Annual Financial Report

RANGE RESOURCES LIMITED AND CONTROLLED ENTITIES ABN 88 002 522 009 FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2009 CORPORATE DIRECTORY Directors Auditors Samuel JONAH BDO Kendalls Audit & Assurance (WA) Pty Ltd (Non-Executive Chairman) 128 Hay Street SUBIACO WA 6008 Peter LANDAU Telephone: (08) 9380 8400 (Executive Director) Facsimile: (08) 9380 8499 Marcus EDWARDS-JONES Share Registry (Australia) (Non-Executive Director) Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building Anthony EASTMAN 45 St Georges Terrace (Non-Executive Director) PERTH WA 6000 Telephone: (08) 9323 2000 Company Secretary Facsimile: (08) 9323 2033 Jane FLEGG Anthony EASTMAN Share Registry (United Kingdom) Computershare Investor Services plc Registered Office The Pavilions Level 3, 1 Havelock Street Bridgewater Road WEST PERTH WA 6005 Bristol BS99 6ZZ Telephone: (08) 9488 5220 United Kingdom Facsimile: (08) 9324 2400 Telephone: +44 (0) 870 703 6300 Facsimile: +44 (0) 870 703 6114 Principal Place of Business Level 3, 1 Havelock Street Home Exchange WEST PERTH WA 6005 Australian Stock Exchange Limited Telephone: (08) 9488 5220 Exchange Plaza Facsimile: (08) 9324 2400 2 The Esplanade Website: www.rangeresources.com.au PERTH WA 6000 ASX Code: RRS Country of Incorporation Australia Overseas Exchange Alternative Investment Markets (AIM) c/- London Stock Exchange LONDON UK AIM Code: RRL On behalf of the Board of Range Resources Limited ("Range"), I am reporting to you on the events of the Company during the 2008/2009 financial year. For those shareholders who actively follow the fortunes of Range, it will come as no surprise when I say that the 12 month period was an eventful one, which delivered both solid foundations for significant future growth and, frustration, with the drilling of the first well in Puntland, Somalia still yet to occur. Puntland Operating in Puntland has had, and will continue to have, its difficulties. Range is committed to its involvement in Puntland and is of the firm belief that when a project of significant substance has the capacity to benefit all involved, be it the Puntland Government, the Puntland people, our joint venture partner Africa Oil, Range and our shareholders; patience and determination will ultimately deliver success. During the year Puntland had a change in Government through peaceful democratic elections and Range has established a good working relationship the Government of His Excellency Dr Abdirahman Mohamed Mohamud. His Excellency's commitment to enhanced security, infrastructure and economic development in Puntland will assist all companies in operating in the region and make Puntland a more attractive investment destination. As at the date of this letter, the Government and Africa Oil are in negotiations regarding the commencement of Africa Oil's planned 4 well drilling programme, following Africa Oil's delineation of targets in both the Nogal and Dharoor valleys. Range is confident that a successful outcome will be reached and that at least 2 wells will be drilled during the 2009/2010 financial year. In addition to the onshore activity of our joint venture partner, Range has progressed significantly in creating the first comprehensive oil and gas exploration database on all of offshore Puntland, collating, reviewing and interpreting over 40 years worth of material including historical well reports and seismic lines. The database was presented to the new government and negotiations are continuing with regards to formalising production sharing agreements to enable the Puntland Government, Range and potential joint venture partners to commence an offshore seismic programme. Georgia and Texas The Board is pleased to report that in addition to the Puntland projects, the Company has also obtained working interests in the Republic of Georgia (50% farm-in into 2 strategic blocks - 7,000km2 area) and Texas, USA (25% interest - 1,280 acres in a prolific oil and gas producing trend - currently drilling with target depth expected first week of October 2009 after release of this letter). Both opportunities were undertaken to strengthen Range's oil and gas portfolio and provide the foundations for significant growth over the coming years. A review of these projects is provided in the Director's Report of this document. Moving Forward Range management was strengthened significantly during the year with the addition of Mark Patterson and Greg Smith. Together with the existing Board (who I thank for all their efforts), Range is still on the cusp of achieving something unique but is under no illusions of the continued difficulties that need to be overcome in order to succeed. The number one priority of the Company is