ROSE.L Regulatory News (ROSE)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

25 September 2018

Rose Petroleum plc

("Rose", the "Company" or the "Group")

Interim Results for the six months ended 30 June 2018

Rose Petroleum plc (AIM: ROSE), the North America-focused oil and gas company, is pleased to announce its unaudited interim results for the six months ending 30 June 2018.

A copy of the Company's unaudited interim report for the six months to 30 June 2018 will shortly be available from its website http://www.rosepetroleum.com.

Matthew Idiens, Chief Executive Officer of Rose Petroleum, said:

"Following a period of intense activity, we are at a really exciting time in the Company's development as we look to evolve from an oil explorer to an oil producer in the next quarter."

Contacts:

Rose Petroleum plc

Allenby Capital Limited - AIM Nominated Adviser

Cantor Fitzgerald Europe -Financial Adviser and Joint Broker

Turner Pope Investments - Joint Broker

Media enquiries:

Allerton Communications

Notes to editors

Rose Petroleum plc (http://www.rosepetroleum.com) is a North America-focused oil and gas company whose primary asset is approximately 80,000 net acres in the prolific oil and gas producing Paradox Basin in Utah, U.S.A., where it is earning into a 75% working interest. Using high-quality data gathered in a 3D seismic survey completed in October 2017, the Company has identified drilling locations in naturally fractured areas of the Paradox Formation with the intention of commencing a drilling programme in Q4 2018.

The Company's established management is supported by an expert technical team with extensive experience of the basin, where current operations nearby have proven successful, with significant initial production rates and low decline rates, offering strong break even economics.

The Company's strategy is to grow both organically and through acquisition, identifying additional hydrocarbon assets, conventional or unconventional, that would benefit from the Company's fast-acting, entrepreneurial approach.

Rose Petroleum has been quoted on AIM since June 2004.

ROSE PETROLEUM PLC

INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2018

The Board of Rose Petroleum plc ("Rose", the "Company" or the "Group") is pleased to present its unaudited interim report for the six-month period to 30 June 2018.

REVIEW OF ACTIVITIES

OVERVIEW AND OUTLOOK

The period under review has been one of sustained progress, and the Group aims to achieve its key strategic objective of spudding its first well on its acreage in the Paradox Basin, Utah, U.S.A. ("Paradox acreage" or "Paradox") before the end of 2018. The Group is earning into a 75% working interest in approximately 80,000 acres in the Paradox acreage through its joint venture partnership with Rockies Standard Oil Company ("RSOC").

This follows on from the successful 3D seismic acquisition in the fourth quarter of 2017.

The key operational milestones achieved during the period have been:

· the assembling of a high quality operations team with extensive Paradox Basin experience to deliver the project;

· the interpretation of the 3D data;

· completion of an updated Competent Persons Report ("CPR") on the resources within Clastic 21 in the area covered by the 3D acquisition;

· the commencement of the permitting of the Applications for Permit to Drill ("APD") for the first Paradox wells;

· well design engineering and detailed costings of the initial wells;

· the acquisition of further highly prospective new acreage that falls within the 3D shoot area; and

· the engagement with financial and industry partners to obtain funding for the drilling of the first Paradox well and overall development of the project.

This activity has been carried out with continued cash conservation which remains a key priority for the Board.

The work carried out during the period, and particularly the interpretation and resource update work, has continued to highlight the substantial scale, value and geological potential of the Paradox project and it is very much hoped that the drilling operations planned for the fourth quarter of 2018 will enable the Group to unlock the potential of the Paradox acreage and begin to deliver the significant value on offer for its shareholders.

