Strategic Oil & Gas Ltd
TSX VENTURE : SOG

Strategic Oil & Gas Ltd

September 16, 2010 15:25 ET

Strategic Oil & Gas Ltd. Announces $20 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - Sept. 16, 2010) -

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Strategic Oil & Gas Ltd. (TSX VENTURE:SOG) ("Strategic" or the "Company") announces that it has entered into a financing agreement with a syndicate of underwriters, led by Macquarie Capital Markets Canada Ltd., and including CIBC World Markets, Clarus Securities Inc., PI Financial Corp. and Raymond James Ltd., (collectively the "Underwriters") to issue and sell on a "bought-deal" basis, 16,700,000 common shares of Strategic (the "Common Shares") at a price of $0.90 per Common Share (the "Common Share Offering Price") and 4,550,000 Common Shares to be issued on a flow-through basis (the "Flow-Through Common Shares") at a price of $1.10 per Flow-Through Common Share (the "Flow-Through Common Share Offering Price"), for expected gross proceeds of $20,035,000. The Underwriters have been granted an option by the Company (the "Over-Allotment Option") to acquire up to an additional 2,505,000 Common Shares and 682,500 Flow-Through Common Shares (equal to 15% of the Common Shares and Flow-Through Common Shares, in aggregate, sold pursuant to the offering) at the Common Share Offering Price or the Flow-Through Common Share Offering Price, as applicable. The Over-Allotment Option is exercisable in whole or in part for a period of 30 days from closing of the offering.

Proceeds from the offering of the Common Shares will be used to accelerate the development of Strategic's Maxhamish property, fund ongoing light oil development at Taber and Conrad, fund future opportunities and for general corporate purposes. The Flow-Through Common Share proceeds will be used to incur eligible Canadian exploration expenditures that will be renounced to subscribers effective on or before December 31, 2010. The Common Shares and Flow-Through Common Shares will be offered in certain provinces of Canada by way of short form prospectus.

Closing is expected to occur on or about October 7, 2010 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

About Strategic

Strategic is a junior oil and gas company with producing properties located in Maxhamish, northeast BC and Southern and Central Alberta. Production capability is currently over 300 boe/d (excluding Maxhamish) with additional production expected to be brought onstream during the third quarter of 2010 from the recently announced drilling program at Taber and Conrad.

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

Further information with respect to the Company, including the AGM presentation, can be found 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, closing of the offering and the proposed use of proceeds 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, the state of the capital markets generally 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. The Company does not assume the obligation to revise or update this forward-looking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

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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