Petro-Reef Resources Ltd.

Petro-Reef Resources Ltd.

December 06, 2010 16:01 ET

Petro-Reef Resources Ltd. Announces Continued Oil Drilling Success

CALGARY, ALBERTA--(Marketwire - Dec. 6, 2010) - Petro-Reef Resources Ltd. (TSX VENTURE:PER) -

Petro-Reef Resources Ltd. ("Petro-Reef") is pleased to announce that it has successfully tested a new follow-up oil development well in its core area of Alexander.

Over a two day period, the new follow-up oil development well tested at initial production rates approximately 400 boe/d, including an estimated 300 bbls/d of crude oil. Based on the strong production performance of the discovery well, which has been onstream for approximately 60 days from the same formation as what was tested in the new follow-up oil development well, Petro-Reef anticipates the new follow-up oil development well will be brought onstream at volumes of approximately 200 bbls/d and 0.3 mmcf/d (79% working interest), with a stabilized production rate of 125-150 bbls/d and 0.2-0.3 mmcf/d. Subject to regulatory approval, Petro-Reef anticipates the new follow-up well will be brought onstream prior to year end as the well is located approximately 500 meters from Petro-Reef's 100% owned and operated sour oil and gas processing facility.

With the production addition from this new well and another existing oil well which is currently awaiting tie-in, Petro-Reef anticipates production to increase to approximately 1,200 – 1,250 boe/d by January 2011, including an estimated 350 bbls/d of crude oil.

Based on drilling success and strong production from the oil zone, Petro-Reef has identified 6-8 follow-up locations targeting the same, highly prolific crude oil development zone, the majority of which Petro-Reef holds a 94% working interest in. Subject to regulatory approval, Petro-Reef anticipates drilling 2-4 additional locations in 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 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.

Reference is made to barrels of oil equivalent (boe). Barrels of oil equivalent may be misleading, particularly if used in isolation. In accordance with National Instrument 51-101, a boe conversion ratio for natural gas of 6 Mcf : 1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news 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