Petro-Reef Resources Ltd.
TSX-V: PER
November 26, 2008
Strong
Revenue, Cash Flow and Earnings for Petro-Reef Resources Ltd.
Calgary,
Alberta � Petro-Reef Resources Ltd. ("Petro-Reef")
is pleased to announce strong financial and operating results for the three and
nine month periods ended September 30, 2008.
Three
Months Ended September 30��
������
� ������������������������������������� �2008����������
2007������ % Change
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Gross
Revenue�������������������� $
4,501,683��� $ 1,795,476��������� 150.7%
Cash
Flow From Operations�������� $
2,411,634��� $�� 951,444��������� 153.5%
CFPS
($ / Share)����� ������������$����� 0.07���
$����� 0.03��������� 133.3%
Net
Income����������������������� $�� 453,787���
$� (288,379)���������� n/a
Production
(Three Months Ended September 30)
����
�������������������� ������������������ �2008���������� 2007������ % Change
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Crude oil and NGL (bbls/d)��������������� 136������������ 27��������� 403.5%
Natural Gas (Mcf/d)�������������������� 4,407��������� 3,406���������� 29.4%
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Total Production (boe/d)����������������� 871����������� 595���������� 46.4%
Petro-Reef's gross revenue increased 150.7% to $4,501,683 as
a result of higher production and record commodity prices. Petro-Reef's
realized natural gas price for the quarter was $7.77 / mcf with a crude oil and
NGL price of $112.71 / bbl. Cash flow from operations increased 153.5%. to
$2,411,634 generating a cash flow per share of $0.07. Earnings increased to
$453,787 for the period as a result of higher revenues and production.
Production increased 46.4% to 871 boe/d with crude oil and
NGL production increasing 403.5% to 136 bbls/d. Petro-Reef is in the process of
bringing onstream two oil wells and two natural gas wells, which collectively
are expected to add approximately 250-300 boe/d. Three of the wells are
expected to be onstream by the end of November, with the remaining well
expected to be onstream by December.
Operations Update
With the current economic crisis affecting all companies'
access to financing, Petro-Reef has refocused its capital expenditures towards
lower risk, development oil drilling locations. In the fourth quarter of 2008,
Petro-Reef anticipates drilling four wells, each targeting oil and all of which
are on lands which attract freehold royalties. Recognizing the large
development oil potential, Petro-Reef has commenced holding applications which
would permit Petro-Reef to drill up to 72 development oil wells on five sections
of land in the Corporation's core area of Alexander over the next several
years. The application process, along with landowner consultation and approvals
are expected to take 6 months barring any unforeseen challenges. As a result,
Petro-Reef anticipates having approvals in place by during Q3 - 2009.
Petro-Reef's
Board of Directors has approved a 2009 capital expenditures budget of
$12,650,000, based on present calculations of cash availability. On this basis,
Petro-Reef anticipates drilling between 8 and 10 development oil and 1 and 2
exploration wells in 2009, all of which are scheduled to be drilled in the
second half of 2009. In anticipation of the second half drilling program,
Petro-Reef will reduce expenditures during the first half of 2009 to conserve
cash and available bank lines of credit. In the event the current economic crisis worsens, Petro-Reef
has the ability to scale back the development drilling program.
Petro-Reef recently completed a 15 square mile 100% owned
3-D seismic program over newly acquired freehold and Crown lands adjacent to
Petro-Reef's existing core area of Alexander. Data is currently being processed
and Petro-Reef anticipates our initial interpretation to occur in early 2009.
Petro-Reef Resources Ltd. is a Calgary-based junior oil and gas company
focused on petroleum and natural gas lease acquisition and exploration, and
development of crude oil and natural gas properties in Alberta,
Canada.
For further information, please contact:
Joseph
Werner������������������������������������������������������������ John
R. Pantazopoulos
President
and CEO������������������������������ or�������������������� Vice-President Finance and
CFO
(403)
265-6444������������������������������������������������������������ (403)
265-6444
Petro-Reef
Resources Ltd.
970, 10655
Southport Road S.W.
Calgary, Alberta
T2W 4Y1
Fax: (403) 264-1348
Email: info@petro-reef.ca
Website: www.petro-reef.ca
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, availability of funds and cash flow,
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.
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