May 24, 2011 / 2:43 PM / 7 years ago

UPDATE 1-Reef Resources sells 38.1 pct interest in Ontario assets to Solo

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May 24 (Reuters) - Oil and gas company Reef Resources Ltd said London-listed Solo Oil will buy a 38.1 percent working interest in its Ontario properties for C$4 million ($4.1 million), sending Reef’s shares up 26 percent.

Shares of Reef Resources were trading up 2 Canadian cents, at 17.5 Canadian cents on Tuesday on the Toronto Venture Exchange. The stock, which had earlier touched a high of 19.5 Canadian cents, was one of the top percentage gainers on the exchange.

Under the terms of the deal, Solo will convert its existing loan of C$1.65 million and provide further funding of C$2.35 million to buy the working interest.

In 2010, Reef Resources had signed the loan agreement with Solo Oil, making the latter a joint venture partner in its oil and gas assets in Ontario.

The Ontario oil and gas assets include the Ausable, Airport North and Airport South reefs.

Reef has outlined a capital budget of C$5.5 million to complete the Ausable number 5 vertical well among other things. Last month, Reef said indicated hydrocarbons in its well in Ontario were higher than expected and likely to be productive. [ID:nL3E7FD2O3] ($1 = 0.977 Canadian Dollars) (Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila) (; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 580; Reuters Messaging:

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