to ensure and assist (in any way it can) with the drilling of the first on shore well in Puntland in over 17 years. Most important of all, I would like to thank all shareholders for their continued support and patience in what I, and the rest of the Board acknowledge, as being an incredibly frustrating journey but one which still offers significant investment upside during the year ahead. Peter Landau Executive Director INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009 Note Consolidated Parent Entity 2009 2008 2009 2008 $ $ $ $ Revenue from continuing 3 155,016 501,452 155,016 501,452 operations Other income 3 27,147 10,743 27,147 10,743 Finance costs 4 (8,441) (8,960) (8,250) (8,770) Depreciation expense 4 (40,964) (48,020) (40,964) (48,020) Directors fees 6 (494,868) (1,031,958) (494,868) (1,031,958) Directors remuneration 6 (324,869) - (324,869) - Directors share based 4&6 (50,000) (4,713,914) (50,000) (4,713,914) payment Corporate management (388,000) (854,359) (388,000) (854,359) services Consultants (1,612,772) (204,545) (1,612,772) (204,545) Foreign exchange loss - (612,759) - (612,759) Marketing and public (124,477) (275,833) (124,477) (275,833) relations Costs associated with (152,422) (40,755) (152,422) (40,755) AIM listing Travel expenditure (293,447) (361,712) (293,447) (361,712) Write down of available (2,552,750) (2,893,450) (1,244,000) (2,893,450) for sale assets Other expenses 4 (1,522,219) (1,001,663) (1,521,729) (1,820,463) (Loss) before income tax (7,383,066) (11,535,733) (6,073,635) (12,354,343) Income tax expense 5 - - - - (Loss) from continuing (7,383,066) (11,535,733) (6,073,635) (12,354,343) operations (Loss) from discontinued 8 (1,140,132) (1,803,740) (1,583,313) (1,803,740) operations (Loss) attributable to (8,523,198) (13,339,473) (7,656,948) (14,158,083) members of the parent entity Overall operations EPS from continuing operations: Basic loss per share 9 3.34 6.40 (cents per share) Diluted loss per share n/a n/a (cents per share) EPS from discontinued operations: Basic loss per share 9 0.52 1.00 (cents per share) Diluted loss per share n/a n/a (cents per share) The Company's potential ordinary shares were not considered dilutive (refer Note 9). Please refer to ASX website (www.asx.com.au - Range ASX code RRS) for full Annual Report including Directors Report and Notes to the Financial Statements. BALANCE SHEETS AS AT 30 JUNE 2009 Note Consolidated Parent Entity 2009 2008 2009 2008 $ $ $ $ ASSETS CURRENT ASSETS Cash and cash 10 416,417 4,137,360 376,189 4,097,097 equivalents Trade and other 11 42,451 1,441,220 42,451 1,441,220 receivables Other current assets 12 52,225 108,932 52,225 108,932 TOTAL CURRENT ASSETS 511,093 5,687,512 470,865 5,647,249 NON-CURRENT ASSETS Trade and other 11 - - 231,478 781,535 receivables Financial assets 13 1,191,689 2,004,561 1,000,439 1,370,811 available for sale Property, plant and 15 49,779 288,119 49,779 288,119 equipment Exploration & 16 79,888,841 77,120,784 79,888,841 77,013,262 Evaluation Expenditure TOTAL NON-CURRENT 81,130,309 79,413,464 81,170,537 79,453,727 ASSETS TOTAL ASSETS 81,641,402 85,100,976 81,641,402 85,100,976 CURRENT LIABILITIES Trade and other 17 770,027 815,190 770,027 815,190 payables TOTAL LIABILITIES 770,027 815,190 770,027 815,190 NET ASSETS 80,871,375 84,285,786 80,871,375 84,285,786 EQUITY Contributed equity 18 104,063,285 101,619,057 104,063,285 101,619,057 Reserves 19 12,279,180 11,014,714 12,279,180 11,880,964 Accumulated losses (35,471,090) (28,347,985) (35,471,090) (29,214,235) TOTAL EQUITY 80,871,375 84,285,786 80,871,375 84,285,786 Please refer to ASX website (www.asx.com.au - Range ASX code RRS) for full Annual Report including Directors Report and Notes to the Financial Statements. STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009 Economic Entity Note Issued Share-based Option Available Accumulated Total Equity Capital Payment Premium for Sale Losses Reserve Reserve Investment Revaluation Reserve $ $ $ $ $ $ Balance at 1 July 70,866,367 931,939 10,043,543 - (24,002,303) 57,839,546 2007 Revaluation in - - - (835,439) - (835,439) investments Transferred to 19(b) - - (8,967,406) - 8,967,406 - accumulated losses Total income and - - (8,967,406) (835,439) 8,967,406 (835,439) expense recognised directly in equity Loss attributable - - - - (13,339,473) (13,339,473) to members of the company Total recognised - - (8,967,406) (835,439) (4,372,067) (14,174,912) income and expense for the year Issue of share 18(a) 31,864,370 - - - - 31,864,370 capital Exercise of options 18(a) 23,283 - - - - 23,283 Share issue costs (1,108,578) - - - - (1,108,578) Reduction in partly 18(b) (26,385) - - - 26,385 - paid shares Cost of share-based 19(b) - - 9,842,077 - - 