October 2009 production update

Rocksource ASA (“Rocksource”) announces that the estimated October 2009 production from its US subsidiaries averaged 897 boepd (barrels of oil equivalent per day). This compares to the actual September 2009 production of 1,101 boepd.

The reason for the lower production in October is due to the export pipeline from the field being shut for maintenance five days from Tuesday 20 October through Saturday 24 October. During this time there was no production from any wells in the field and the loss of production is estimated to equal 180 boepd for the month of October. In spite of this loss of production, the 2009 average production target of 1,300 boepd is not changed.

This was the first maintenance shut-down since Rocksource acquired equity in the fields in 2005, and according to the pipeline owners, the first shut-down since the pipeline was installed in 1955. The pipeline was found to be in good condition and no remedial work is required.

Evaluation of development options for the Granbury discoveries has been concluded.  Under the terms of the leases for the Granbury wells, production must be established by 1 December, 2009, or the leases will expire. The current gas prices are not high or stable enough for Rocksource to earn a reasonable return on the required investments, and Rocksource has therefore concluded not to develop the discovered gas. The cost of the two wells, estimated to around USD 5.9 million, has previously been capitalized and will now be expensed. This will impact the third quarter result, but there will be no cash effect.

An agreement has been entered into to assign the leases and the exploration wells including all obligations to another company in exchange for a carried working interest of 20 per cent. This agreement may give future financial income to Rocksource without any further capital investment in the field.

Note: The stated production numbers are based on metered daily production, and may thus differ slightly from the final production volumes that will be used for accounting purposes, due to changes in stock volumes etc.

Oslo, 4.11.2009
Rocksource ASA

Trygve Pedersen
CEO

+47 90 09 77 41