RED EMPEROR RESOURCES NL – Half-yearly Report

14 March 2016

Red Emperor Resources NL

Half Year Report for the Period Ending 31 December 2015

Please see below extracts from the Company's Half Year Report for the period ended 31 December 2015, being the:

• Directors' Report
• Consolidated Statement of Comprehensive Income
• Consolidated Statement of Financial Position
• Consolidated Statement of Cash Flows

A copy of the entire Half Year Report is available on the Company's website - www.redemperorresources.com

For further information please visit www.redemperorresources.com or contact:

Red Emperor

Greg Bandy +61 8 9212 0102

Grant Thornton UK LLP

Philip Secrett/Jen Clarke/Jamie Barklem +44 20 7383 5100

Directors’ Report

The Directors present their report for Red Emperor Resources NL (“Red Emperor” or “the Company”) and its subsidiaries (“the Group”) for the half year ended 31 December 2015.

Directors

The persons who were directors of Red Emperor Resources NL during the half year and up to the date of this report are:

• Mr. Greg Bandy (Managing Director)
• Mr. Jason Bontempo (Non-Executive Director)
• Mr. Nathan Rayner (Non-Executive Director)

Review of Operations for the Half Year ended 31 December 2015

Philippines (SC 55)

Red Emperor advised during the period that its Joint Venture partner and Operator, Otto Energy Limited (ASX: OEL) requested that a two-year moratorium be granted by the Philippines Department of Energy over SC 55. The JV fulfilled the work obligation under the current exploration Sub-Phase by drilling the Hawkeye-1 exploratory well in August 2015.  Although the well did not encounter gas in commercial quantities, it proved the presence of an active petroleum system within the Service Contract area, which also hosts several other leads, including the “Cinco Prospect”.  The consortium intends to undertake further technical studies during the moratorium period, including a Quantitative Interpretation (QI) Study. QI is a relatively recent geophysical technique that is designed to gain a better understanding of existing and potential petroleum reservoirs. The Joint Venture expects a response from the Department of Energy with respect to its moratorium request in March 2016.

Subsequent to the end of the period, Red Emperor was advised by Otto Energy of its intention to exit the Joint Venture as part of its strategy to focus on its North American assets. As a result, Red Emperor would have the option to either maintain its 15% participating interest in SC 55 or be assigned a percentage of Otto Energy’s interest on a pro-rata basis. In this instance, Red Emperor’s participating interest could be increased by up to 22.5% to 37.5%. Red Emperor is considering its options and will advise the market accordingly.

Georgia

Red Emperor, a 20% shareholder of Strait Oil and Gas Limited (Strait), a Gibraltarian company with a valid Production Sharing Contract (PSC) across Block VIa in the Republic of Georgia, continues to be advised of ongoing negotiations with a potential purchaser of the PSC. Red Emperor understands that delays in reaching agreement with the potential purchaser have been due to volatility in the oil and gas price and political instability in the region.

Corporate

In July 2015, the Company, through its London broker, Brandon Hill Capital, and its Australian broker, 708 Capital, placed 65,750,000 new ordinary shares at 4 pence (A$0.08) per share to raise £2.63 million (A$5.26 million) before expenses. Proceeds from the fundraise and existing cash resources were used to fund the drilling activities in the Philippines.

The Company also issued 4,320,000 unlisted options, exercisable at $0.08 each on or before 2 July 2018 as part consideration to advisors of the Company for capital raising fees associated with the July 2015 Share Placement.

Events subsequent to Reporting Date

There have been no significant events subsequent to the half-year to the date of this report.

Auditor’s Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, to provide the Directors of the Company with an Independence Declaration in relation to the review of the half-year financial report.  This Independence Declaration is set out on page 3 and forms part of this Directors’ report for the half-year ended 31 December 2015.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to section 306(3) of the Corporations Act 2001.

Greg Bandy

Managing Director

Perth, Western Australia,

14 March 2016

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2015

Consolidated Statement of Financial Position

as at 31 December 2015

Consolidated Statement of Cash Flows

for the half-year ended 31 December 2015

END