support through this past year and as we move forward and look forward to further success in the future.

Yours sincerely,

David Chen Chairman

CHIEF EXECUTIVE'S STATEMENT

Dear Shareholder

Welcome to Range's Annual Report.

Introduction and progress overview

I joined Range mid-way through the financial year and have been encouraged by a portfolio of very attractive assets in Trinidad that the Company has built with experienced management team to support the future growth.

Given the low commodity price environment, we had to take a number of immediate actions in order to preserve cash and control costs. As a result, we completed a number of non-core asset divestments and streamlined our operations, which allowed us to focus our time and resources on growing our core assets. As a result of the drilling business sale, we have reduced our headcount across the Group from over 250 to 32. Our G&A costs were down significantly by 32% during the period and we are continuing to target cost savings across the business and improving efficiencies of our operations through maximising production and minimising downtime.

The newly completed funding with Sibo is transformative for the Company, and provides us with capability to progress with our work programme. I would like to thank Sibo for the support during the times of challenging markets. It is hugely significant for the Company to have such a supportive professional cornerstone investor, as we develop our ambitious plans.

In addition, LandOcean in conjunction with Sinosure are looking to provide Range with up to US$50 million. The package will provide us with further funding flexibility to fully exploit the Trinidad assets and we are hoping that it will be finalised shortly.

During the year, we have worked on enhancing our internal control and risk management processes to ensure they are implemented across our operations. Numerous policies and procedures to mitigate the risk (as described in more detail in the Directors' report) were implemented. Regular revision and reviews are conducted by the management with oversight at the Board level.

In addition to my CEO position, I have extended my role to that of Trinidad General Manager, focusing on managing the Trinidad business, growing production and driving profitability. Together with the local management team, we have been working on improving forward planning in permitting as much as possible, and have implemented new tracking systems which resulted in several of the approval application processes becoming more standardised. In addition, along with other operator companies in Trinidad, we have been working with the relevant authorities to define better guidelines, which have led to improved submissions and approval timelines. We are extremely pleased with continued support from the government of Trinidad and Tobago, and will continue to actively engage and cooperate with the government on our growth plans and strategy.

With funding in place, addition of four new rigs to the drilling fleet, and LandOcean as a key oilfield services provider, we are confident that we will be able to deliver on our plans and drill in excess of 20 exploration and development wells during 2015/ 2016. By expanding our drilling campaign and improving our knowledge of the reservoirs, not only we are aiming to achieve material production growth, we are also hoping to grow our reserves base.

Health, safety, and environment (HSE)

During the year, Range continued with its commitment to safe operations. Health and Safety inspections were regularly performed on all the assets, with no major issues identified. The management has HSE reporting and review processes as part of its operational management in place, which are regularly reviewed by the Board.

The chart below demonstrates the HSE performance during the year.

CHIEF EXECUTIVE'S STATEMENT (continued)

The Company is achieving a Lost Time Incident frequency rate of 2.5 which is below to that reported by the American Petroleum Institute for the onshore US Oil & Gas Industry.

During the year, the Company has successfully completed its accreditation process in Trinidad as per STOW ('Safe to Work') requirements and was granted two years certification, effective December 2014. This was a result of implementation of the various HSE management systems, and we will continue to manage, monitor and lend support towards the continued focus on HSE through effective leadership and involvement.

In addition, during the year Range's HSE and gathering station teams won a number of awards at Petrotrin's annual HSE Leadership Forum including the top award for best all round lease operator. I am pleased to acknowledge all the efforts and hard work from the team members for these achievements and hope that we will continue with such a dedication in 2016 and beyond.

Production

During the year, our average production of approximately 560 bopd was largely unchanged from the previous year. The lack of production growth was a result of few wells drilled during the year caused by failures of old rigs and equipment. In addition, results from the South Quarry development wells were disappointing and did not achieve the production rates that were anticipated.

Despite being disappointed by lack of new drilling during the period, it is important to recognise the hard work of our production team in Trinidad. As a result of 290 well workovers that were completed during the period, we were able to maintain the current production levels.

Total net production attributable to Range during the period was 205,209 bbls, which in turn generated revenue from sales of over US$13 million. We are confident that the production and cashflows from our Trinidad operations will show significant growth during FY 2016. Our previously announced production target of 1,000 bopd by the end of Q4 2015 remains unchanged.

Operational review - Trinidad

During the year, 11 development wells were drilled on the Company's Morne Diablo and South Quarry licences. Range and LandOcean have initiated a detailed analysis of the Company's three producing fields and the drilling results from the previous wells, aimed at improving the understanding of the structures and reservoirs. Further studies are ongoing. In addition, a number of past performance issues were identified, including a poor selection of previous drilling locations and targets, as well as engineering failures during

CHIEF EXECUTIVE'S STATEMENT (continued)

drilling operations. The poor condition of the old rig fleet was also a major contributing factor for missed production targets in the past.

Therefore, I firmly believe that the next financial year will show substantial improvement in operational performance. With increased knowledge of the fields, we will be able to select the most prospective well locations, and thus increase economics from the future drilled wells. The addition of new rigs will also be pivotal to improving results and limiting the downtime of Range's development and exploration operations.

