Petro-Reef Resources Ltd.

Petro-Reef Resources Ltd.

October 20, 2010 16:14 ET

Petro-Reef Resources Ltd. Announces New Oil Discovery and New Oil Resource Core Area

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

Petro-Reef is pleased to announce that it has successfully tested a follow-up well to its recent oil discovery well in Alexander. In addition to the discovery zone, the well encountered a new oil zone immediately below the discovery well oil zone. This new oil zone swabbed at rates of 60-80 bbls/d of crude oil with a nominal amount of natural gas. In addition to new oil zone test, Petro-Reef tested the upper discovery zone in the follow-up well at rates of approximately 2.4 mmcf/d (400 boe/d) providing evidence of substantial oil and gas reserves associated with the discovery well. 

In addition to the new oil zone, Petro-Reef's follow-up well encountered additional uphole natural gas and crude oil zones that are not being produced on the section. Petro-Reef anticipates drilling twin wells to capture the production from these uphole zones in 2011 with the natural gas zones being targeted when natural gas prices recover.

Petro-Reef intends to bring the new oil zone onstream by the end of November, with two follow-up locations scheduled to be drilled by year end targeting the same two high impact oil zones. 

Continuing with its strategy of focusing on high impact oil prospects, Petro-Reef is pleased to announce it has recently acquired over 10,000 acres of highly prospective undeveloped land adjacent and on-trend with recent oil resource horizontal drilling activity in the Montney and Nordegg formations. Petro-Reef has identified a minimum of three locations on the acquired acreage, two of which it anticipates drilling in early 2011. Petro-Reef intends to continue to acquire additional acreage in this new oil resource corridor as it develops an additional oil resource core area outside of Alexander.

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