PER Peruvian Metals Corp

Petro-Reef Resources Ltd. ("Petro-Reef") (TSX VENTURE:PER) -  

Further to its press announcement on October 4, 2011 to review strategic
alternatives Petro-Reef has received several expressions of interest and today
announces that it has entered into a letter of intent with a private company, in
connection with a potential transaction that, if completed on its current terms,
would result in a recapitalization of Petro-Reef by way of a private placement
of Petro-Reef Common Shares at an issue price of $0.47 per share for gross
proceeds of approximately $40 million. 


The proceeds of the proposed transaction would be used as to approximately $25
million to complete the purchase of certain heavy oil properties which are
producing approximately 500 bbl/d. The balance would be used for general
corporate purposes. The transaction would also involve the replacement of
substantially all of the directors and officers of Petro-Reef with individuals
to be identified in a following press announcement. 


The proposed transaction is subject to the completion of arrangements with
investors, the completion of arrangements with the new management team, the
negotiation of mutually acceptable definitive agreements the completion of
commercial and legal diligence by all parties, the receipt of required
regulatory and shareholder approvals and other customary conditions. Petro-Reef
has agreed to work to negotiate these arrangements exclusively with the private
company until December 13, 2011. 


There are can be no assurance that the transaction will be completed on the
proposed terms or that it will be completed at all. The parties have agreed to
Petro-Reef requesting that the TSX Venture Exchange place a trading halt on
Petro-Reef's Common Shares until the sooner of the completion of the negotiation
of the definitive agreements, including the terms of the financing, and December
13, 2011. Additional press releases will be issued to provide an update as to
the status of the transaction. 


Petro-Reef is a Calgary based junior oil and natural gas corporation, engaged in
the exploration, development, acquisition and production of natural gas and
medium to light gravity crude oil reserves in Alberta. 


Petro-Reef's common shares trade on the TSX Venture Exchange under the symbol
PER. The Company's primary corporate objective is to achieve non-dilutive growth
and enhance shareholder value through internal prospect development, strategic
production acquisitions and prudent financial management. 


Forward-Looking Statements: All statements, other than statements of historical
fact, set forth in this news release, including without Limitation, assumptions
and statements regarding future plans, operations and objectives of the
Corporation are forward-looking statements that involve substantial known and
unknown risks and uncertainties. Some of these risks and uncertainties are
beyond management's control, including but not limited to, the impact of general
economic conditions, industry conditions, fluctuation of commodity prices,
fluctuation of foreign exchange rates, environmental risks, industry
competition, availability of qualified personnel and management, availability of
materials, equipment and third party services, stock market volatility, timely
and cost effective access to sufficient capital from internal and external
sources. The reader is cautioned that assumptions used in the preparation of
such information, although considered reasonable by the Corporation at the time
of preparation, may prove to be incorrect. There can be no assurance that such
statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.

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