Subsequent to the year-end, we finalised the initial 22 development and exploration well programme, with the first well having spudded in September 2015. It is expected that the proposed wells will be drilled by the end of Q1 2016. We are optimistic about this target, however the drilling schedule remains subject to a number of variables, including availability of suitable rigs, arrival and commissioning of new rigs into RRDSL's rig fleet, various regulatory approvals, and the construction of drilling pads. RRDSL will also be required to recruit additional drilling staff to operate the new rigs.

We have also commenced Electromagnetic Surveying in our fields. This technology is used to image shallow resistive bodies and identify possible oil reservoirs at depths of 1,000 ft. or less, thus reducing exploration and development risks at a relatively low cost with minimal environmental impact.

I am particularly excited about commencing the waterflood projects on our Beach Marcelle and Morne Diablo fields during 2016. It is a large scale operation, which will be an essential component of our production growth. Surface facility planning and scheduling for implementation are currently underway. It will take approximately 6 months after injection commences until we can experience production growth, so we are likely to see the rewards towards 2017.

Exploration

Exploration is critical to the growth of any oil & gas company, and we are delighted to have finalised the agreements on two large and highly prospective blocks during the year - the Guayaguayare and St Mary's blocks. On the Guayaguayare block, we were also successfully awarded the operatorship and are finalising the transfer of the full remaining interest of Niko in the block. Both blocks have exciting prospects and we believe they will play a key role in our asset portfolio with plenty of newsflow to offer to our shareholders.

On the Guayaguayare block, we are looking to drill an initial two exploration wells (one shallow and one deep) during 2015 and 2016. We have also commenced exploration programme on the St Mary's block with the audit of existing field infrastructure, facilities and wells currently underway. In addition, we provided the MEEA with the required performance bond of US$8 million in support of the minimum work obligations on the licence.

Strong strategic partnership with LandOcean

We are delighted with our continued partnership with LandOcean, an emerging provider of a wide range of technical and production services, which not only provides us with access to sophisticated oilfield services provider but also additional financial backing and support.

During the previous financial year, we entered into an Integrated Master Services Agreement, whereby LandOcean will act as the preferred oilfield services contractor to Range in Trinidad. Under the first US$5 million purchase order (which was entered into in June 2014), LandOcean provided geological and engineering studies of secondary recovery projects, as follows:

• Screening study of all likely potential horizons and areas that could benefit from waterflooding in all three fields (Morne Diablo, South Quarry and Beach Marcelle);

• Technical review of additional reserves and production rates that could be achieved by waterflooding priority areas, including new well requirements and re-use / recompletion of existing wells. Identification of water volume requirements for waterflooding;

• Cost estimates of subsurface and surface infrastructure requirements for each waterflooding project, plus screening economics of each project;

• In collaboration with Range, identification of four priority waterflood projects (three in Beach Marcelle, and one in Morne Diablo); and

• Joint presentations to Petrotrin and the MEEA of detailed waterflooding plans for these four priority projects.

  CHIEF EXECUTIVE'S STATEMENT (continued)

  
  

  Subsequently, in December 2014, Range entered into the second purchase order of further US$50 million, which covers a wide range of activities over the coming years.

  
  

  During the year, LandOcean also acquired Range's drilling business in Trinidad and added four brand new drilling rigs to the fleet, which are expected to be available for operations from Q4 2015 to ramp up Range's drilling activities. The sale of the drilling business has allowed us to focus time and resources on efficiently running Range's upstream assets and growing production, as well as transferring operational performance risk, improving financial stability and planning.

  
  

  In addition, LandOcean agreed to provide Range with an extended 12 month credit facility on its services, which allowed the Company to commence its drilling programme and make repayments from future cashflows.

  
  

  We are very grateful to LandOcean for their support and will continue to work with them to achieve further cost savings, optimisation and improved operational efficiencies.

  
  

  Non-core assets

  
  

  During the year, we continued with non-core asset rationalisation, and have completed sales of the Texas assets, Citation Resources equity stake, and exit from Puntland. We believe that it was in the best interest of all shareholders as these assets required imminent spending commitments which outweighed the potential return. During the next financial year, we are aiming to dispose of our interests in Guatemala and Georgia, and will keep our position in Colombia under review.

  
  

  Financial review

  
  

  As a result of the actions taken by the Board and management, the financial performance during the year has substantially improved compared to the prior year. Despite the overall loss still recorded there is a notable, positive trend in financial performance with particular improvement being seen in key areas between the first and second half of the year:

  
  

• The Group's revenue was US$13.2 million (2014: US$21.2 million), a decrease of approximately 38%, whilst Group's gross loss fell by 19% to US$2.9 million (2014: US$3.6 million). Revenues were clearly affected from low oil prices during the year, with an average WTI realised price of US$69.46/bbl (2014: US$101.33/bbl). However, the impact at an operating level was somewhat negated due to the Supplemental Petroleum Tax ('SPT') structure in Trinidad - at WTI oil prices below US$50 per barrel no SPT is payable. The Company continues to monitor the oil price as well as those related markets that could impact the Company's future project and operational development plans;

