Calgary-based Reef Resources Ltd. is a junior oil and gas company specializing in a prospective portfolio of light oil, natural gas liquids (NGL), and natural gas reserves in southern Ontario.
Holding a range of southern Ontario assets, Reef Resources is “poised to benefit through long life oil reserves, high value NGLs, gas storage and arbitrage opportunities, additional regional discoveries and in providing shareholder value through a dynamic range of business cycles,” reads the company website.
The Enhanced Oil Recovery Program of Reef Resources “unlocks high yielding oil and natural gas liquid recoveries. As such, Long-term shareholder value will be enhanced through development of a gas storage and gas arbitrage asset, including estimated recoverable reserves of 5.7 million barrels in the Ausable Reef Light oil production since EOR four quarter 2010.”
According to Reef Resources, its Ausable Reef No. 5 well completion has been successful, as initial test results (after acidization) indicate that the well has exceeded expectations.
“Due to the oil foaming, which is caused by a combination of high gas oil ratio and very light gravity oil, flowing volumes were difficult to obtain using conventional swabbing methods,” reads the company website. “[Reef Resources] now plans to tie-in the well to the central Ausable process facility to conduct an online test to better determine oil, gas and gas liquids production rates.”
Arnie Hansen, President and CEO, Reef Resources, said in a statement, “The results of the Ausable No. 5 well further reinforce our long-term objectives to jointly develop the Ontario assets.”
The Ausable reef is a fully developed Guelph pinnacle reef of Silurian age, with a 312-acre footprint. The Ausable reef is cylindrically shaped with a gross pay interval ranging from 45 metres to more than 100 metres thick at a depth 500 metres to 620 meters, according to the company website.
Reads the company website, “When Reef acquired their Ontario properties, they also purchased 23,500 acres of high quality 3D seismic, which was completed in 1998-99. Reef just completed a financing of $1.65 million with AIM listed Solo Oil Plc. The funds will be used to finance development of its properties in Ontario.”
Ontario properties include the Ausable, Airport North and Airport South reefs as well as surface equipment, a 23,000 acre 3D seismic survey and other associated gas storage and reinjection rights.
Accordingly, 2011 capital expenditures include, “drilling and completion of four additional horizontal wells, upgrades to existing surface infrastructure for higher volume deliveries, installation of a minus-40 C refrigeration plant for NGL separation and enhanced sales, the purchase of commodity gas or use of produced gas for increase cyclic gas programming, leading a 2011 target of 800 barrels of oil per day and natural gas liquids.”
Additionally, Reef Resources is currently completing the design of a more efficient pumping configuration to be deployed in all the Ausable wells. The new design is hoped to improve down-hole pumping efficiencies thereby increasing oil and gas liquids production. The objective is to have these production improvements complete by September.
“The Reef Ausable No. 1 discovery well had an initial production rate of 350 mcf/day and 25 bbls of 38 API oil. The nearby analogous Grand Bend Pool reef is similar in geology to the Ausable reef. Since 1956, it has produced over 900,000 barrels of oil and is currently on secondary recovery. Seismic data indicates three more fully developed Guelph pinnacle reefs (Reef Resources owns two) and numerous connecting incipient reefs within the seismic survey area.”
Reef Resources has successfully initiated its enhanced oil recovery and natural gas liquids program on the Ausable pinnacle reef in southwestern Ontario. Initial tests resulted in 40 bbl/d of oil and condensate production with minimal natural gas re-injection of 130mcfd. Log results of its recently drilled Ausable No. 5 revealed net pay of 72 meters (57 in oil and NGL rich Guelph formation) with an average porosity of 9.7 per cent.
Reef has gas storage rights for the Ausable pinnacle reefs in Southwestern Ontario, ideally suited for gas storage, boasts the Reef Resources website. The company estimates that the Ausable reef, once depleted, as three BCF of gas storage capacity. Gas storage values are in the range of between $2 million and $4 million/BCF Further growth will be achieved through the development of additional EOR projects in the region or through strategic merger and acqusition activity and prospect development.