Reece Energy Finds Oil in Saskatchewan Well

Reece Energy's first development well in the Frobisher Hastings zone has been drilled in the Hastings, Saskatchewan area. The re-entry horizontal well encountered over 230 meters of good to excellent porosity, good streaming oil cuts and good gas shows in mud returns. The well was test swabbed at a rate of over 500 bbls per day with an average oil cut of 50%. The light oil is high quality 38degrees API. The well is waiting to be tied in, with 6067 kpa (880 psi) on the casing annulus. A 3D seismic program is being conducted over the lands to assist in positioning of up to eleven more horizontal wells, four of which are scheduled to be drilled this year. Reece has a joint venture with a rotating option to drill an unspecified number of wells on over 1,000 hectares (2,500 acres) of minerals in the Hastings area. Water disposal and treating facilities are in place and operating, which will speed production from the new wells. The joint venture requires Reece to pay 100% to earn 50% working interest in each well drilled.

3D seismic has recently been shot over approximately 280 hectares (700 acres) of the 300 hectare (750 acre) Crystal Hill play. Three re-entry wells were drilled and tested, two of these wells have been completed in the Souris Valley light oil zone and are awaiting tie in and the other, a horizontal well, is awaiting further stimulation and testing. The geophysical information has revealed at least three horizontal and/or vertical infill locations. Reece has a 33% non operated working interest in this play. Further development of this area is expected to take place in upcoming months.