Petro-Reef Resources Ltd. (TSX VENTURE:PER) ("Petro-Reef") has entered into a
private placement financing agreement with Emerging Equities Inc. ("EEI") to
sell up to $3.0 million in flow through common shares on a commercially
reasonable best efforts basis.


Under the terms of the agreement, Petro-Reef will issue by way of private
placement a maximum of 7,500,000 flow through common shares at a price of $0.40
per share for gross proceeds of $3.0 million. The offering is scheduled to close
on or about August 18, 2011, and is subject to certain conditions including, but
not limited to, the receipt of all necessary approvals, including the approval
of the TSX Venture Exchange.


Proceeds of the offering will be used to finance Petro-Reef's exploration
program, with the gross proceeds from the sale of the flow through shares used
to incur eligible Canadian Exploration Expenses which will be renounced in
favour of the subscribers of the flow through shares effective on or before
December 31, 2011.


The offering will be on a private placement basis to accredited investors and
other eligible purchasers in Alberta, British Columbia and Ontario and the
securities issued will be subject to resale restrictions for four months after
the closing.


EEI will receive a cash commission equal to 6% of the gross proceeds of the
offering, and options to acquire that number of shares equal to 6% of flow
through shares issued. Each option will be exercisable to acquire one common
share at a price of $0.40 until 12 months after closing.


Also, Petro-Reef has arranged for a drawdown on the Development Credit Facility
with its lender in the amount of $3.2 million for the drilling, completion and
tie-in of development wells at Alexander, Alberta. The drawdown has increased
the total funds available to Petro-Reef under its credit facilities from $11.0
million to $14.2 million.
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