Reef Resources Ltd.
TSX VENTURE : REE

Reef Resources Ltd.

August 04, 2011 09:15 ET

Reef Resources Ltd. Announces Update on Ausable #5 Completion and Ausable #2 Frac Tool Removal

CALGARY, ALBERTA--(Marketwire - Aug. 4, 2011) -

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

Reef Resources Ltd. (TSX VENTURE:REE) ("Reef" or the "Company") announces that significant progress is being made on determining the Ausable #5 future flow rate. The presence of very light oil, blended with natural gas condensates, creates foamy oil conditions and consequently the current mechanical bottom hole pumping configuration is operating at very low efficiency causing erratic flow rate and high fluid levels in the wellbore. The Ausable field has now been shut in for a period of time to provide fluid level and pressure build up data that is necessary to determine the Ausable #5 likely flow rate using industry accepted inflow analysis technique and will be reported as soon as all data is processed.

When the likely ultimate flow rate has been estimated Reef will be able to design and execute a plan for long term lifting of the well fluids using revised pumping techniques that will allow the full potential of the well to be realised.

The removal of the frac tools from Ausable # 2 is also progressing. The first stage of tubing cuts have been successfully executed and will now concentrate on extracting the frac tools over the course of the next few days. Once the frac tools are removed the Company will report on the status of Ausable #2.

Arnie Hansen stated, "While still at a preliminary state, Ausable # 5 is looking very positive and the Company's engineering team is working on a solution to increase pumping efficiencies therefore increasing production. This is the first stage of optimization with next goal to acquire and inject natural gas to re-pressure the reef that will significantly increase production and demonstrate the true value of the Ausable pool."

Footnote: The Company's Ontario asset has gas storage rights, gas re-injection permit for gas recycle, NGL recovery, enhanced oil recovery and arbitrage. 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 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.

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
    2020 – 801 6 Ave SW
    Calgary, AB T2P 3W2

    Reef Resources Ltd.
    Larry Olson
    Vice President, Finance
    (250) 490-3378