CORPUS CHRISTI, Texas – April 13, 2010 - Strategic American Oil Corporation (OTCBB: SGCA)is pleased to announce it has completed reworking of the
Dixon No. 1 well on the Company’s 160-acre
Dixon lease located in Franklin Parish, La and is achieving initial oil production.
The Company also plans to rework the Dixon No. 2 well as soon as weather and ground conditions allow. The Dixon salt water disposal well has also been reworked, including upgrading of pump, flow lines, and state inspection. In addition to the Dixon No. 1 and 2 wells, there are two possible offset drilling locations and potential for deeper targets.
Once the Dixon No. 2 well is reworked and producing, the Company will obtain an independent engineering report stating proven developed producing (PDP) reserves and net present value (NPV). In addition, plans for the Louisiana fields include continuing to develop the shallow intervals while exploring the potential of deeper zones. The current focus of Strategic American Oil’s
Louisiana development is acquiring leases with existing, low-producing wells at minimum cost and reworking them to produce at maximum potential. This method builds revenue through production and increases the Company’s core reserves at a fraction of the cost of purchasing established production.
“This project is an excellent example of how our management team is following the low-risk, no-debt strategy,” said Jeremy Driver, CEO of Strategic American Oil Corporation.
Highlights of the Company’s
Louisiana oil exploration and production include:
Area Activity
Denbury Resources (NYSE:DNR) acquired the Delhi Field ($50 million acquisition) adjacent to Strategic American Oil’s leases. Denbury is developing a secondary/tertiary recovery project using CO2 injection and has completed a ~300-mile CO2 pipeline from
Mississippi to the Delhi Field and has begun injection and oil recovery (~200 BOPD) from a portion of the Delhi Field.
Deeper Targets and 3D Seismic
Strategic American Oil feels significant potential exists for deeper zones in the area of the Company’s current leases. Denbury Resources recently completed a proprietary 3D seismic shoot covering the Delhi Field area and has been actively leasing deeper rights. Clayton Williams Company is drilling deep
Cotton
Valley tests (17,500 feet) to the Southwest (on trend) in Ouachita Parish. The Monroe uplift and several recently discovered salt domes just to the south of the Dixon lease may bring these deeper targets much closer to the surface.
In order to evaluate the deeper horizons, as well as possibly expanding current
Tuscaloosa sand zones, the Company will seek to complete a 3D seismic shoot in the near future.
Leases
The Company has identified numerous existing, low-producing oil well projects that fit its model of development and is in the process of negotiating leases for these projects.
“Seeing production from the Dixon No. 1 well gives us confidence we can develop this project to its full potential,” said Driver. “With one other well that needs to be reworked, two additional offset drill targets, and potential for reserves at deeper levels, we believe this project will add to the Company’s short and long-term daily oil production and reserve base in Louisiana.
“In my previous experience, I became very familiar with the oil fields of Northern Louisiana, where our leases are situated. I recognize the potential of the area and consider these fields to be of tremendous benefit to Strategic American Oil, not just through our current production, but also through the deeper potential in these wells. I am excited to see future development of these fields and know they can bring significant value to our Company and its shareholders.”
About Strategic American Oil Corporation
Strategic American Oil Corporation (OTCBB: SGCA - News) is an exploration and development company with operations in
Texas, Louisiana and
Illinois. The Company draws on an internationally recognized team of geologists, engineers and executives with extensive oil and gas exploration and production experience. The Company’s objective is to find and acquire oil and gas projects of merit and develop those projects to their full potential.
For further information please contact:
Corporate Office:
600 Leopard Street, Suite 2015
Corpus Christi,
Texas
78401
www.StrategicAmericanOil.com
Investor Relations:
Investor Awareness, Inc.
Tony Schor or James Foy, 847-945-2222
www.InvestorAwareness.com
Safe
Harbor Statements
Except for the statements of historical fact contained herein, the information presented in this news release constitutes “forward-looking statements” as such term is used in applicable
United States and Canadian laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and should be viewed as “forward-looking statements”. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the actual results of exploration activities, variations in the underlying assumptions associated with the estimation or realization of mineral resources, the availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares, accidents, labour disputes and other risks of the mining industry including, without limitation, those associated with the environment, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, title disputes or claims limitations on insurance coverage. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release.