Gaffney Cline & Associates ("GCA") were engaged to prepare the CPR for the acreage of the 3D seismic acquisition held by Rose (the "3D area"), being approximately 17,250 acres of the total acreage held by Rose in Utah. This CPR focused solely on a single reservoir, the Cane Creek reservoir (the "CCR" or "Clastic 21"), of the multiple prospective reservoirs within the Paradox Formation. The CPR upgraded the resource classification from Prospective Resources to Contingent Resources within the 3D seismic acquisition area, and reported, net to the Group, a 2C Contingent Resource of 9.25 million barrels of oil ("MBO") and 18.50 billion standard cubic feet ("Bscf") of gas and an unrisked pre-tax NPV10 of US$122 million. For a full summary of the CPR, please refer to the Group's announcement on 22 June 2018.

The CPR clearly demonstrates the significant potential upside compared to the Group's current valuation. The Paradox Formation is made up of approximately 24 clastic zones, of which the Cane Creek Cycle (Clastic 21) is the primary producing zone of the basin to date. Up to five additional clastics, above the Cane Creek Cycle, are also thought to be prospective. The current CPR only covers a single reservoir interval (Clastic 21) out of these six potential stacked pays and only covers the small portion of the Group's total acreage position covered by the 3D acquisition, providing the opportunity to significantly increase resource numbers on the Paradox project in the future.

The Board also believes that the CPR ratifies the proposed appraisal plans for the Paradox acreage, which will be the first combination of horizontal drilling steered by high quality 3D seismic data on the Group's acreage. A similar approach has proved very successful in the development of the Cane Creek Field analogue directly south of the Group's acreage. Further, we continue to evaluate the remaining Clastic 21 potential outside the 3D area and shallower prospective zones both within the 3D area and outside it, which represent further upside opportunities within the Group's existing acreage footprint.

On 4 April 2018, the Group announced that it had increased its land position in the Paradox Basin with the acquisition of some highly prospective new acreage. The Group acquired a 75% working interest in an additional 3,320 gross acres (2,490 net acres) (the "new acreage") for US$36 per gross acre, resulting in a total consideration of approximately US$120,000.

The acquisition of the new acreage, which is continuous with the Joint Venture's existing acreage and is in close proximity to the producing 28-11 well, was achieved following detailed technical analysis of its geological potential. The new acreage is covered by the Group's 3D seismic survey which shows multiple highly attractive geological structures and potential well site locations.

The prospectivity of the Group's acreage is further underpinned by the existence of the producing 28-11 well which is found just outside the new acreage, 365 metres to the south-west, and produces from a porous and permeable fracture network within Clastic 21, as shown on our 3D seismic. The 28-11 is a vertical well that was drilled by Delta Petroleum in 2006 without the benefit of 3D seismic. It has produced 141,000 barrels of oil equivalent ("BOE"), and represents a key piece of evidence for the presence of a greater fracture network across the area covered by the 3D seismic. In addition to the 28-11 well, three other vertical wells have been drilled within the 3D seismic areal extent and all show the presence of moveable oil within the reservoir matrix. These factors give the Board a high degree of confidence in the potential of the Group's acreage and, as a result, it has been decided to proceed to apply for an APD permit for an additional well location in the new acreage, the 22-1 well, which is also planned as a horizontal well targeting Clastic 21. The APD is expected to be approved shortly.

Given the potential of the new acreage, the Group has been working with the BLM to include this new acreage within the Gunnison Valley Unit ("GVU"), where the Group's operational activity is focused. The addition of the new acreage within the GVU would give the Group more options in terms of first well location. This has been carried out in tandem with ongoing work to manage the existing acreage position and the Unit itself which requires careful oversight, particularly when taking into account the more proactive approach of the BLM towards land usage under the new political administration.

If the BLM approves the proposed plan to include the new acreage within the GVU, then the Group will also be able to propose the next obligation well within this added acreage. The GVU, which covers approximately 60,000 acres, presently requires four obligation wells; the first obligation well has already been completed (GVU 22-9) by Anadarko in 2012 and the Group plans to drill the next one this year. In addition to the 22-1 well, the Group is also in the process of permitting the GVU 29-1 well and the State 16-2L well. The permit approvals are expected to be received shortly.

