Reef Announces Proposed Transaction with Levant Exploration and Production Corp.

Calgary, Alberta--(Newsfile Corp. - April 26, 2019) - Reef Resources Ltd. ("Reef") is pleased to announce that it has signed a letter agreement (the "Letter Agreement") with Levant Exploration and Production Corp. ("Levant") and Solo Oil PLC ("Solo"). The Letter Agreement is non-binding and outlines the general terms and conditions pursuant to which Reef and Solo would sell and Levant would acquire (the "Proposed Transaction") Reef's and Solo's respective interests in non-producing oil and gas assets located in Huron County, Ontario (the "Assets"). The Letter Agreement contemplates that Reef, Solo and Levant will enter into a definitive agreement with respect to the Proposed Transaction (the "Formal Agreement").

The Proposed Transaction is an arm's length transaction.

The Letter Agreement provides that pursuant to the Proposed Transaction, Levant will establish a special purpose vehicle (the "SPV") (or otherwise use a pre-existing company), which will purchase Reef's interest in the Assets in exchange for equity shares of the SPV equivalent to 2% of the issued and outstanding shares of the SPV, and a royalty equal to 2% of the production revenues from the Assets. The SPV will assume all responsibility for and will indemnity and hold Reef and Solo and their affiliates harmless against all decommissioning liabilities in respect of the license interests.

The execution by the SPV of a Formal Agreement is subject to a number of conditions including its completion of due diligence and the confirmation of the willingness by applicable regulatory bodies to waive the fines levied against the Assets to date.

The Letter Agreement will terminate upon the execution of the Formal Agreement, by notification by Levant or the SPV that it does not intend to proceed with the Proposed Transaction or by agreement in writing by the parties.

As Reef's interest in the Assets comprises all or substantially all of the assets of Reef, the Proposed Transaction will require approval by not less than 66 2/3% of the votes cast by shareholders at a meeting of shareholders of Reef.

In connection with the Letter Agreement, Reef and Levant have also executed a binding exclusivity agreement (the "Exclusivity Agreement") pursuant to which Reef has agreed not to enter into, directly or indirectly, any negotiations with respect to a commercial arrangement which is similar to or could reasonably expected to conflict with the Proposed Transaction, August 14, 2019.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Larry Olson
Chief Financial Officer and Director
(250) 460-2640

Forward Looking Statements

This press release contains forward-looking statements which reflect management's expectations regarding future growth, results of operations, performance and business prospects of Reef and Levant. These forward-looking statements may relate to, among other things, forecasts or expectations regarding business outlook for Reef and Levant, and may also include other statements that are predictive in nature, or that depend upon or refer to future events or conditions, and can generally be identified by words such as "may", "will", "expects", "anticipates", "intends", "plans", "believes", "estimates", "guidance" or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Reef and Levant. The reader is cautioned not to place undue reliance on any forward-looking information. Although such information is considered reasonable by management at the time of preparation, it may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Reef and Levant 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 required by securities law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/44365

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