Petro-Reef
Resources Ltd.
January 25, 2008
TSX: PER
Petro-Reef Resources Ltd. Announces
Operations Update
�
CALGARY,
ALBERTA - Petro-Reef Resources Ltd. ("Petro-Reef")
is providing an update to our news release dated October 18, 2007 for our deep exploration
test at 15-29 in
Alexander,
Alberta
along with additional information on drilling and workover
activities as well as a review of preliminary Q4 - 2007 results.
Petro-Reef
estimates Q4 - 2007 production of 800 boe/d,
representing a 34% increase from Q3 - 2007 and a 126% increase from Q4 - 2006. Production
for all of 2007 is estimated at 620 boe/d,
representing a 37% increase year over year. Current production is
estimated at 900 boe/d,
representing an approximate 13% increase from Q4 - 2007.
Petro-Reef
maintains significant balance sheet liquidity exiting 2007 with zero bank debt
and over $4,500,000 in cash. Petro-Reef intends to
prudently use debt financing in 2008 ensuring adequate funding is available for
key exploration and development drilling opportunities.
Petro-Reef has
two work-over operations currently underway in Alexander. Petro-Reef
commenced operations at 14-01 with a recompletion of
a highly prospective oil zone. Petro-Reef
successfully tested the well and intends to bring the well on-stream shortly at
a rate of 30-50 bbls/d (44% WI) on a 30-day
production test. Petro-Reef has applied for
down-spacing on section 1, allowing for up to 8 oil wells to be drilled. Upon
receipt of approval, Petro-Reef intends to drill 6
follow-up wells on section 1, each targeting the prospective oil zone present
in 14-01.
Petro-Reef
drilled and tested a well at 15-29
in Alexander targeting deeper crude oil zones. Based on
log interpretation, the target oil zones appeared to be hydrocarbon bearing,
with over 100 feet
of net pay. On initial test, the target formations tested at a volume in excess
of 400 bbls/d of medium, sour crude oil. Subsequent
tests produced increasing volumes of water. As a result, the lower zones were
deemed uneconomic. Petro-Reef has identified an
economic up-hole zone in the 15-29 well which it intends to complete upon
receipt of partner approval. A pipeline right of way has been acquired and Petro-Reef will be required to construct a short 1/3 mile
pipeline to bring the production onstream. Petro-Reef expects to have this natural gas production onstream by the second quarter.
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