Alexander, Alberta Wells Hydrocarbon Bearing, Says Petro-Reef

Petro-Reef Resources has two work-over operations currently underway in Alexander, Alberta. Petro-Reef commenced operations at 14-01 with a recompletion of a highly prospective oil zone. Petro-Reef successfully tested the well and intends to bring the well on-stream shortly at a rate of 30-50 bbls/d (44% WI) on a 30-day production test. Petro-Reef has applied for down-spacing on section 1, allowing for up to 8 oil wells to be drilled. Upon receipt of approval, Petro-Reef intends to drill 6 follow-up wells on section 1, each targeting the prospective oil zone present in 14-01.

Petro-Reef drilled and tested a well at 15-29 in Alexander targeting deeper crude oil zones. Based on log interpretation, the target oil zones appeared to be hydrocarbon bearing, with over 100 feet of net pay. On initial test, the target formations tested at a volume in excess of 400 bbls/d of medium, sour crude oil. Subsequent tests produced increasing volumes of water. As a result, the lower zones were deemed uneconomic. Petro-Reef has identified an economic up-hole zone in the 15-29 well which it intends to complete upon receipt of partner approval. A pipeline right of way has been acquired and Petro-Reef will be required to construct a short 1/3 mile pipeline to bring the production onstream. Petro-Reef expects to have this natural gas production onstream by the second quarter.