Petro-Reef Resources Ltd.
TSX VENTURE : PER

Petro-Reef Resources Ltd.

August 19, 2011 16:16 ET

Petro-Reef Resources Ltd. Announces Closing of Flow-Through Share Equity Offering

CALGARY, ALBERTA--(Marketwire - Aug. 19, 2011) -

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 any 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. (TSX VENTURE:PER) ("Petro-Reef") is pleased to announce that it has closed its previously announced private placement financing (the "Offering") for gross proceeds of $2,391,200. Pursuant to the Offering, Petro-Reef issued 5,978,000 Common Shares on a "flow-through basis" pursuant to the Income Tax Act (Canada) (the "Tax Act") at a purchase price of $0.40 per Common Share (the "Flow-Through Shares"). Pro forma the closing of the Offering, Petro-Reef currently has 62,239,477 Common Shares issued and outstanding. All of the securities issued pursuant to the Offering will be subject to a hold period expiring on December 20, 2011.

Emerging Equities Inc. acted as agent for the Offering and received a commission equal to 6% of the gross proceeds from the Offering and 358,680 broker warrants, each broker warrant entitling the holder to purchase one Common Share at $0.40 per share until August 19, 2012.

The proceeds of the Offering will be used to finance Petro-Reef's exploration program, with the gross proceeds from the sale of the Flow-Through Shares to be used to incur eligible "Canadian Exploration Expenses" (as defined in the Tax Act) which will be renounced in favour of the subscribers of the Flow-Through Shares effective on or before December 31, 2011.

Forward-Looking Statements: All statements, other than statements of historical fact, set forth in this news release, including without limitation, assumptions and statements regarding future plans, expenditures, 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.
    Hugh M. Thomson
    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
    info@petro-reef.ca
    www.petro-reef.ca