Financial Report for the Year Ended 30 June 2008

ABN 88 002 522 009 16 Southport Street West Leederville, 6007 Western Australia Ph: +61 8 6389 5700 F: +61 8 9381 4944 1 October 2008 admin@rangeresources.com.au 2008 ANNUAL REPORT Please find below a summary of the Annual Report, including financial accounts, for Range Resources Ltd ("Range" or the "Company") for the year ended 30 June 2008. A complete pdf version of this report is available for download from the Company's website at www.rangeresources.com.au. Australia UK Range Resources Ltd. Range Resources Ltd. Robert Hyndes Peter Landau +61.8.9324.8513 +44.207.389.8191 robert@hyndes.com p.landau@rangeresources.com.au RFC Corporate Finance Fox-Davies Capital (Nominated Advisor) (Broker) Stuart Laing Daniel Fox-Davies +61.8.9.480.2500 +44.207.936.5200 RANGE RESOURCES LIMITED AND CONTROLLED ENTITIES ABN 88 002 522 009 FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2008 REVIEW OF OPERATIONS Dharoor and Nogal Exploration Projects, Puntland In July 2008, Africa Oil Corp (Africa Oil) commenced seismic work in the Dharoor Valley of Puntland, Somalia. Africa Oil plans to acquire up to 2,600 kilometres of 2D vibroseis data on the Dharoor Block. To date, approximately 300 kilometres of seismic has been acquired and the daily production rate continues to increase. In the Nogal Basin, Africa Oil has acquired more than 4,000 kilometres of good quality 2D data which was recorded in the late 1980's. Africa Oil entered into a contract for a drilling rig to begin drilling in its Puntland concessions in 2008. The contract covered the drilling of two wells with an option to drill two additional wells. Due to logistical and security difficulties in and around Somalia Africa Oil made the decision to delay the start of its 2008 drilling programme, originally scheduled to start in July 2008. Africa Oil has negotiated an option with the rig contractor to contract and utilize the original rig later in 2008. Current operational plans by Africa Oil envisage that the seismic program in the Dharoor Valley will be completed by the end of 2008, allowing the selection of drilling locations in that area. As a result it is anticipated that the drilling program will be reinstated by the end of 2008 and that drilling will commence end 2008, early 2009. The Dharoor and Nogal sedimentary basins were contiguous with the prolific Marib and Masila basins in Yemen during the Jurassic and Cretaceous periods. Over 9 billion BOE have been discovered in Yemen but exploration has been limited to date in Somalia. Only 3 wells have been drilled in basinal settings in these concessions before operations ceased in the early 1990's. Those wells confirmed thick sedimentary sequences, encountered oil in Cretaceous sandstones and proved the presence of active petroleum systems in both basins. Puntland Government reaffirms Range Resources and Africa Oil Exploration Rights During the year there was much speculation and debate in relation to the proposed introduction of a National Oil Law by the Transitional Federal Government (TFG) of Somalia. Of particular concern was the impact that this National Oil Law would have had on the Range concessions. Range was pleased to advise that in September 2007, the Government of Puntland had reinforced its support for Range and its joint venture partner Africa Oil, and formally stated that it will not accept the proposed National Oil Law. The Puntland Government noted that in their opinion, the proposed law was not only inconsistent with the rights validly granted by the Puntland Government to Range (which were also endorsed by the TFG), but it would also be detrimental to the Somali people as a whole. Given the proximity of the drilling program of Range and Africa Oil the resultant success and generation of oil production royalties ensures that Range, Africa Oil and the Puntland Government remain committed to the exploration and development of Puntland's natural resources. This view was further endorsed in formal statements by Puntland's Minister for Energy and Resources. "The Regional State of Puntland was formed with the full consent of its inhabitants and to safeguard and develop the lives and interests of its people, with no malice or hatred towards our brothers