The current discussions with the BLM in respect of the new acreage and unit reshape are not expected to impact on the Group's timeline on its plan of operations for the drilling programme. We have been working closely with the BLM on permitting in order to achieve this objective. Subject to rig availability and concluding project funding, it remains the Group's intention and expectation to drill its first Paradox well in the fourth quarter of this year.

The Group has assembled a highly experienced subsurface and surface operational team with extensive experience and a successful track record in the Paradox Basin. The team designed, managed and implemented a nine-well drilling programme in the Paradox Basin for Fidelity Exploration and Production Inc., directly to the south of the Group's acreage. Eight of these wells were commercial and production grew from circa 100 barrels of oil per day ("BOPD") to over 3,500 BOPD from 2012 to 2014. As the Group moves through the well selection, permitting and funding processes for the first Paradox well, the Group is already realising the benefits of having such a first class team.

As the Group's activity in the Paradox basin has intensified, Rose has been approached by a number of third parties about potential partnering and investment opportunities in the region. While the Group remains wholly focused on the Paradox project, the Directors believe that they should appraise any additional opportunities further, particularly those comprising producing or near-term producing assets, to see if there may be commercial synergies with the existing Paradox operations and whether they might add value to the Group's portfolio. The Paradox activity will remain the absolute priority, and there are no guarantees that any opportunities reviewed will develop further.

MINING DIVISION

The Group gave a full update on the status of its residual mining asset portfolio in its 2017 Annual Report. There have been no significant developments since the Annual Report was published in June 2018 and the profit from discontinued operations disclosed in the income statement relates to the conclusion of its activities in Mexico.

CUBA OPPORTUNITIES

The Group continues to have an open dialogue with the Cuban national oil company, CUPET, regarding oil and gas licences. We believe that the oil and energy sectors in Cuba will offer excellent potential in the future and we will continue to keep a watching brief for future investment opportunities. The Group is not currently incurring any expenditure in respect of these opportunities.

FINANCIAL REVIEW

The financial information is reported in United States Dollars ("US$").

Income Statement

The Group reports a net loss after tax of US$0.5 million or a loss of 0.41 US cents per share for the six months ended 30 June 2018 (30 June 2017: net loss after tax of US$2.2 million or a loss of 5.78 US cents per share).

The reduced loss for the period when compared to the prior year comparative period is primarily the result of unrealised foreign exchange differences that arise on the restatement of the Company's loans to its subsidiaries. These foreign exchange differences resulted in an unrealised gain of US$0.5 million for the six months ended 30 June 2018 (30 June 2017: unrealised loss of US$0.7 million). The gain in this period is the result of the strengthening of the US dollar against sterling.

Administrative expenses for the period were US$1.0 million (30 June 2017: US$0.9 million), and were consistent with those incurred in the prior year.

Balance Sheet

Intangible assets at 30 June 2018 were US$12.5 million (30 June 2017: US$10.2 million). The primary reason for the increase was the ongoing investment into the Paradox and specifically the 3D seismic acquisition in the second half of 2017.

Cash and cash equivalents at 30 June 2018 were US$2.0 million (30 June 2017: US$0.9 million) and increased as a result of equity fund raises in late 2017 and the first half of 2018.

Outlook

The period under review has seen the Group deliver on many of the key operational milestones required to enable the spudding of its first Paradox well before the end of the calendar year. The Board is looking ahead with confidence and is excited about the Group moving from being an oil explorer to an oil producer in the next quarter.

I would also like to take this opportunity to thank our shareholders, advisers and employees for their continued support.

MC Idiens

Chief Executive Officer

25 September 2018

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2018

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2018

 ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 June 2018

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED)

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2018

ROSE PETROLEUM PLC

APPENDICES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2018

ROSE PETROLEUM PLC

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2018

1. ACCOUNTING POLICIES

Basis of preparation

This report was approved by the Directors on 24 September 2018.

