Petro-Reef Resources Ltd.
TSX VENTURE : PER

Petro-Reef Resources Ltd.

December 20, 2010 09:05 ET

Petro-Reef Resources Ltd. Announces Closing of Bought Deal Financing and Exercise of Over-Allotment

CALGARY, ALBERTA--(Marketwire - Dec. 20, 2010) - Petro-Reef Resources Ltd. (TSX VENTURE:PER),

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

This News Release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referenced in this news release have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.

Petro-Reef Resources Ltd. ("Petro-Reef") is pleased to announce that it has completed its previously announced private placement financing (the "Offering") for proceeds of $4,000,000. In addition, Emerging Equities Inc. (the "Underwriter") has exercised its over-allotment option for additional proceeds of $2,000,250, resulting in total gross proceeds raised of $6,000,250 through a combination of flow-through and common share units. Pursuant to the Offering, Petro-Reef issued 4,779,400 flow-through units at a price of $0.40 per flow-through unit and 11,681,400 common share units at a price of $0.35 per common share unit. Each common share unit was comprised of one common share and one transferable share purchase warrant (a "Warrant"), entitling the holder to purchase an additional common share for $0.50 per share at any time until September 30, 2011. Each flow-through unit was comprised of one common share issued on a "flow-through" basis and one-half of a Warrant. 

Pro forma the closing of the Offering, Petro-Reef currently has 55,658,157 common shares and 14,071,100 Warrants outstanding. All of the securities issued pursuant to the Offering will be subject to a hold period expiring on April 18, 2011. Pursuant to the Offering, Petro-Reef paid to the Underwriter a commission equal to 7% of the gross proceeds from the Offering and issued an aggregate of 1,152,256 broker warrants, each broker warrant entitling the Underwriter to purchase one common share at $0.35 per share until December 17, 2011.

Petro-Reef is in the process of licensing four high impact exploration drilling locations, two of which are located in Petro-Reef's north Alexander lands, with the remaining two locations in Petro-Reef's new resource play core area of Goose River. All locations have multi-zone potential with the primary target zones being crude oil. Petro-Reef has a 100% working interest in all exploration locations. In addition to the four high impact exploration drilling locations, Petro-Reef intends to license three to five oil development drilling opportunities in its core area of Alexander to boost production and cash flow.

Forward-Looking Statements: All statements, other than statements of historical fact, set forth in this news release, including without limitation, assumptions and statements regarding reservoirs, resources and reserves, future production rates, exploration and development results, financial results, and future plans, operations and objectives of the Corporation are forward-looking statements that involve substantial known and unknown risks and uncertainties. Some of these risks and uncertainties are beyond management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks, industry competition, availability of qualified personnel and management, availability of materials, equipment and third party services, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Corporation at the time of preparation, may prove to be incorrect. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

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

Contact Information

  • Petro-Reef Resources Ltd.
    Ted Donhuysen
    President and CEO
    403) 265-6444
    (403) 264-1348 (FAX)
    or
    Petro-Reef Resources Ltd.
    970, 10655 Southport Road S.W.
    Calgary, Alberta T2W 4Y1
    info@petro-reef.ca
    www.petro-reef.ca