Petro-Reef Resources Ltd.
TSX-V: PER
March 17,
2008
Petro-Reef Resources Ltd. Announces
Oil Drilling Success
CALGARY, ALBERTA
-- Petro-Reef Resources Ltd. ("Petro-Reef") is pleased to provide an
update on drilling and recompletion activities in its core area of Alexander,
Alberta where Petro-Reef holds an
average working interest of 75%.
Petro-Reef
commenced drilling and recompletion operations on oil prospects in Alexander over
the past few months and has achieved considerable success. In total 2 wells
have been drilled and 3 wells have been re-entered. Of these wells, Petro-Reef
has had 3 oil well discoveries, and 2 gas discoveries.
Petro-Reef
has drilled and tested a new oil discovery at Alexander that flow tested over
700 bbls/d of light sweet crude oil with approximately 0.5 mmcf/d of associated
natural gas production. Petro-Reef has completed this well and will be
initiating a 30-day production test at a restricted rate of 200 bbl/d this
week. Petro-Reef has identified two additional oil zones in this well that will
be tested (most likely with a new well) once results of this 30-day test are
complete. Petro-Reef holds a 94% working interest in this well.
Petro-Reef
has also recently tested a new oil zone in a recompleted well at over 90
bbls/d. The oil was found to be slightly sour and as a result plant
modifications are required at the Petro-Reef operated battery in order to
handle the new production. Petro-Reef expects production to commence from this
well during the third quarter of this year. Petro-Reef holds an 88% working
interest in this well.
Petro-Reef
is completing a 30-day production test on another oil well in Alexander, which
has been producing light sweet crude at rates between 40 - 60 bbls/d throughout
the test period. Upon completion of the test Petro-Reef expects to bring this
well onstream at approximately 50 bbls/d.
With the
recent drilling success, Petro-Reef has identified 10-15 follow-up development
oil locations in Alexander, several of which will be drilled / recompleted
later this year. These locations are in addition to the exploration natural gas
locations scheduled to be drilled later this year.
With the
addition of the production from the recent oil discovery in Alexander,
Petro-Reef estimates current production to be 1,500 boe/d, with over 300 bbl/d
of light, sweet crude production (80% natural gas and 20% crude oil,
respectively).
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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