in the other regions of Somalia. On the contrary, instead of opting for separation from the rest of the Somali Republic, as some regions, the leaders of Puntland climbed the proverbial tall and short tree in order to realize the reunification of the Republic, but, with a better system of governance. Puntland believes that the reconciliation and reunification of the Somali people is beneficial to its inhabitants both in regards to security and development. This is why Puntland played a pivotal role in the formation of the TFG and provided sustenance to the TFG when it was isolated in Jowhar and Baidoa. Puntland was able to provide such support at the expense of its developmental goals, recognizing that security is a major requirement to development. Hence, the government of Puntland did not spare the proceeds it received from taxation, from the port services in Bosasso, and the revenues it received from the exploration agreements in order to defend itself and the TFG from the onslaught of fanatic groups based in Mogadishu. Puntland reserves the right to manage its own development without sacrificing the "COMMON GOOD". Puntland reserves the right to manage its natural resources, Ports, airports (except Customs and Immigration), fisheries, commerce etcâ€¦ Puntland is willing to share its revenue in a just and equitable manner with the rest of Somalia." [ March 25, 2008] "The Puntland Government remains fully committed to its existing agreement with Africa Oil and Range Resources, covering concessions in Dharoor and the Nogal Valley of Puntland, the concessions agreements covering those areas remain in effect and are supported by the full force of the laws of Puntland." [August 20, 2008] As clearly defined in the 19 March, 2008 Puntland Government Policy Statement (puntlandgovt.com) "Until such time an all inclusive federal constitution is effected and state governments, convinced with the sharing of power and resources, are instituted, Puntland's support of the TFG should not be interpreted in any manner that Puntland is part of the TFG - Puntland shall remain independent for its laws, policies and interests." [August 20, 2008] Offshore Acreage Range is in advanced stages of negotiations with regards to the completion of a 15,000km 2D line seismic programme to be funded by proposed joint venture partners. Subject to the consummation of these negotiations the expected timing for commencement of the offshore seismic could be as early as December 2008. Recent incidents offshore Puntland have delayed finalisation of these negotiations but the Company remains confident that agreements can be concluded, particularly with the recent offer of assistance from various world organisations regarding naval security. Minerals Exploration Previously a number of exploration targets have been identified in Puntland, however, remote site access and drill availability have been long standing issues which have hindered further work being undertaken. The substantial increase in exploration in recent years has resulted in a shortage of drilling equipment and manpower with current lead times on exploration drills and drill contracts typically around two years. The need to drill in Northern Somalia has further compounded the difficulties of securing drill rigs and contractors. As a result the Company looked to securing its own exploration drill rig and has now been successful in securing a versatile drill rig suitable for rugged and remote conditions. It is expected that prior to the rig being deployed to Puntland the rig is first to be utilised domestically on the tenements held by the Company in the central and southern areas of the Forrestania Greenstone Belt near Southern Cross. These tenements have the potential for gold and nickel mineralisation. A geological review of historic exploration has been undertaken during the year to highlight areas of interest and target development. The Board are currently reviewing available strategic options to realise shareholder value from it significant Western Australia tenement portfolio. Aim Listing A major highlight was the successful admission of the Company's shares onto the AIM market of the London Stock Exchange in August 2007. The AIM listing enhanced the profile of Range, provided