Reef Resources to Boost Production at Ausable Field

Reef Resources announced that significant progress is being made on determining the Ausable #5 future flow rate. The presence of very light oil, blended with natural gas condensates, creates foamy oil conditions and consequently the current mechanical bottom hole pumping configuration is operating at very low efficiency causing erratic flow rate and high fluid levels in the wellbore. The Ausable field has now been shut in for a period of time to provide fluid level and pressure build up data that is necessary to determine the Ausable #5 likely flow rate using industry accepted inflow analysis technique and will be reported as soon as all data is processed.

When the likely ultimate flow rate has been estimated Reef will be able to design and execute a plan for long term lifting of the well fluids using revised pumping techniques that will allow the full potential of the well to be realised.

The removal of the frac tools from Ausable # 2 is also progressing. The first stage of tubing cuts have been successfully executed and will now concentrate on extracting the frac tools over the course of the next few days. Once the frac tools are removed the Company will report on the status of Ausable #2.

Arnie Hansen stated, "While still at a preliminary state, Ausable # 5 is looking very positive and the Company's engineering team is working on a solution to increase pumping efficiencies therefore increasing production. This is the first stage of optimization with next goal to acquire and inject natural gas to re-pressure the reef that will significantly increase production and demonstrate the true value of the Ausable pool."