Balance Sheet: Red Fork has drawn down US$100m of its secured...

Balance Sheet: Red Fork has drawn down US$100m of its secured term loan as at 30 June 2014. With the commencement of the Company’s strategic review process and the subsequent reduction in development expenditure, Red Fork obtained waivers for anticipated breaches of its quarterly covenant reporting obligations. It is the Company’s intention to repay the secured loan following the conclusion of the current strategic review and no further waivers have been sought past 30 September 2014. The secured loan has therefore been re-classified on the balance sheet from non-current to current resulting in a working capital deficit being reported.

Strategic Review Process: In April 2014 Red Fork announced a strategic review of the Company’s asset base to determine how it can best be monetised or proactively developed. The Company engaged US and Australian advisors to assist in the process and has now completed a comprehensive marketing campaign with presentations and discussions with prequalified interested parties. As at the date of the Half Year Report, Red Fork can confirm it has received a number of non-binding indicative proposals. Based upon feedback received from its US advisors, the Company believes that one of these will conclude in a refinancing or asset sale / restructure which will facilitate the repayment of the secured loan principal and fees and the outstanding trade creditors, and provide the Company with sufficient working capital to continue to develop its oil and gas assets. -