The condensed consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs')

The condensed consolidated interim financial statements are presented in United States Dollar ('US$') as the Group's trading operations, and the majority of its assets are primarily represented in US$.

The Company is domiciled in the United Kingdom. The Company's shares are admitted to trading on the AIM market.

The current and comparative periods to June have been prepared using the accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 31 December 2017, and with those expected to be adopted in the Group's financial statements for the year ended 31 December 2018. This is the first set of the Group's financial statements where IFRS 9 and IFRS 15 have been applied. There is no material impact on the financial statements from the adoption of these standards.

In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', the comparative income statement has been re-presented so that the disclosures in relation to discontinued operations relate to all operations that have been discontinued by the balance sheet date.

Comparative figures for the year ended 31 December 2017 have been extracted from the statutory financial statements for that period which carried an unqualified audit report, did not contain a statement under section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

The financial information contained in this report does not constitute statutory financial statements as defined by section 434 of the Companies Act 2006, and should be read in conjunction with the Group's financial statements for the year ended 31 December 2017. This report has not been audited or reviewed by the Group's auditors.

During the first six months of the current financial year there have been no related party transactions that materially affect the financial position or performance of the Group and there have been no changes in the related party transactions described in the last annual financial report.

Having considered the Group's current forecast and projections, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue operating for at least the next 12 months. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.

The principal risks and uncertainties of the Group have not changed since the publication of the last annual financial report where a detailed explanation of such risks and uncertainties can be found.

2. DIVIDENDS

The Directors do not recommend the payment of a dividend for the period.

3. LOSS PER ORDINARY SHARE

Basic loss per Ordinary Share is calculated by dividing the net loss for the period attributable to owners of the parent company by the weighted average number of Ordinary Shares outstanding during the period. The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

Due to the losses incurred, there is no dilutive effect from the existing share options, share based compensation plan or warrants.

In the period to 30 June 2018, the exercise price of the share options and warrants is greater than the market price and diluted earnings per share is the same as basic.

4. INTANGIBLE ASSETS

5. SHARE CAPITAL

The Deferred Shares are not listed on AIM, do not give the holders any right to receive notice of, or to attend or vote at, any general meetings, have no entitlement to receive a dividend or other distribution or any entitlement to receive a repayment of nominal amount paid up on a return of assets on winding up nor to receive or participate in any property or assets of the Company. The Company may, at its option, at any time redeem all of the Deferred Shares then in issue at a price not exceeding £0.01 from all shareholders upon giving not less than 28 days' notice in writing.

On 18 September 2017, the Company consolidated every 100 Ordinary Shares at 0.1p each into one 'consolidated share'. Immediately following the consolidation each 'consolidated' share was sub-divided into one New Ordinary Share and one New Deferred Share. The sub-division was structured in such a way that each of the New Ordinary Shares retained the nominal value of 0.1p each. The New Ordinary and Deferred Shares have the same rights as the existing Ordinary and Deferred shares.

ISSUED ORDINARY SHARE CAPITAL

On 28 September 2017, the Company issued 60,000,000 Ordinary Shares of 0.1p each at a price of 0.4p per share, raising gross proceeds of US$3.2 million (£2.4 million).

On 10 October 2017, the Company issued 15,000,000 Ordinary Shares of 0.1p each at a price of 0.4p per share, raising gross proceeds of US$0.8 million (£0.6 million).

On 10 May 2018, the Company issued 11,264,000 Ordinary Shares of 0.1p each at a price of 0.325p per share, raising gross proceeds of US$0.5 million (£0.4 million).

On 22 May 2018, the Company issued 19,505,231 Ordinary Shares of 0.1p each at a price of 0.325p per share, raising gross proceeds of US$0.85 million (£0.6 million).

In addition, for each share issued in May 2018, the subscriber received a warrant for a new Ordinary Share at a price of £0.65p per share, resulting in the issue of 30,769,231 warrants which are exercisable at any time until May 2020.

The information shown above has been restated to reflect the share consolidation which took place on 18 September 2017.