• The Group's loss after tax was reduced substantially compared to the prior year at US$30.3 million (2014: US$102.5 million);

• There were a number of exceptional and one-off charges during the year (including asset write- downs and loss on disposal) and the Group's net loss before tax from continuing operations prior to any exceptional costs also showed a marked improvement on the prior year at US$20.4 million (2014: US$40.5 million). There was an additional positive trend during the second half of the year which reflected a loss of US$7.9 million (compared to US$12.5 million in the first half);

• General and administrative costs overall decreased by 32% overall during the year and totalled US$9.9 million (2014: US$14.5 million). Notable again is the positive trend during the second half of the year when G&A costs were US$3.2 million (compared to US$6.7 million in the first half). This was achieved as a result of cost cutting measures implemented by the Board;

• The Group's EBITDA also showed improvement half year on half year, falling from a loss of US$16.7 million in H1 to US$6.9 million in H2;

• Net cash at 30 June 2015 was US$10.5 million (2014: US$3.0 million). This increase was largely a result of new equity financing completed during the year;

• Cash outflow from operating activities was broadly stable on the prior year (despite reduction in average oil price) at US$7.0 million (2014: outflow US$6.2 million); and

• Net cash inflow from investing activities was US$0.4 million (2014: outflow of US$8.1 million). Current year inflow was primarily a result of asset sales offsetting the continued investment made in Trinidad during the year.

  
  

  CHIEF EXECUTIVE'S STATEMENT (continued)

  
  

  Summary

  
  

  Last year we were focused on cutting costs across the Group and driving forward our development programmes in Trinidad with the goal of achieving production and cashflows increase. Despite numerous challenges that we've had to overcome, we believe that the next year we can realise on our potential and unlock the true value of our assets. We have an extremely busy year ahead of us, with plenty of newsflow to offer to our shareholders.

  
  

  The Company has solid production assets with substantial reserves and potential to significantly increase production; exploration upside; funding in place; and the team committed to growing shareholder value.

  
  

  On behalf of the Board, management and employees, I would like to thank our loyal shareholders for their support as we progress through the period of high activity. I am extremely grateful to be part of the management team of the Company with such tremendous potential and look forward to focusing on valuable returns for our shareholders.

  
  

  Yours Faithfully

  
  

  
  

  Yan Liu

  Chief Executive

  
  

  CORPORATE SOCIAL RESPONSIBILITY

  
  

  Range is committed to operating in a socially responsible way with the highest standards of Business Ethics, Environmental Awareness and Health & Safety by:

• Ensuring the health and safety of its employees and contractors;

• Preserving and protecting the environment; and

• Cultivating a harmonious relationship with the local communities and key stakeholders.

  
  

  Health, Safety and Environment ('HSE')

  
  

  Range is committed to 'Operational Excellence', a core value that drives achievement of its sustainable growth and financial performance. The Company's vision of 'Zero Harm' is that 'no one gets hurt and nothing gets harmed' and as a result HSE performance is a critical element of our Operational Excellence goal. It is, therefore, the Policy of the Company, and far as is reasonably practicable, to:

• Implement and maintain HSE management systems to prevent accidents, occupational injuries, illnesses and environmental incidence;

• Meet or exceed compliance with all applicable HSE laws and regulations;

• Ensure the provision and maintenance of a safe work environment, safe equipment and work procedures;

• Foster a culture where all employees and contractors are held accountable for following all Company Policies and Procedures;

• Provide appropriate training, re-training and supervision to maintain the competence levels of all employees to safely perform their duties;

• Promote the development of a positive Health and Safety culture;

• Ensure timely investigation and reporting of all HSE related incidents; and

• Conduct regular reviews of the Company's Policies and Procedures.

  Concern for the environment is of utmost importance to Range where our policy is to minimise our potential environmental impact by striving to:

• Protect the natural environment;

• Implement a cost effective waste and emissions management programme to prevent and control pollution;

• Manage, monitor and communicate our environmental performance; and

• Integrate environmental considerations into all our business processes and strive for continuous improvement.

Ethics and Principles

Range's employees share a responsibility for ensuring that they conduct business in an open, honest, and ethical manner and maintain the highest standards of integrity; and through corporate governance measure, audit and publicly report performance on Corporate Social Responsibility programmes.

Anti-bribery & Corruption ('ABC')

Range has a zero tolerance approach with respect to its Anti-bribery and Corruption policy, procedures and implementation and complies with all applicable laws and regulations of the countries in which it operates. It is the responsibility of all Range employees to ensure that none of Range's businesses engage in practices which infringe legal or regulatory requirements or which fall below the highest standards of ethical business conduct.

Any Range employee engaging in business practices which infringe legal or regulatory requirements or fall below the highest standards of ethical business conduct may be subject to disciplinary action which may lead to dismissal and may face personal criminal or civil liability.

It is the responsibility of all Range employees to ensure that they report any infringement or suspected infringement of legal or regulatory requirements or the highest standards of ethical business conduct to the management of the Company.