ROK Resources (ROK.V) Update - June 18

[dan_s]

REGINA, SK / ACCESS Newswire / June 18, 2025 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK)(OTCQB:ROKRF) is pleased to announce a revised long-term incentive plan with the introduction of a restricted share unit plan ("RSUs" or the "RSU Plan"). The RSU Plan reflects the Company's long-term objectives to: (i) adopt industry best practices to retain/attract talent, and (ii) align officers' and directors' interests with shareholders.

Details of the RSU Plan are as follows:

Minimum Company Ownership Requirements:

> President and CEO to own no less than 3x their annual salary of the Company.

> Other officers to own no less than 2x their annual salary of the Company.

> Directors to own no less than 3x their annual retainer of the Company.

Non-Dilutive: RSUs to settle in cash.

Vesting Provisions:

For officers, RSUs vest as to one-third immediately with an additional one-third vesting each anniversary of the grant.

For directors, RSUs vest only upon resignation or a change of control event.

As part of the restructuring of the long-term incentive plan, all officers and directors have agreed to forfeit their options and will be entering into agreements with respect to same in due course. This will result in 11,910,000 options being forfeited by officers and directors, which represents 67% of options currently granted, and leaving only 5,760,000 options outstanding. < All of the 113.1 million outstanding warrants expired on March 4, 2025.

NCIB Update

The Company continues to move forward with the normal course issuer bid ("NCIB") to purchase and cancel up to 10% of the Public Float of the Company's issued and outstanding Common shares, as discussed in the Company press release dated June 5, 2025. The Company considers it an effective use of its financial resources to repurchase its Common Shares when the market price of the Common Shares does not fully reflect their underlying value. Shareholders of the Company will be advised of the progress of the NCIB in the next quarterly report of the Company to be filed on SEDAR+. < Based on my forecast, the current share price is less than 50% of my estimated break-up value.

Financial Update

Subsequent to the unwinding of its crude oil swap hedges which generated proceeds of $6.29 million, as outlined in the Company press release dated May 7, 2025, the Company continues to maintain a positive working capital balance with no outstanding debt balance. The Company currently maintains a $5.0 million revolving demand credit facility with a Chartered Canadian Bank which is currently unutilized.

About ROK

ROK is primarily engaged in petroleum and natural gas exploration and 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".
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Bryden Wright, ROK's new President & CEO will be speaking at the EPG Houston Luncheon on June 19th (tomorrow).

[dan_s]

ROK Resource's President & CEO, Bryden Wright, and Senior VP of Land & Business Development, Jared Lukomski, made an outstanding presentation at our luncheon in Houston on June 19. We had a high-quality group of attendees with lots of industry experience in the room that asked a lot of good questions. ROK is being built for sale when they complete 20-30 more wells in SE Saskatchewan.

I will be updating my forecast/valuation model. < It has been posted to the EPG website.
> They will kick off their 2025 drilling program August.
> They will have more than enough operating cash flow to fund a 10 well program. These new wells will all qualify for a "Royalty Exemption" on the first 35,000 bbls of oil, so full company royalty rate should go from 17% in Q3 to 15% in Q4.
> Production will be down ~7% from Q1 to Q2 because they did not complete any new wells since November, 2024.
> Production will be up slightly in Q3 and then up about 600 Boepd in Q4. 2025 exit rate should be ~4,500 Boepd.
> If WTI does average $75US/bbl in 2026, I expect them to have a winter drilling program that completes 4 new wells in Q1 2026 and increases my 2026 full year production forecast to 5,000 Boepd. < Compared to 3,941 Boepd actual production in Q1 2025.
> I am going to assume that WTI averages $70/bbl in Q3 and $72.50/bbl in Q4 2025. The Israel/Iran war is not going to end quickly.
> The New Restructured Long-Term Incentive Plan (announced June 18) will reduce the fully diluted share count to ~226,000,000 shares < Based on just the Company's December 31, 2024, 3rd party reserve report (very conservative) the PV10 Net Asset Value is $0.78Cdn per fully diluted share.
> They do plan to buy back 10% of the outstanding stock over the next 18 month, so outstanding stock at the end of 2026 s/b ~200 million.

Based on my updated forecast/valuation model, which I think is still conservative, ROK.V has a current fair value of $0.42Cdn per share.

It closed yesterday at $0.195Cdn