Drilling Begins at Reef's Ausable Well

Reef Resources reported spudding of its Ausable #5 well on February 8, 2011 in Canada. Drilling and coring will continue over the next three weeks with completion expected before break up.

The well will be cored and data used to develop the Company's gas storage asset and assist in determining horizontal drilling locations and trajectories for the first phase of the Natural Gas Recycling and Enhanced Oil Recovery ("EOR") program. The Ausable reef is currently on production and is generating revenue from the initial Enhanced Oil Recovery Natural Gas Recycling program which commenced in 4Q 2010.

Once Ausable #5 is completed the drilling rig will recover the stage frac tools that have delayed production from the Ausable # 2 horizontal well.