9,842,077 payment Balance at 30 June 101,619,057 931,939 10,918,214 (835,439) (28,347,985) 84,285,786 2008 Revaluation in - - - 835,439 - 835,439 investments Transferred to 19 - (762,854) (637,239) - 1,400,093 - accumulated losses Total income and - (762,854) (637,239) 835,439 1,400,093 835,439 expense recognised directly in equity Loss attributable - - - - (8,523,198) (8,523,198) to members of the company Total recognised - (762,854) (637,239) 835,439 (7,123,105) (7,687,759) income and expense for the year Issue of share 18(a) 955,000 - - - - 955,000 capital Exercise of options 18(a) 1,585,237 - - - - 1,585,237 Issue costs 19(b) (96,009) - (39,351) - - (135,360) Issue of options 19(b) - - 1,569,787 - - 1,569,787 Cost of share-based 24 - 298,684 - - - 298,684 payment Balance at 30 June 104,063,285 467,769 11,811,411 - (35,471,090) 80,871,375 2009 Please refer to ASX website (www.asx.com.au - Range ASX code RRS) for full Annual Report including Directors Report and Notes to the Financial Statements. STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009 Parent Entity Note Issued Share-based Option Available Accumulated Total Equity Capital Payment Premium for Sale Losses Reserve Reserve Investment Revaluation Reserve $ $ $ $ $ $ Balance at 1 July 70,866,367 931,939 10,043,543 - (24,049,943) 57,791,906 2007 Revaluation in - - - 30,811 - 30,811 investments Transferred to 19(a) - - (8,967,406) - 8,967,406 - accumulated losses Total income and - - (8,967,406) 30,811 8,967,406 30,811 expense recognised directly in equity Loss attributable - - - - (14,158,083) (14,158,083) to members of the company Total recognised - - (8,967,406) 30,811 (5,190,677) (14,127,272) income and expense for the year Issue of share 18(a) 31,864,370 - - - - 31,864,370 capital Exercise of 18(a) 23,283 - - - - 23,283 options Share issue costs (1,108,578) - - - - (1,108,578) Reduction in 18(b) (26,385) - - - 26,385 - partly paid shares Cost of - - 9,842,077 - - 9,842,077 share-based payment Balance at 30 June 101,619,057 931,939 10,918,214 30,811 (29,214,235) 84,285,786 2008 Revaluation in - - - (30,811) - (30,811) investments Transferred to 19 - (762,854) (637,239) - 1,400,093 - accumulated losses Total income and - (762,854) (637,239) (30,811) 1,400,093 (30,811) expense recognised directly in equity Loss attributable - - - - (7,656,948) (7,656,948) to members of the company Total recognised - (762,854) (637,239) (30,811) (6,256,855) (7,687,759) income and expense for the year Issue of share 18(a) 955,000 - - - - 955,000 capital Exercise of 18(a) 1,585,237 - - - - 1,585,237 options Issue costs 19(b) (96,009) - (39,351) - - (135,360) Issue of options 19(b) - - 1,569,787 - - 1,569,787 Cost of 24 - 298,684 - - - 298,684 share-based payment Balance at 30 June 104,063,285 467,769 11,811,411 - (35,471,090) 80,871,375 2009 Please refer to ASX website (www.asx.com.au - Range ASX code RRS) for full Annual Report icluding Directors Report and Notes to the Financial Statements. CASH FLOW STATEMENTS FOR YEAR ENDED 30 JUNE 2009 Note Economic Entity Parent Entity 2009 2008 2009 2008 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers - 12,789 - 12,790 Payments to suppliers and (2,411,819) (3,643,295) (2,411,081) (3,285,736) employees Interest received 56,484 458,117 56,484 458,117 Interest & other finance (2,860) - (2,860) - costs Net cash outflow from 23 (2,358,195) (3,172,389) (2,357,457) (2,814,829) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payment for property, plant (168,420) (240,526) (168,420) (240,526) & equipment Payment for acquisition of - (12,280,487) - (12,280,487) Somalian rights Payment for investments - (1,500,000) - - Payments for exploration (3,974,922) (9,112,426) (3,806,980) (9,366,407) and evaluation Loans - other entities - (1,127,396) - (1,127,396) Loans to controlled - - (168,645) (1,603,378) entities Net cash outflow from (4,143,342) (24,260,835) (4,144,045) (24,618,193) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of 2,915,955 9,110,778 2,915,955 9,110,778 equity Payment of equity issue (135,361) (435,125) (135,361) (435,125) costs Loans to related entities - (1,553) - (1,553) Net cash inflow from 2,780,594 8,674,100 2,780,594 8,674,100 financing activities Net (decrease)/ increase in (3,720,943) (18,759,124) (3,720,908) (18,758,922) cash and cash equivalents Cash and cash equivalents 4,137,360 22,896,484 4,097,097 22,856,019 at beginning of financial year Cash and cash equivalents 10 416,417 4,137,360 376,189 4,097,097 at end of financial year Please refer to ASX website (www.asx.com.au - Range ASX code RRS) for full Annual Report including Directors Report and Notes to the Financial Statements.

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