2009-10-28-2009-08-18-2009-10-15

Bought company with assets in Alberta, gaining 2,714 BOE/d, 12.9 MMBOE proved.

Twin Butte Energy Ltd., Calgary, (Toronto: TBE) has acquired Buffalo Resources Corp., Calgary, (Toronto Venture: BFR) for C$121 million in stock and debt assumption. Twin Butte issued 54.4 million shares as consideration for the deal, which traded for approximately C$0.94 each at closing. Twin Butte additionally assumed approximately C$70 million in Buffalo debt. The assets consist of properties in primarily in Alberta in the Peace River Arch, Frog Lake, Pincher Creek, Viking Killam and Whitecourt areas. The deal also involved some Saskatchewan properties. Production as of June 30 was approximately 2,714 barrels of oil equivalent per day. Proved reserves as of year-end 2008 were 12.9 million barrels equivalent and proved and probable reserves were 21.5 million barrels equivalent. Buffalo has also acquired an industry partner's working interests in various Buffalo wells for C$7.7 million. These interests added approximately 300 barrels equivalent per day of production. Twin Butte now has more than 285,000 net acres of undeveloped land. Production is now 5,850 barrels equivalent per day (64% gas) and is expected to be raised to 6,500 barrels per day when the Pincher Creek assets return to production by year-end. Proved reserves are 21.1 million barrels equivalent (28.7 million barrels equivalent proved and probable). Twin Butte president and chief executive Jim Saunders says, "The acquisition of Buffalo is consistent with our strategy of acquiring quality assets, with large reserves in place, within focus areas where we have expertise. We are excited about what Buffalo brings to the table when combined with Twin Butte's existing assets and opportunities. As a bigger, stronger company we will use our financial flexibility to capitalize on the drilling upside within the combined company. We continue to see attractive acquisition opportunities and will augment our organic growth with additional accretive acquisitions. We are on our way to becoming the next high-growth intermediate producer." Buffalo's founder, president and chief executive Bill Trickett says he believes the combined company is better able to compete in the current environment. "This transaction is the result of an exhaustive process during which our board and our financial advisor explored a number of different alternatives to maximize shareholder value. The combination of Buffalo's and Twin Butte's high-quality asset base and aggressive approach results in a company capable of significant growth." Twin Butte now has approximately 109.7 million Twin Butte shares outstanding. Buffalo directors William Trickett and Murray Sinclair have joined the Twin Butte board. Cormark Securities Inc. was financial advisor to Buffalo. Peters & Co. Ltd. was strategic advisor to Twin Butte.