Reef Spies Hydrocarbon Pay at Canada Well

Reef Resources Ltd. reported that petrophysical analysis has been finalized on the North Airport #1 well which reached total depth of 1,998 feet (609 meters) on March 29, 2012. Advanced petrophysical evaluation performed by Houston-based Nutech Energy Alliance indicates the presence of 207 feet (63 meters) of net hydrocarbon pay. This is the first well to be drilled on the North Airport reef identified by Company seismic.

The advanced analysis was also conducted on the existing Airport South #1 well and revealed a total of 187 feet (57 meters) of net pay. Completion programs for both the North Airport and Airport South wells are in their final stages with field completion work scheduled for sometime in May. Production from the two Airport locations will be tied into the Ausable reef facility in order to supply natural gas for the Enhanced Oil Recovery (EOR) and natural gas liquids (NGL) project. The EOR program involves using dry natural gas to re-pressurize and energize the reservoir.

The Union Gas meter was commissioned on April 6 and natural gas is now being injected into the Ausable reef. To date approximately 3 MMcf of gas has free flowed into the Ausable pool from the Union Gas line. The injection of gas into the Ausable reef is a key milestone in the execution of the Company's EOR program. As of yesterday the injection rate has been increased to 1 MMcf/d and will be maintained until natural gas from the Airport wells is available. The ultimate objective is to inject up to 500 MMcf to return the reservoir to virgin pressure thereby maximizing oil and gas-condensate production and recovery factor. Enhanced oil production rates will be experienced almost immediately and these will continue to build over time.

Dry weather conditions have now allowed acceleration of the pipelining and production optimization programs. The South Airport pipeline to the Ausable facility is now nearing completion. The pipeline should be substantially complete by end of April. The venturi pump installation and pipeline connection to the shut-in Ausable #2 horizontal well is in its final stages of completion with commissioning also anticipated by end of April.