international investors easier access to Range's securities and broadening the potential investor base of the Company for capital raisings that may be required to support its oil and gas and mineral exploration and development activities in Puntland. Puntland Activities During the year Range completed a number of initiatives with respect to assisting Puntland: * Continued funding of Government projects, including Bossaso Airport and Bosasso Port. * Journalist and investor analyst trips into Puntland to promote Range and the region. The Puntland Government met the journalists and Company representatives in Garowe and the President undertook several individual question and answer sessions with the journalists. In addition, the Puntland Government announced two major initiatives and formally launched a new website www.puntlandgov.net in order to help better communicate the Government's actions and policies. The Puntland Government also presented to the Company and its guests with the Puntland Five Year Development Plan, a comprehensive document which sets out the Puntland Strategic Vision and the Policy Guidelines. * Identifying potential JV partners for infrastructure and fisheries development. FINANCIAL POSITION The net assets of the economic entity have increased by $26,446,239 from $57,839,547 at 30 June 2007 to $84,285,786 in 2008. The increase in Net Assets during the financial year largely resulted from a significant reduction in liabilities from the payment to Consort of the consideration for the Puntland rights. This obligation was settled in early 2008. The directors believe the group is in a strong and stable financial position to expand and grow its current operations. SIGNIFICANT CHANGES IN STATE OF AFFAIRS * On 04 July 2007 Toufic Rahi resigned as Non-Executive Director of the Company. * On 14 July 2007 payment of US$10m was made to Consort Private Limited representing the cash component for the remaining 49.9% carried interest in the Contract of Work for the exploration and development of Puntland's mineral and hydrocarbon resources. * On 21 August 2007 the Company confirmed that along with Africa Oil Corporation it has valid Production Sharing Agreements with the Government of Puntland, following the Transitional Federal Government of Somalia's proposed introduction of a National Oil Law. * On 10 September 2007, the Company issued 30,000,000 Shares to Consort Private Limited. * On 12 September 2007, the Company issued 8,270,025 Ordinary Fully Paid Shares as an incentive to Chairman Sir Sam Jonah. * On 23 October 2007 the Company was admitted to trading on the AIM market of the London Stock Exchange. * On 19 November 2007 the Company completed an AIM placement of 18,180,000 new ordinary shares an issue price of 22 pence each through London based broker Fox-Davies Capital Limited. * On 22 November 2007 Ms Joanna Kiernan resigned as Company Secretary. Mr Peter Landau, an Executive Director of Range assumed the Company Secretary position. * On 28 November 2007 the Company became a substantial shareholder in Contact Uranium Limited (ASX:CTS) having acquired 8,000,000 Ordinary Shares. * On 18 December 2007 Range Director Marcus Edwards-Jones acquired 100,000 Ordinary Fully Paid Shares in the Company via an on market purchase on AIM. * On 21 December 2007 the Company issued 63,723,930 unlisted options pursuant to an Option Placement Offer and 15,271,144 Options pursuant to an Option Rights Offer. * On 31 December 2007 1,136,000 Shares that were part of the AIM placement were cancelled. AFTER BALANCE DATE EVENTS On 16 July 2008 Mr Peter Landau resigned as Company Secretary. Ms Susan Hunter was appointed as the Company Secretary. On 22 July 2007 Mr Liban Bogor resigned as a Director of the Company. Range Executive Director Mr Michael Povey moved into a Non Executive position FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES To further improve the economic entity's profit and maximise shareholders wealth, the Company is committed to further developing the exploration potential of its Puntland Project and invite interested parties into joint venture arrangements. LIKELY DEVELOPMENTS Other than information disclosed elsewhere in this annual report, information on likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this directors' report because the directors believe, on reasonable grounds, that to include such information would be likely to result in unreasonable prejudice to the Group. ENVIRONMENTAL ISSUES The economic entity's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory. INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008 Note Economic Entity Parent Entity 2008 2007 2008 2007 $ $ $ $ Revenue from continuing 2 501,452 217,757 501,452 217,757 operations Other income 2 10,743 5,175,131 10,743 5,175,131 Finance costs (8,960) (1,003,604) (8,770) (1,003,604) Depreciation expense (58,174) (37,366) (58,174) (37,366) Directors fees 5 (1,031,958) (696,128) (1,031,958) (696,128) Directors remuneration 5 - (1,319,250) - (1,319,250) Directors share based 5 (4,713,914) - (4,713,914) - payment Corporate management (854,359) (573,217) (854,359) (573,217) services Consultants (204,545) (654,542) (204,545) (654,451) Loss on sale of (1,426,448) - (1,427,411) - Peruvian project Foreign exchange (612,759) - (612,759) - differences Marketing & public (275,833) (266,841) (275,833) (266,841) relations Costs associated with (40,755) (62,814) (40,755) (62,814) AIM listing Garowe airport project - (591,411) - (591,411) Travel Expenditure (361,712) (879,208) (361,712) (879,208) Write down of available (2,893,450) - (2,893,450) - for sale assets Other expenses 3 (1,368,801) (1,106,068) (2,186,638) (1,110,328) Loss before income tax (13,339,473) (1,797,561) (14,158,083) (1,801,730) Income tax expense 4 - - - - Loss from continuing (13,339,473) (1,797,561) (14,158,083) (1,801,730) operations Loss attributable to (13,339,473) (1,797,561) (14,158,083) (1,801,730) members of the parent entity Earnings per share for profit attributable to the ordinary equity holders of the company: Basic loss per share 7 7.4c 0.15c (cents per share) Diluted loss per share 7 NA NA (cents per share) The Company's potential ordinary shares were not considered dilutive as the company is in a loss position. This EPS is for continuing operations as the discontinued operations have a negligible impact on the Income Statement (Note 12). The accompanying notes form part of these financial statements. BALANCE SHEET AS AT 30 JUNE 2008 Note Economic Entity Parent Entity 2008 2007 2008 2007 $ $ $ $ ASSETS CURRENT ASSETS Cash and cash 8 4,137,360 22,896,484 4,097,097 22,856,019 equivalents Trade and other 9 1,441,220 606,551 1,441,220 606,551 receivables Other current assets 10 108,932 61,191 108,932 61,191 TOTAL CURRENT ASSETS 5,687,512 23,564,226 5,647,249 23,523,761 NON-CURRENT ASSETS Trade and other 9 - - 781,535 353,364 receivables Financial assets 11 2,004,561 3,363,450 1,370,811 8,310,862 available for sale Property, plant and 13 288,119 105,767 288,119 105,767 equipment Exploration & 14 77,120,784 84,026,027 77,013,262 78,718,075 Evaluation Expenditure TOTAL NON-CURRENT 79,413,464 87,495,244 79,453,727 87,488,068 ASSETS TOTAL ASSETS 85,100,976 111,059,470 85,100,976 111,011,829 CURRENT LIABILITIES Trade and other 15 815,190 53,219,923 815,190 53,219,923 payables TOTAL LIABILITIES 815,190 53,219,923 815,190 53,219,923 NET ASSETS 84,285,786 57,839,547 84,285,786 57,791,906 EQUITY Issued capital 16 101,619,057 70,866,367 101,619,057 70,866,367 Reserves 17 11,014,714 10,975,482 11,880,964 10,975,482 Accumulated losses (28,347,985) (24,002,302) (29,214,235) (24,049,943) TOTAL EQUITY 84,285,786 57,839,547 84,285,786 57,791,906 The accompanying notes form part of these financial statements. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008 Economic Entity Issued Share Based Available Accumulated Total Capital Payment for Sale Losses 2007-2008 Reserve Investment Equity $ Revaluation $ $ Reserve $ $ Opening balance as at 70,866,367 10,975,482 - (24,002,303) 57,839,546 1 July 2007 Loss for the year - - - (13,339,473) (13,339,473) Total recognised - - - (13,339,473) (13,339,473) income and expenditure for the year: Issue of share 31,864,370 - - - 31,864,370 capital Exercise of options 23,283 - - - 23,283 Share issue costs (1,108,578) - - - (1,108,578) Reduction in partly (26,385) - - 26,385 - paid shares Cost of share based - 9,842,077 - - 9,842,077 payment Transferred to - (8,967,406) - 8,967,406 - accumulated losses Revaluation