Investment in Canadian Oil De

RNS Number : 9087L

Solo Oil Plc

14 May 2010

 

SOLO OIL PLC

("Solo" or "The Company")

14 May 2010

INVESTMENT IN CANADIAN OIL DEAL

Solo Oil plc, the AIM listed International Oil and Gas Exploration and Development Company, today announces it has paid Reef Resources Ltd ("Reef") the Stage 1 loan payment of C$750,000 as per the agreement announced on the 29^th April 2010, pending the completion of the technical and legal due diligence which is expected to be by the 19^th May.

The Reef team are currently executing on the Stage 1 work program to commence oil and gas production. Solo understands from Reef that the anticipated production re-start date is on or before June 1, 2010.

About Reef:

Reef is an incorporated oil and gas exploration and production company with existing assets in Ontario and ongoing negotiations and options for the acquisition of other assets in Canada. Reef's strategy is to build shareholder value through internally generated exploration and development drilling through selective acquisitions, joint ventures and farm-ins. Reef's primary asset in Ontario has estimated proved and probable reserves of 35,533 boe and 159,370 boe respectively as assessed by a qualified reserves evaluator in July 2009. The Ontario production asset is currently shut-in awaiting development financing.

The Ontario asset also has gas storage rights and a gas re-injection permit for gas re-cycle arbitrage and enhanced oil recovery. A key component of Reef's strategy is to identify and exploit undervalued prospects in the Ontario basin by utilizing the company's 23,500 acres of proprietary 3D seismic. In addition to its Ontario asset, Reef has identified multiple oil and gas acquisition and development opportunities throughout Canada.

Reef has established a four stage production development program on its Ontario asset which includes the drilling of a series of multi-zone well targets (vertical and horizontal) and executing recompletions and tie-ins. The loan from Solo covers the first two stages of expenditure on this program. The successful execution of this program will also enable Reef to capitalize on the gas storage and gas recycling rights on the acreage once depleted.

Enquiries:

Solo Oil PLC: [phone]

David Lenigas/Kiran Morzaria

Beaumont Cornish - Nominated Adviser [phone]

Roland Cornish

Astaire Securities: [phone]

Jerry Keen/Toby Gibbs

NOTES TO EDITORS 

Solo Oil Plc is petroleum resources exploration and development company, with objectives to acquire and develop a diverse portfolio of direct and indirect interests in exploration, development and production oil and gas assets which are based in the Americas, Europe and Africa. More information on Solo can be found at www.solooil.co.uk.

Reserves are estimated with an effective date of July 31, 2009. Additional information on the reserves of Reef may be found in the filings made by Reef on SEDAR pursuant to National Instrument 51-101 of Canada.

GLOSSARY 

boe = barrels of oil equivalent calculated on the basis of six thousand cubic feet of gas equals one barrel of oil

 

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