Half Year Report for the Period Ending 31 Dec 2016

17 February 2017

Red Emperor Resources NL ("Red Emperor")

Half Year Report for the Period Ending 31 December 2016

Please see below extracts from the Company's Half Year Report for the period ended 31 December 2016, being the:

· Directors' Report

· Consolidated Statement of Comprehensive Income

· Consolidated Statement of Financial Position

· Consolidated Statement of Changes in Equity

· Consolidated Statement of Cash Flows

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

The information contained within this announcement is considered to be inside information, for the purposes of Article 7 of EU Regulation 596/2014, prior to its release.

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

Red Emperor Resources:

Greg Bandy +61 8 9212 0102

Grant Thornton UK LLP (Nominated Adviser):

Philip Secrett/ 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 2016.

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 2016

Philippines (SC 55)

After providing the Philippines Department of Energy with all relevant documentation for the transfer of Otto Energy Limited's (ASX: OEL "Otto") equity interest in Block SC 55, Red Emperor have been awaiting formal approval and ratification for its equity interest to increase from 15% to 37.5%. Subsequent to the half year end, the DoE has requested further information from Otto, which the Joint Venture believes it has already provided. Red Emperor continues to await the outcome of this process and acknowledges it has taken far longer than anticipated.

In June last year, the DoE formally granted a two-year moratorium, until 23 December 2017, on required work activity under Service Contract 55. During the moratorium period, the JV will conduct specialised geophysical studies in the area surrounding the Hawkeye Prospect, which encountered gas shows when it was drilled in August 2015. Although the Hawkeye well did not encounter gas in commercial quantities, it proved the presence of an active petroleum system in the contract area that hosts the "Cinco Prospect" as well as several other leads.

Georgia

Red Emperor continues to be advised that sale negotiations continue with at least one interested party for the purchase of Block VIa. Red Emperor is not involved in the negotiations, although remains a 20% shareholder of Strait Oil and Gas Ltd which currently holds the Production Sharing Contract across Block VIa.

Corporate

The Board of Red Emperor have been particularly active during the period and made an offer to acquire a US based exploration company with assets in the United States. Discussions were very well advanced and while they did not result in a transaction, both parties continue to engage with each other. Red Emperor are currently in separate negotiations with a potential strategic partner regarding both financing and asset participation. The focus of these discussions has been on opportunities in the USA.

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 2016.

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,

17 February 2017

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the half-year ended 31 December 2016

Consolidated Statement of Financial Position

as at 31 December 2016

Consolidated Statement of Changes in Equity 

for the half-year ended 31 December 2016

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes in the Half Year Report.

Consolidated Statement of Cash Flows 

for the half-year ended 31 December 2016