Petro-Reef
Resources Ltd.
TSX-V: PER
April 24, 2008
Petro-Reef Resources Ltd. Announces
Increased Reserves, Cash Flow in 2007
CALGARY,
ALBERTA
-- Petro-Reef Resources Ltd. ("Petro-Reef") has filed its reports relating to the
reserves data and other oil and gas information required pursuant to National
Instrument 51-101 of the Canadian Securities Administrators and is available on
SEDAR at www.sedar.com.
Petro-Reef has also filed its management's discussion
and analysis and audited financial statements for 2007 both of which are
available on SEDAR at www.sedar.com and on Petro-Reef's
website at www.petro-reef.ca.
Financials
Below is a summary of
Petro-Reef's 2007 audited financial statements.
Financial 2007 2006 % Change
----------------------------------------------------------------------------
Gross Revenue $ 9,289,499 $ 7,156,594 29.8%
Cash Flow From
Operations $ 4,403,135 $ 3,557,432 23.8%
Net Income $ (357,550)
$ 65,060 n/a
Capital Expenditures $10,704,869 $ 7,888,288 35.7%
Total Assets $28,603,828 $15,056,446 90.0%
Cash and Cash
Equivalents $ 4,921,309 $
(1,613) n/a
Production 2007 2006 % Change
----------------------------------------------------------------------------
Crude oil and NGL
(bbls/d) 29 26 11.5%
Natural Gas (Mcf/d) 3,591 2,568 39.8%
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Total Production
(BOED) 627 454 38.2%
Revenue increased almost 30% as a result of increased
production, even though weak natural gas prices in 2007 reduced Petro-Reef's
realized natural price by over 8%. Cash flow from operations increased 23.8% to
$4,403,135, while production increased 38.2% to 627 BOED. Production in Q4 -
2007 was the highest in Petro-Reef's history at 771 BOED with an exit
production rate of approximately 900 BOED. Petro-Reef exited 2007 with a strong
cash position with $4,921,309, while only having a small working capital
deficit of $120,000.
To view this release in its entirety, please visit www.petro-reef.ca.
2008
Forecast
Petro-Reef reiterates its forecast annual production
rate of 1,600 BOED in 2008, generating a cash flow from operations of
$10,000,000 or approximately $0.30 / share utilizing a $6.00 / mcf natural gas
price forecast. It is expected that a $1.00 increase in natural gas prices
during the year will increase cash flow from operations by approximately
$2,000,000.
Petro-Reef has 11 wells scheduled to be drilled /
recompleted / re-worked for the balance of 2008, including two high-impact
locations which are scheduled to be drilled in early Q3 - 2008 each of which,
upon success, will significantly increase both production and reserves. Petro-Reef
intends to fully fund the remaining capital expenditures in 2008 through cash
flow. As a result, debt levels are expected to remain at below 1.0x for the
balance of 2008.
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.
Joseph Werner
President and CEO
(403) 265-6444
Fax: (403) 264-1348
or
Petro-Reef
Resources Ltd.
John Pantazopoulos
Vice-President Finance and CFO
(403) 265-6444
Fax: (403) 264-1348
or
Petro-Reef Resources Ltd.
970, 10655
Southport Road S.W.
Calgary,
Alberta T2W 4Y1
Email: info@petro-reef.ca
Website: www.petro-reef.ca
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