Buffalo Resources Corp.

Buffalo Resources Corp.

November 13, 2008 08:00 ET

Buffalo Resources 2009 Capital Program and Operations Update

CALGARY, ALBERTA--(Marketwire - Nov. 13, 2008) - Buffalo Resources Corp. ("Buffalo")(TSX VENTURE:BFR) is pleased to update its operational activities and to provide guidance for 2008 and 2009.

2009 Capital Program:

The Board of Directors of Buffalo has approved a 2009 capital program of $32 million. Included in the capital spending will be the drilling of 80 (32 net) wells: 62 at Frog Lake, five in the Peace River Arch, nine in west central Alberta, two in southern Alberta and two in southeast Saskatchewan. The program will be funded from cash flow from operations, estimated based upon average commodity prices of $65 US per barrel for West Texas Intermediate crude oil, with an exchange rate of $1 Cdn to $0.80 US, and $7.50 per MMbtu for natural gas.

Operational Update:

2008 Outlook

Buffalo is currently producing 3,350 barrels of oil equivalent per day (boe/d) and expects to exit 2008 at a daily production rate of 3,500 boe/d. The current and year-end production rates exclude approximately 500 boe/d at Pincher Creek where the field is shut-in while Shell Canada's Waterton gas processing facility is being upgraded, and approximately 400 boe/d of production at Killam, Alberta as a result of the sale of that property in June 2008.

Pincher Creek, Alberta:

Shell Canada has advised that, following installation of a new sour gas processing train at the Waterton gas plant in southern Alberta, plant start up is expected to commence in January 2009 and Buffalo anticipates that its Pincher Creek field will be back on production by March 2009. Buffalo anticipates realizing initial net production rates between 4 and 6 MMcf/d (600-900 boe/d) following the six month shut-in of the field.

Frog Lake, Alberta:

Buffalo has received all environmental and regulatory approvals from Indian Oil and Gas Canada and the Frog Lake First Nation for the first 54 wells in its heavy oil drilling program at Frog Lake in eastern Alberta and is currently waiting on Energy Resources Conservation Board final approval of its Primary Recovery Scheme (downspacing) application so that drilling can commence. Delays in this approval have resulted in the majority of Buffalo's planned Q4 2008 drilling program at Frog Lake being deferred until Q1 2009.

West Central Alberta:

During the third and fourth quarter the Company drilled five Mannville gas wells at Whitecourt East. The wells encountered between 9 and 13 metres of net pay and were tested at flow rates of between 1.0 and 2.3 MMcf/d. The first well has been tied-in and is currently producing 2 MMcf/d of natural gas and the remaining four wells are expected to be tied-in and on production by year-end. As reservoir pressures, measured in the new wells, remain at 85% to 95% of original pool pressure, Buffalo expects to drill an additional six wells at Whitecourt in 2009.

Peace River Arch, Northern Alberta:

Prior to year-end, the Company plans to drill a Devonian/Cretaceous test at Expanse as well as a horizontal well at Cecil and a vertical well at Spirit River, both for Triassic oil. At Valhalla, a discovery well was completed in June and is currently producing at a rate of 2.0 MMcf/d with two follow up locations having been identified for drilling in 2009. Following the success of its discovery gas well at Expanse, Buffalo shot 3-D seismic over the southern portion of the Expanse lands in the spring of 2008 and plans to complete a further 3-D program over the northern portion before year-end. Further drilling is planned at Expanse in 2009.

Southeast Saskatchewan:

Given the attractiveness of the Saskatchewan fiscal regime, Buffalo has decided not to dispose of its operations in the Province. Two horizontal wells were recently drilled at Alameda for production from the Midale zone. The first well is currently producing at a rate of 70 barrels of oil per day and the second is being equipped as a pumping oil well. A further two wells are planned in 2009 and Buffalo intends to increase its focus on new opportunities in the area.

Certain information set forth in this press release contains forward-looking statements. More particularly, this press release contains statements concerning Buffalo's projected exit rates of production of oil and natural gas for the 2008 financial year and of anticipated capital expenditures and cash flow from operations for 2009. The forward-looking statements are based on certain key assumptions made by Buffalo, including expectations and assumptions concerning prevailing commodity prices and exchange rates, availability of labour and cost of labour and services, the timing of receipt of regulatory approvals, the performance of existing wells the success in drilling new wells, the performance of new wells and the sufficiency of budgeted capital expenditures in carrying out Buffalo's planned activities.

Although Buffalo believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Buffalo can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These risks are set out in more detail in Buffalo's annual information form for the year ended December 31, 2007, which can be accessed at www.sedar.com.

The forward-looking statements contained in this press release are made as of the date hereof and Buffalo undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Barrels of oil equivalent (Boe's) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf of gas = 1 Bbl of oil is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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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