Reef Announces Execution of Trust Agreement with Levant Exploration and Production Corp.

Calgary, Alberta--(Newsfile Corp. - March 1, 2022) - Reef Resources Ltd. ("Reef") announces that it has entered into a trust agreement (the "Trust Agreement") with Levant Exploration and Production Corp. ("Levant") whereby Reef will hold in trust for the benefit of Levant the well licences in respect of Reef's non-producing oil and gas assets located in Huron County, Ontario (the "Assets"), which Assets Reef intends to sell to Levant pursuant to the Asset Purchase Agreement (the "Asset Purchase Agreement") between Reef and Levant previously announced by Reef on November 22, 2021.

Completion of the Asset Purchase Agreement is subject to the conditions that the representations of the parties made in the Agreement being true and correct at closing, satisfactory due diligence on the part of Levant as to the Assets and the other assets of Reef, confirmation by Levant of the validity of surface leases to the subject lands, and confirmation that the Government of Ontario has waived the fines outstanding against Reef, failing which Levant will assume up to $85,000 of such fines. Additionally, as the Assets comprise all or substantially all of the assets of Reef, the sale of the Assets requires approval by not less than 66⅔% of the votes cast by shareholders at a meeting of shareholders of Reef.

Pursuant to the Trust Agreement, Reef will hold the well licences in respect of the Assets as Trustee for Levant as beneficiary. This will allow Levant to perform any operations necessary to maintain the integrity and safety of the wells at its own cost until such time as the well licences can be transferred from Reef to Levant pursuant to the Asset Purchase Agreement.

Levant holds the Petroleum and Natural Gas and Surface rights for the lands on which the Assets are located, which it acquired from the landowners in 2021 after Reef failed to pay the amounts due under the various lease agreements. Reef continues to be the licensee and owner of the wells and pipelines and the owner of the surface facilities. Following closing of the Asset Purchase Agreement announced on November 22, 2021, Levant will become the owner of the wells and facilities and will assume all associated abandonment liabilities and, if they are not waived, up to $85,000 of fines levied against Reef.

Arnold W Hansen
President, Chief Executive Officer and Director
(403) 251-9447

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