Reef Resources Ltd.
TSX VENTURE : REE

Reef Resources Ltd.

June 16, 2010 14:21 ET

Reef Resources Ltd. Announces Operational Update

CALGARY, ALBERTA--(Marketwire - June 16, 2010) -

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

Reef Resources Ltd. (TSX VENTURE:REE) ("Reef" or the "Company") announces an operational update on its Ausable Ontario property. 

  • Production facilities have been restarted, tested and are working as per standard performance levels.
  • The local natural gas utility company is in the process of finalizing analysis of the Company natural gas prior to re-start of the facility. Subject to confirmation of acceptable gas analysis by the utility the Company will restart production as planned. 
  • Reef successfully negotiated purchase of the main compressor from a lease arrangement and this will have a positive impact on the Company's balance sheet, positive net operating income and lower overall operating costs.
  • The completion program and scheduling for the Ausable #2 stage fracture are being finalized. Reef intends to execute as soon as final quotes are received and we have confirmation of service rig and equipment availability.

Reef was formed to participate in the exploration, development and production of conventional crude oil and natural gas reserves in Ontario and western Canada. The Company's strategy is to build shareholder value through internally generated exploration and development drilling and through selective acquisitions. Reef recently announced an agreement for a $1.65 million no interest loan financing facility from Solo Oil Plc, an AIM listed company, to develop its property in Ontario.

The Company's Ontario asset has gas storage rights, gas re-injection permit for gas recycle, NGL recovery, arbitrage and enhanced oil recovery. A key component of Reef's Ontario strategy is to identify and exploit undervalued prospects in the Ontario basin by utilizing the company's 23,500 acres of proprietary 3D seismic. In addition to its Ontario Properties, Reef has identified multiple oil and gas acquisition and development opportunities throughout Canada.

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. Estimated reserve valuation is based on proved plus probable reserves, reflecting the net present value (future net revenue) using forecast prices discounted at 10% before tax with an effective date of July 31, 2009. Additional information on the reserves of Reef may be found in the filings made by Reef on SEDAR pursuant to National Instrument 51-101. It should not be assumed that the estimate of net present value (future net revenue) represents the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material.

This news release contains certain forward-looking statements, which include assumptions with respect to the valuation of Reef's reserves, funds raised from a financing 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.

In this press release, the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of 6,000 cubic feet (mcf) of natural gas for one barrel (bbl) of oil based on an energy equivalency conversion method. Boe's may be misleading particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither 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

  • Reef Resources Ltd.
    Arnie Hansen
    President & CEO
    (403) 251-9447
    or
    Reef Resources Ltd.
    Larry Olson
    Vice President, Finance
    (250) 460-2640