We discuss an extension of the Buckley-Leverett (BL) equation describing two-phase flow in porous media. This extension includes a third order mixed derivatives term and models the dynamic effects in the pressure difference between the two phases. We derive existence conditions for travelling wave solutions of the extended model. This leads to admissible shocks for the original BL equation, which violate the Oleinik entropy condition and are therefore called nonclassical. In this way we obtain non-monotone weak solutions of the BL problem consisting of steady states separated by shocks, confirming results obtained experimentally