Strategic Oil & Gas Ltd
TSX VENTURE : SOG

Strategic Oil & Gas Ltd

December 16, 2009 16:01 ET

Strategic Announces Final Closing of Private Placement

CALGARY, ALBERTA--(Marketwire - Dec. 16, 2009) - Strategic Oil & Gas Ltd. ("Strategic" or the "Company") (TSX VENTURE:SOG) has completed the final closing of its current private placement by the issuance of a further 4,638,597 units ("Units") at $0.45 per Unit, each Unit consisting of one common share and one common share purchase warrant entitling the holder to acquire one additional common share for a period of one year from closing for $0.60 and 1,795,092 flow-through units ("Flow-Through Units") at $0.55 per Flow-Through Unit, for total proceeds of approximately $3,100,000. Each Flow-Through Unit consists of one common share and one half of a Flow-through warrant, each whole Flow-through warrant entitling the holder to one additional common share for $0.70 for one year from closing. Finder's fees of approximately $87,000 and 164,400 broker warrants exercisable into common shares for one year from closing at an exercise price of $0.60 were paid to finders in respect to this portion of the private placement. 

Proceeds from this portion of the financing will be used for the southern Alberta work program on the Company's recent Southern Alberta acquisition; the Company's Maxhamish winter drill program and for additional working capital. The securities issued pursuant to this portion of the private placement are subject to trading restrictions ranging from March 4, 2010 to April 2010.

Strategic has raised a total of approximately $14,500,000 in gross proceeds from this and the brokered portion of the financing, including the exercise of a $2,000,000 over-allotment option and an increase of $1,500,000 over the originally announced amount.

The Company also announces that its primary lender, Alberta Treasury Branches ("ATB) has increased its available revolving operating line of credit from $3,000,000 to $5,000,000 effective December 15, 2009. The increase resulted from the Company's previously announced acquisition of producing oil properties in the Taber and Conrad areas of Southern Alberta. The increased revolving operating line of credit will be available for future capital expenditures in Canada or for general corporate purposes. The terms are similar to the previous terms as the interest rate is prime plus 1.75%, with the next review by ATB scheduled for May, 2010. Strategic should not need to utilize this additional line during the next nine months for current projects as the drilling programs at Maxhamish and the drilling/optimization programs at Taber and Conrad are anticipated to be funded from current cash. 

About Strategic

Strategic is a junior oil and gas company with producing properties located in Southern and Central Alberta. Production is currently 340 to 350 boe/d as a result of additional production brought onstream late in the fourth quarter of 2009. 

Strategic's highly regarded subsurface technical team is primarily focused on implementing development plans for the Maxhamish project and its southern Alberta properties, while reviewing other high impact prospects.

Further information with respect to the Company is available on its website at www.sogoil.com.

Forward-looking information

Certain information set forth in this document, including management's assessment of future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control. Those risks include, without limitation, the effect of general economic conditions, risks associated with oil and gas exploration, development, production, marketing and transportation, loss of markets, industry conditions and competition, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the ability to access qualified personnel and oilfield services, decisions by regulators and the ability to access sufficient capital from internal and external sources. Readers are cautioned not to place undue reliance on the forward-looking statements as the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and actual results, performance or achievements could materially differ from those expressed or implied in such forward-looking statements and accordingly, no assurance can be given that any of the events anticipated by forward looking statements will transpire or occur, or if any of them do so, what benefit Strategic will derive therefrom.

Boe presentation

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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