Update on Canadian Oil Produc

RNS Number : 6543R

Solo Oil Plc

26 August 2010

 



SOLO OIL PLC

("Solo" or "The Company")

26 August 2010

UPDATE ON CANADIAN OIL PRODUCTION

Solo Oil plc, the AIM listed International Oil and Gas Exploration and Development Company, today announces the successful completion of the Reef Ausable #2 horizontal well in South Western Ontario. 

Reef has successfully conducted the 60 tonne three stage fracture ("frac") stimulation August, 20 2010.  The frac comprised of three 20 tonne stages using specialized completion tools strategically placed throughout the 475 meter horizontal leg.  The well is currently being flow tested up tubing to recover frac water and nitrogen.  Subject to recovery of frac fluids and nitrogen the stage frac tools will be recovered followed by an extensive flow test to determine gas and oil flow rate.

Reef has also completed vital work on its natural gas processing system at the Grand Bend process facility.  The company installed a Variable Frequency Drive unit to better match gas flow rates, compressor loading and cooling plus better match gas process criteria.  Additionally, minor piping changes have been completed along with cleaning of Joules Thompson heat exchanger unit to help optimize the gas liquids recovery system.  This work was performed to increase efficiencies and meet the dry natural gas test specifications of the pipeline utility operator. A dry gas test will be conducted this week.

As announced on 29 April 2010, the Company agreed commercial terms of a $1,650,000 CAN participating loan agreement to Reef for financing the development of a proven oil and gas production asset in Ontario.  Solo receives 60% of net production revenue post tax until loan repayment and 50% net earnings thereafter from the funded developments. 

Enquiries:

Solo Oil PLC: [phone]

David Lenigas/Kiran Morzaria

Beaumont Cornish - Nominated Adviser [phone]

Roland Cornish

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.

Reef was formed to participate in the exploration, development and production of conventional crude oil and natural gas reserves in Ontario and western Canada. The Company's strategy is to build shareholder value through internally generated exploration and development drilling and through selective acquisitions. Reef received a $1.65 million CDN participating loan commitment from Solo Oil plc, an AIM listed international oil and gas exploration and development company on April 29, 2010.  Reef has received $750,000 of the loan commitment.

The Company's Ontario asset has gas storage rights, gas re-injection permit for gas recycle, NGL recovery, arbitrage and enhanced oil recovery.  A key component of Reef's Ontario 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 Properties, Reef has identified multiple oil and gas acquisition and development opportunities throughout Canada.

REEF RESOURCES ANNOUNCEMENT

REEF RESOURCES LTD. completes ausable #2 well and processing system upgrades.

August 25, 2010 - Calgary, Alberta - Reef Resources Ltd. (REE - TSX.V)  ("Reef" or the "Company") is pleased to announce the successful completion of the Reef Ausable #2 horizontal well in South Western Ontario. 

Reef has successfully conducted the 60 tonne three stage fracture ("frac") stimulation August, 20 2010.  The frac comprised of three 20 tonne stages using specialized completion tools strategically placed throughout the 475 meter horizontal leg.  The well is currently being flow tested up tubing to recover frac water and nitrogen.  Subject to recovery of frac fluids and nitrogen the stage frac tools will be recovered followed by an extensive flow test to determine gas and oil flow rate.

Reef has also completed vital work on its natural gas processing system at the Grand Bend process facility.  The company installed a Variable Frequency Drive unit to better match gas flow rates, compressor loading and cooling plus better match gas process criteria.  Additionally, minor piping changes have been completed along with cleaning of Joules Thompson heat exchanger unit to help optimize the gas liquids recovery system.  This work was performed to increase efficiencies and meet the dry natural gas test specifications of the pipeline utility operator. A dry gas test will be conducted this week.

Reef was formed to participate in the exploration, development and production of conventional crude oil and natural gas reserves in Ontario and western Canada. The Company's strategy is to build shareholder value through internally generated exploration and development drilling and through selective acquisitions. Reef received a $1.65 million CDN participating loan commitment from Solo Oil plc, an AIM listed international oil and gas exploration and development company on April 29, 2010.  Reef has received $750,000 of the loan commitment.

The Company's Ontario asset has gas storage rights, gas re-injection permit for gas recycle, NGL recovery, arbitrage and enhanced oil recovery.  A key component of Reef's Ontario 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 Properties, Reef has identified multiple oil and gas acquisition and development opportunities throughout Canada.

       For more information please contact:

                   Arnie Hansen                                                           Larry Olson

                   President & CEO                                                       Vice President, Finance

                   T: [phone]                                                      T: [phone]

Forward Looking Statements - this news release contains certain forward-looking statements, which include assumptions with respect to raising funds and future capital expenditures. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Estimated reserve valuation is based on proved plus probable reserves, reflecting the net present value (future net revenue) using forecast prices discounted at 10% before tax 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.  It should not be assumed that the estimate of net present value (future net revenue) represents the fair market value of the reserves.  There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material.

This news release contains certain forward-looking statements, which include assumptions with respect to the valuation of Reef's reserves, funds raised from a financing and future capital expenditures. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

In this press release, the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of 6,000 cubic feet (mcf) of natural gas for one barrel (bbl) of oil based on an energy equivalency conversion method. Boe's may be misleading particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.  Not for distribution to US Newswire Services for dissemination in the United States.

 

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