Reef Resources Ltd.
TSX VENTURE : REE

Reef Resources Ltd.

February 17, 2009 19:27 ET

Reef Resources Ltd. Announces Farm-In and Option Agreement and Flow-Through Financing

CALGARY, ALBERTA--(Marketwire - Feb. 17, 2009) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES.

Reef Resources Ltd. ("Reef" or the "Company") (TSX VENTURE:REE) is pleased to announce the following:

Farm-in and Option Agreement: Reef announces that it has entered into a Farm-in and Option Agreement with Woodthorpe Petroleum Ltd ("Farmor") in the Chinchaga Area of North Western Alberta. The agreement provides Reef (Farmee) the right to re-enter and drill two horizontal development wells to the base of the Debolt and recompletion on one standing gas well in the farm-in lands. Reef will pay 100% of the re-entry horizontal drilling cost and recompletion cost to earn an undivided 50% interest in Sections 10, 11 and 14 of Township 098-07W6M of the Farm-in Lands plus an option to earn a 50% undivided interest in the remainder of the Farm-in Lands. This area provides Reef with the ability to expand into other Woodthorpe Lands and into available open Crown Lands.

Flow-through Financing: Reef also intends to complete a non-brokered private placement of up to 25,000,000 units of the Company ("Units") at an issue price of $0.04 per Unit for gross proceeds of up to $1,000,000 (the "Offering"). Each Unit will be comprised of one flow-through common share of the Company ("Flow-Through Common Share") plus one half share purchase warrant ("Warrant"). Each whole share purchase Warrant will entitle the holder thereof to purchase one Common Share at a price of $0.10 per share until the date that is twelve months from date of closing of the Offering. A finder's fee of cash equal to up to 10% of the gross proceeds of the Offering and a number of Warrants equal to up to 10% of the number of Units sold pursuant to the Offering may be paid to certain arm's length parties in connection with the Offering. Closing of the offering is expected to occur on or about March 20, 2009. Multiple earlier closings will be at the Company's discretion.

About Reef Resources Ltd.

Reef was formed to participate in the exploration, development and production of conventional crude oil and natural gas reserves in Ontario, Alberta and Saskatchewan. The Company's strategy is to build shareholder value through internally generated exploration and development drilling as well as through selective acquisitions and mergers.

Forward Looking Statements - This news release contains certain forward-looking statements, which include assumptions with respect to raising funds and future capital expenditures. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

Contact Information

  • Reef Resources Ltd.
    Arnie Hansen
    President & CEO
    (403) 251-9447 Ext 224
    (403) 251-9553 (FAX)
    or
    Reef Resources Ltd.
    Larry Olson
    V.P. Finance
    (250) 490-3378 or Cell: (250) 809-8876