Buffalo Resources Corp.

Buffalo Resources Corp.

July 31, 2008 08:00 ET

Buffalo Resources Completes $30 Million Drilling Joint Venture and Provides Update

CALGARY, ALBERTA--(Marketwire - July 31, 2008) -


Buffalo Resources Corp. ("Buffalo" or the "Company") (TSX VENTURE:BFR) is pleased to provide an update on its activities.

Drilling Joint Venture

Buffalo has entered into a Joint Venture ("JV") with Kadence Limited Partnership ("Kadence") of Vancouver, British Columbia. This JV will allow Buffalo to exploit its large inventory of drilling opportunities more efficiently and to expand the level of activity previously forecast. Buffalo and Kadence will commit up to $30 million for the purposes of completing a drilling program on certain Buffalo properties over the next 12 months. Kadence will farmin and pay 50%, to a maximum of $15 million, of all drilling, completion and equipping costs to earn 50% of Buffalo's working interest in the wells, subject to the payment of a 10% gross overriding royalty to Buffalo. After payout, Buffalo will retain 70% and Kadence 30% of the working interest in all wells. Under the terms of the JV, Buffalo will make an offer to Kadence not later than April 4, 2011, to purchase its interests in the JV properties.

Buffalo is currently finalizing its drilling programs for the remainder of 2008 and plans to drill between 60 and 70 wells. At Frog Lake, the Company will drill between 45 and 50 oil wells. The remaining 15 to 20 wells will be drilled in the Peace River Arch of northwest Alberta, at Whitecourt in west central Alberta, at Viking and Jenner in southeast Alberta and in southeast Saskatchewan.


Buffalo has completed, stimulated and tied-in its deep Mississippian horizontal well at Pincher Creek 13-28-004-29W4. The well initially produced natural gas at a rate of approximately 2 MMcf/d and has stabilized at a rate of 1 MMcf/d. In August, the Company plans to re-stimulate the well to improve productivity. In the Peace River Arch, a well drilled on Company owned land has been completed and tied-in and is currently producing natural gas from the Montney formation at a rate of 3 MMcf/d with 25 bbls per MMcf of associated liquids. The Company is currently evaluating follow up locations. Buffalo recently drilled ten wells at Frog Lake, Alberta resulting in nine oil wells and one abandoned location. It is expected that the oil wells will be on production by early August 2008.

Bill Trickett, the Company's CEO, commented, "Following the equity financing in May 2008, the sale of non-core assets in June 2008 and completion of the drilling JV, Buffalo is well positioned to aggressively pursue its large inventory of drilling opportunities."

Buffalo is a Canadian oil and gas company engaged in the exploration, development and production of oil and gas reserves in the provinces of Alberta and Saskatchewan.

The securities being offered have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Certain information set forth in this press release contains forward looking statements. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, reliance should not be placed on forward-looking statements. Buffalo's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Buffalo will derive therefrom. Buffalo disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

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