Reef Resources has agreed to complete and flow test the Ausable #5 well in SW Ontario, Canada.
A decision has been made to mechanically complete the well and to conduct flow tests on the basis of the existing data. Further analysis of electric logs and cores from the wells will continue.
Following production testing; the well will be connected to the existing central production facility and placed on production as an oil and natural gas liquids (NGL) producer. The Company's objective is to have the well on production within the next four to six weeks.
Due to the presence of extensive oil and natural gas liquids pay zones in the Ausable #5 well, the Company will now begin detailed scheduling for the drilling of the Ausable #6, #7, #8 and #9 wells and the expansion of the Ausable production facility. Currently it is hoped to complete this additional work by the end of 2011.
The Company will issue additional status reports during the testing and completion of Ausable #5 and as plans for the full Enhanced Oil Recovery and Natural Gas Liquids Program (EOR) are finalized. The Ausable reef is currently on production and is generating revenue from the initial EOR program which commenced in 4th quarter 2010 through the Ausable #1 and #4 wells.
Company President, Arnie Hansen, commented, "We see this as a turning point in the development of the Ausable Reef as the results of the well fully support our geological model and demonstrate the viability of the EOR scheme. We look forward to a busy period over the remainder of the year as we plan and execute the necessary well program."
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