Bucking Horse Energy Inc.
TSX : BUC

Bucking Horse Energy Inc.

November 01, 2011 20:10 ET

Bucking Horse Energy Inc. Announces 18 Well Drilling Program Underway at Mesa

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 1, 2011) - Bucking Horse Energy Inc. (TSX:BUC), along with all its wholly owned subsidiaries (collectively, the "Company"), is pleased to provide an update of its operations. All dollar amounts below are expressed in US dollars ("$").

Operational Update

To date in 2011, 10 new directional infill wells (2.31 net) have been developed at the Company's Mesa property situated in the Pinedale natural gas field in southwest Wyoming. The ninth and tenth 2011 Mesa wells were successfully developed and turned to sales in mid-October. Initial peak 24 hour gross production rates of the 10 wells averaged 7.5 million cubic feet ("MMcf") of natural gas per day. The Company has invested approximately $11.3 million to fund its share of the 10 new wells.

The Company owns a 23.12% working interest in the Mesa property. The Mesa infill wells target pay objectives within tight sandstones of the prolific Lance Formation and may be developed on 32 wells per quarter section, or one well per approximately 5 acres.

Bucking Horse's current total production net of royalties is approximately 10 million cubic feet equivalent ("MMcfe") per day from a total of 48 gross producing wells (14.91 net).

Operations Outlook

Bucking Horse has elected to participate in 18 additional infill development wells (4.14 net) at Mesa. These wells have been successfully permitted with well conductors established on a simultaneous operations drill pad. Drilling operations have commenced on the initial wells and development will carry over into the New Year through the third quarter of 2012. Initial production sales associated with the program are expected to commence in early 2012. Assuming success with the 18 well program, Bucking Horse expects to target production rates of up to 20 MMcfe per day by the end of the third quarter of 2012. The Company's share of capital expenditures associated with the 18 Mesa infill wells are estimated to be approximately $20 million which the Company expects to fund from its internal cash flow and existing bank facility.

The Company expects to continue to benefit from operator efficiencies associated with simultaneous operations development pads, built for purpose self-moving rigs, and year round development. Individual well costs are forecast at $4.7 million gross with estimated spud to total depth periods of 14 to 15 days per well. The operator has enjoyed a 100% drilling success rate in the area.

Commodity Hedges

The Company has the following hedge swap positions in place to mitigate its commodity price exposure.

Index Appalachia Dominion South
Q4 2011 Volume
$ / MMBTU
0.644 Bcf
$6.11
Calendar 2012 Volume
$ / MMBTU
2.135 Bcf
$6.358
Q1-Q2 2013 Volume
$ / MMBTU
0.859 Bcf
$5.28

Corporate

Mr. Lorne Hanson has resigned as a Director of Bucking Horse effective October 31, 2011. The Board of Directors thanks Mr. Hanson for his contributions during his tenure and wishes him success in his future endeavors. Bucking Horse's Board of Directors comprises four directors; Gordon Nielsen, Michael Schoen, Raymond Deere, and Victor Barcot.

About Bucking Horse Energy Inc.

Bucking Horse Energy is an independent oil and gas exploration and production company focused exclusively on its Warbonnet and Mesa natural gas properties in the prolific Pinedale field, within the Green River Basin of southwestern Wyoming. At year-end 2010, the Company had proved reserves of approximately 261 Bcfe, comprising 95% natural gas and 5% condensate liquids. The common shares of the Company are listed for trading on the Toronto Stock Exchange under the symbol "BUC".

Additional information on Bucking Horse Energy is available on the SEDAR website at www.sedar.com or on the Company's website at: www.BuckingHorseEnergy.com.

On behalf of the Board of Directors:

Gordon Nielsen, President & CEO

Forward-Looking Information:

Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include: the Company expects to benefit from improving operator efficiencies associated with simultaneous operations development pads, built for purpose self-moving rigs, and year round development; individual well costs are forecast at $4.7 million gross with estimated spud to total depth periods of 14 to 15 days per well; an additional 18 well program at Mesa is contemplated during the second half of 2011 through third quarter of 2012; the Mesa infill wells may be developed on 32 wells per quarter section, or one well per approximately 5 acres; the Company's share of capital expenditures associated with the 18 Mesa infill wells is estimated to be approximately $20 million which the Company expects to fund from its internal cash flow and existing bank facility; Bucking Horse expects to target production rates of up to 20 MMcfe per day by the end of the third quarter of 2012. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of regulatory decisions, competitive factors in the industries in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company. Furthermore, actual future production, oil and gas prices, revenues, taxes, development expenditures, operating expenses, quantities of recoverable oil and gas reserves, number of wells drilled and actual drilling results may vary substantially from our estimations herein. Any significant variance in these assumptions could materially affect the estimated quantities and present values of reserves.

The forward-looking statements contained in this news release represent the Company's expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

Reserves Information:

Natural gas equivalent amounts have been calculated using a conversion rate of six thousand cubic feet ("Mcf") of natural gas per barrel ("bbl") of oil or natural gas liquids. A conversion ratio of six Mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent equivalency at the wellhead. Mcfe disclosure may be misleading, particularly if used in isolation. One million cubic feet equivalent is abbreviated "MMcfe". One thousand cubic feet equivalent is abbreviated "Mcfe". One million British thermal units, a unit of energy, is abbreviated "MMBTU".

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