Buffalo Resources Corp.
TSX VENTURE : BFR

Buffalo Resources Corp.

May 13, 2009 08:00 ET

Buffalo Resources to Commence Frog Lake Drilling Program

CALGARY, ALBERTA--(Marketwire - May 13, 2009) - Buffalo Resources Corp. ("Buffalo") (TSX VENTURE:BFR) announced today that it plans to commence its Frog Lake heavy oil drilling program in early June 2009. Over the past five months drilling costs have fallen between 15% and 20% while the price of WTI crude has improved steadily and the heavy oil selling price differential has narrowed to less than $6.00 per barrel.

Buffalo is currently realizing a selling price at the wellhead in excess of $52.00 per barrel for its Frog Lake oil, resulting in a netback of approximately $23.00 per barrel. With a historical drilling success rate of 98% and reduced drilling costs, Buffalo expects finding costs of $7.00 or less per barrel of reserves. As such, the program represents a superior capital recycle ratio of in excess of three times.

Buffalo has between 150 and 200 heavy oil development drilling locations at Frog Lake under currently approved ERCB well-spacing. The first 65 wells in the program have been surveyed, received all regulatory approvals and can be drilled immediately.

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

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 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.

The term "netback" is a non-GAAP financial measure that does not have any standardized meaning prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and is therefore unlikely to be comparable to similar measures presented by other issuers. Netback provides useful information as an indicator of profitability and the ability to fund future capital expenditures which drive growth. Netback represents the profit margin from the sale of oil, natural gas and natural gas liquids and is calculated as revenues less royalties and operating expenses.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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