Petro-Reef Resources Ltd.

Petro-Reef Resources Ltd.

November 23, 2010 08:00 ET

Petro-Reef Resources Ltd. Announces "Bought Deal" Equity Offering

CALGARY, ALBERTA--(Marketwire - Nov. 23, 2010) - Petro-Reef Resources Ltd. ("Petro-Reef" or the "Company") (TSX VENTURE:PER) is pleased to announce that it has entered into a private placement financing agreement with Emerging Equities Inc. (the "Underwriter") to sell up to $4.0 million in securities, of which $1.5 million will be on a bought-deal basis, and the remainder under a commercially reasonable best efforts basis.

Under the terms of the agreement, Petro-Reef will issue by way of a private placement an aggregate of $4.0 million through the issue of common share units (the "Units"), and a separate issue of flow-through common share units (the "FT Units"). Petro-Reef has granted the Underwriter an over-allotment option (the "Over-Allotment Option") to purchase up to an additional $2.0 million through the issue of Units and FT Units. This Over-Allotment Option will be exercisable in whole or in part up to 30 days (up to December 31, 2010 for FT Units) following the closing of the Offering, for aggregate proceeds of approximately $6.0 million. The Offering is scheduled to close on or about December 15, 2010 (the "Closing") and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

Each Unit consists of one common share (the "Shares") of the Company and one common share purchase warrant (the "Warrant), and each FT Unit consisting of one flow-through common share and ½ common share purchase warrant, with each whole Warrant entitling the holder thereof to acquire one share of the Company at a price of $0.50 per Share until September 30, 2011. 

Proceeds of the Offering will be used to fund Petro-Reef's exploration and development program, potential land acquisitions, and for general corporate purposes, with the gross proceeds from the sale of the FT Units used to fund ongoing exploration activities eligible for Canadian exploration expenses which will be renounced in favour of the subscribers of the FT Units effective on or before December 31, 2010.

The offering will be on a private placement basis to accredited investors and other eligible purchasers in Alberta, British Columbia and Ontario and the securities issued will be subject to resale restrictions for four months after the Closing.

The Agent will receive a cash commission equal to 7.0% of the gross proceeds of the Offering, and options to acquire that number of Shares equal to 7.0% of the number of Units and FT Units issued. Each option will be exercisable to acquire one Share at a price of $0.35 until twelve months after Closing.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Petro-Reef Resources Ltd.
    John Pantazopoulos
    Vice-President Finance and CFO
    (403) 265-6444
    (403) 264-1348 (FAX)
    Petro-Reef Resources Ltd.
    970, 10655 Southport Road S.W.
    Calgary, Alberta T2W 4Y1