Longbow Resources Inc.
TSX VENTURE : LBR

Longbow Resources Inc.

August 22, 2007 17:36 ET

Longbow Adds Value With Purchase of Oil Properties

CALGARY, ALBERTA--(Marketwire - Aug. 22, 2007) - Longbow Resources Inc. (TSX VENTURE:LBR) ("Longbow" or the "Company") is pleased to report that its previously announced acquisition of oil producing properties in the Byemoor area of Alberta has been completed subject to filing of final documentation with the TSX Venture Exchange. The Company paid the purchase price of $8.2 million with a combination of bank financing and cash on hand.

As part of the Company's due diligence process prior to the acquisition, management contracted Sproule and Associates Limited to prepare an NI-51-101 compliant engineering report/valuation for the property. According to the Sproule Report effective June 30, 2007, the proved plus probable value of the properties, at a 10% discount rate was $10.69 million. This alone represents a $2.4 million addition to the Company's reserve value prior to any development of the property. Currently Company has approximately 24,192,000 common shares issued and outstanding.

The properties that have been acquired by the Company include an operated working interest of 100% in 14 producing oil wells and seven sections of land. The properties can be described as mature producing properties with sound historical production, long reserve life and good future exploitation potential. The properties are currently producing approximately 180 boe/d. To date the two glauconitic oil pools (33 degree API light oil) which make up the property have only recovered 2.7% of the 40 MMSTB combined initial oil in place according to EUB pool data as of the effective date. Management believes that there is significant additional upside to this property as evidenced by the fact that the Sproule Report indicates the ultimate 2P recovery factor from just the existing 14 oil wells will be 4.2%. When one considers that EUB oil pool data for adjacent glauconitic oil pools shows primary ultimate recovery factors in the 10% range, with additional horizontal development drilling, the opportunity becomes all that much more attractive.

The current spacing order allows for the drilling of up to six horizontal wells. Upon the approval of a EUB application, an additional six horizontal locations will be possible. The Company has plans for a total of twelve horizontal wells on the property with the first two horizontal wells to be drilled before the end of the year.

Longbow was initially attracted to the Byemoor properties due to the fact that it is a 100% working interest, operated, oil producing property which contains significant oil in place with a historically low recovery factor to date. These attributes, coupled with the low decline rate and long reserve life make the property an excellent candidate for low-risk horizontal well development drilling in the short term, which is expected to add immediate oil rates and reserves. In the long term, a pressure maintenance strategy is planned to be developed using a reservoir simulation. The simulation is anticipated to identify longer term oil rates and reserves that are incremental to those available through the existing vertical wells and initial horizontal well drilling.

Longbow is a junior oil and natural gas company based in Calgary, Alberta with properties located in Alberta, British Columbia and Saskatchewan.

Certain statements contained herein may constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" 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. We believe that the expectations reflected in the forward-looking statements are reasonable based upon management's current views but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. No assurance can be given that actual results, performance or achievement expressed in, or implied by these forward-looking statements will occur, or if they do, that any benefits may be derived from them. Past results have been applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

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

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