Cypress Hills Spuds Initial Well on Armstrong Ranch, Texas Project

CYPRESS HILLS RESOURCE CORP. has announced that Cypress Hills (USA) Resource Corp. and its partners have spud the initial test well on the Armstrong Ranch Project in Kenedy County, Texas. The Tobin Armstrong No. 2 well will be drilled to a depth of 10,500 feet to test the Frio sands.

The partner's initial location has been changed in order to satisfy an offset obligation created by the drilling of a well along the northern border of our lease by the holder of the adjacent lease. The Tobin Armstrong No. 2 well will take approximately 30 days to drill, complete and test. The Company has a 10% BPO (7.5% APO) working interest in this first well on our 1,477 acre lease. The total drill cost to the Company will be approximately $135,600.00.

Should this initial test well be successful, a number of follow-up locations are available on the lease and the Company has a right of first refusal on additional leases totalling approximately 3,000 acres in the immediate area.