Reef Resources Completes Production Testing at Ausable Well

Reef Resources has completed its production testing of its Ausable well #1 using hydraulic venturi downhole pump technology. The computed average daily production rate over the test period was 103 bopd. The Ausable field is located in south western Ontario.

The Company is now in the process of installing the permanent venturi pumping equipment in Ausable well #1. The new pumping equipment will be installed in the recently drilled Ausable well #5 followed by Ausable well #2 and Ausable well #4. Clean up on the Ausable #2 horizontal well is completed and the new pumping equipment will be installed upon completion of production flow testing.

During the test period the venturi was run for a number of periods to test the surface and downhole pumps and to optimise pump rates and fluids. Reef estimates that the stabilized long term production rate for Ausable well #1 using venturi pumping will be between 50 - 70 bopd and is confident that the production rates for the additional production wells (Ausable #2, Ausable #4 and Ausable #5) will also achieve similar production levels upon installation of venturi pumps. Ausable well #1 was previously being pumped using a traditional beam pump and was recently producing between 5 and 10 bopd. These estimates represent production prior to the full execution of the Enhanced Oil Recovery ("EOR") program.

Ausable well #3 is currently operating as an injection well for the Enhanced Oil Recovery program. The EOR program is at a preliminary stage, presently injecting only 100 mcf/d. The full execution of the EOR program involves injecting increasing amounts of natural gas in order to re-pressurize and sweep the reef plus the completion of additional production/injection wells. Under the full EOR program, re-pressurization of the reservoir will have a significant positive impact on overall field production and recovery factors.

The Company also announces that it has received all government approvals for the installation of a connecting pipeline for its Airport South #1 natural gas well located on its nearby Airport South reef. Natural gas from the Airport South #1 well will provide additional natural gas for the Ausable reef EOR injection program and will increase the injection rate to between 200 - 300 mcf/d. Additionally, recent gas analysis of Airport South #1 revealed 30 bbls of gas liquids per mmcf which will enhance the overall production of the Ausable reef.

Arnie Hansen, President, stated, "We are delighted with the production rate we are achieving in Ausable well #1 as it does demonstrate the production potential of the Ausable field with appropriate pump and EOR technology. We anticipate additional production from the EOR program will be equally exciting We are encouraged by the results as it pertains not only to bringing Ausable well #1 on production but also as a successful solution for achieving maximum production from Ausable well # 2, Ausable well # 4 and Ausable well # 5.''