2013-10-03 18:35:52 -
Calgary, Alberta CANADA, October 03, 2013 /FSC/ - Reef Resources Ltd. (REE - TSX Venture), ("Reef" or the "Company") announces it has received an Offer to purchase from N. A. Energy Resources Corp. ("ERC"), an oil and gas investment fund, a 20% Working Interest in its Ontario assets. ERC will also seek to acquire a 28.56% Working Interest from Solo Oil PLC ("Solo") which Reef has a non-binding option to purchase. The anticipated closing of the transaction is December 31, 2013. After closing, ERC will hold a 48.56% Working Interest in Reef's existing assets in Ontario.
The funds received by Reef for the sale of its 20% Working Interest will enable Reef to fund their remaining 51.4% Working Interest of
the final stages of development in the Ausable reef that is forecast to achieve production of 592 boed of oil and Natural Gas Liquids by mid-2014. Reef retains the right to negotiate the sale of their or Solo's Working Interest with other parties until ERC makes a deposit of $200,000.
Reef also has the following important development and budget announcements.
* The Company has sourced a 5.0 mmcf/day -50 refrigeration gas processing plant and a 4.0 mmcf/day compressor package plus tankage necessary for production of natural gas liquid (NGL's). The Company is in negotiation with a leasing Company prepared to lease the equipment under a 3 to 4 year lease. This arrangement lowers up-front capital costs and allows Reef to accelerate development plans into the second phase and generate significant revenue's immediately after commissioning.
* A complete HYSIM gas process analysis was conducted using current Ausable gas analysis utilizing the equipment describe above and indicated an NGL output of 48 bbl/mmcf or total production of 194 bbl/day of C3+ liquids based on a thoughput of 4.0 mmcf/day.
* Reef has determined that the Ausable reef production and ultimate recoveries can be maximized using radial drilling vs horizontal drilling. This approach will save the Company $2.65MM in up-front capital costs and contribute to accelerating its development plans into the planned second phase.
About N. A. Energy Resources
N.A Energy Resources Corporation (ERC) is an Exploration and Production "E&P" company which manages O&G Funds focused around sustainable distressed oil and gas fields. The Company's proven management expertise and fund management promises to create a paradigm shift in the production of abandoned and distressed properties in North America to utilize returns for the Funds and its shareholders. The company has recently syndicated a $10MM fund with a focus on secondary distressed fields in Eastern Kentucky. A new fund is expected to be launched in September 2013 "Permex Petroleum LP" focused on multiple geographical properties with different asset class characteristics to diversify the fund. More information on ERC can be found at www.energyresourcescorp.ca/
The transaction is subject to TSX approval and Board approval by Reef, ERC and Solo Oil plc.
For more information please contact:
President & CEO
T: (403) 251-9447
C: (250) 460-2640
Suite 1120, 444 -5th Ave. SW
Calgary, AB T2P 2T8
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 release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.
Certain financial and operating information included in this press release are based on audited financial results for the year ended July 31, 2012 and are subject to the same limitations as discussed under "Forward- Looking Statements" set out above.
Information Regarding Disclosure on Oil and Gas Reserves. The reserves data set forth above is based upon an independent reserves assessment and evaluation prepared by AJM Deloitte with an effective date of July 31, 2012 (the "AJM Deloitte Report"). The presentation summarizes the Company's crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Company's reserves using forecast prices and costs based on the AJM Deloitte Report. The AJM Deloitte Report has been prepared in accordance with the standards contained in the COGEH and the reserve definitions contained in NI 51-101. All evaluations and reviews of future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which reserves have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables above represent the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of our crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein. The reserve data provided in this release only represents a summary of the disclosure required under NI 51-101. Additional disclosure will be filed on www.sedar.com on or before November 29, 2012.
This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
Trading in the securities of Reef Resources Ltd. should be considered highly speculative. Neither the 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.
To view the press release as a PDF file, please click on the following link:
Source: Reef Resources Ltd. (TSX-V-REE) www.reefresources.ca
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