in - - (835,439) - (835,439) investment Closing balance as 101,619,057 11,850,153 (835,439) (28,347,985) 84,285,786 at 30 June 2008 Economic Entity Issued Share Available Accumulated Total Capital Based for Sale Losses 2006-2007 Payment Investment Equity $ Reserve Revaluation $ Reserve $ $ $ Opening balance as at 34,891,091 8,499,345 - (22,204,742) 21,185,694 1 July 2006 Loss for the year - - - (1,797,561) (1,797,561) Total recognised - - - (1,797,561) (1,797,561) income and expenditure for the year: Issue of share capital 40,265,872 - - - 40,265,872 Share issue costs (6,049,596) - - - (6,049,596) Partly paid shares 1,759,000 1,759,000 issued during the year Cost of share based - 2,476,137 - - 2,476,137 payment Closing balance as 70,866,367 10,975,482 - (24,002,303) 57,839,546 at 30 June 2007 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2008 Parent Entity Issued Share Based Available Accumulated Total Capital Payment for Sale Losses 2007-2008 Reserve Investment Equity $ Revaluation $ $ Reserve $ $ Opening balance as at 70,866,367 10,975,482 - (24,049,943) 57,791,906 1 July 2007 Loss for the year - - - (14,158,083) (14,158,083) Total recognised - - - (14,158,083) (14,158,083) income and expenditure for the year: Issue of share 31,864,370 - - - 31,864,370 capital Exercise of options 23,283 - - - 23,283 Share issue costs (1,108,578) - - - (1,108,578) Reduction in partly (26,385) - - 26,385 - paid shares Cost of share based - 9,842,077 - - 9,842,077 payment Transferred to - (8,967,406) - 8,967,406 - accumulated losses Revaluation in - - 30,811 - 30,811 investment Closing balance as 101,619,057 11,850,153 30,811 (29,214,235) 84,285,786 at 30 June 2008 Parent Entity Issued Share Available Accumulated Total Capital Based for Sale Losses 2006-2007 Payment Investment Equity $ Reserve Revaluation $ Reserve $ $ $ Opening balance as at 34,891,091 8,499,345 - (22,248,213) 21,142,223 1 July 2006 Loss for the year - - - (1,801,730) (1,801,730) Total recognised - - - (1,801,730) (1,801,730) income and expenditure for the year: Issue of share capital 40,265,872 - - - 40,265,872 Share issue costs (6,049,596) - - - (6,049,596) Partly paid shares 1,759,000 - - - 1,759,000 issued during the year Cost of share based - 2,476,137 - - 2,476,137 payment Closing balance as 70,866,367 10,975,482 - (24,049,943) 57,791,906 at 30 June 2007 The accompanying notes form part of these financial statements. CASH FLOW STATEMENT FOR YEAR ENDED 30 JUNE 2008 Note Economic Entity Parent Entity 2008 2007 2008 2007 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 12,789 - 12,790 - Payments to suppliers and (3,643,295) (4,388,467) (3,285,736) (4,361,374) employees Interest received 458,117 215,568 458,117 215,568 Net cash outflow from 21(a) (3,172,389) (4,172,899) (2,814,829) (4,145,806) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds - Somalia farm-in - 4,975,131 - 4,975,131 signature bonus Payment for property, plant (240,526) (69,469) (240,526) (69,469) & equipment Payment for acquisition of (12,280,487) - (12,280,486) - Somalian rights Payment for investments (1,500,000) (6,027,227) - (6,027,227) Payments for exploration (9,112,426) (4,214,900) (9,366,407) (4,203,968) and evaluation Loan - other entity (1,127,396) - (1,127,396) - Loans to controlled entity - - (1,603,378) (41,385) Purchase of investments - (500,000) - (500,000) Deposit received for sale 12(d) - 200,000 - 200,000 of subsidiary Net cash outflow from (24,260,835) (5,636,465) (24,618,193) (5,666,918) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of 9,110,778 31,530,996 9,110,778 31,530,996 shares Payment of share issue (435,125) (35,986) (435,125) (35,986) costs Loans to related entity (1,553) - (1,553) Proceeds from borrowings - - - - Repayment of borrowings - - - - Net cash inflow from 8,674,100 31,495,010 8,674,100 31,495,010 financing activities Net (decrease)/ increase in (18,759,124) 21,685,646 (18,758,922) 21,682,286 cash and cash equivalents Cash and cash equivalents 22,896,484 1,210,838 22,856,019 1,173,733 at beginning of financial year Cash and cash equivalents 8 4,137,359 22,896,484 4,097,097 22,856,019 at end of financial year The accompanying notes form part of these financial statements.

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