Strategic Oil & Gas Ltd

Strategic Oil & Gas Ltd

March 12, 2009 09:50 ET

Strategic Oil & Gas Ltd.: Closing of Acquisition of ZinMac Inc. and Operational Update

CALGARY, ALBERTA--(Marketwire - March 12, 2009) - Strategic Oil & Gas Ltd. ("Strategic" or the "Company") (TSX VENTURE:SOG) wishes to provide an update:

Acquisition of ZinMac Inc.

Strategic has closed its previously announced arms-length acquisition of all of the issued and outstanding shares of ZinMac Inc. ("ZinMac"), a private oil and gas Alberta corporation. The initial agreement announced on July 29, 2008 was allowed to lapse and was re-negotiated on similar terms on March 2, 2009 at a deemed price of $0.25 per share, which reflects recent market conditions. The Company has issued 5,000,000 common shares to the 9 shareholders of ZinMac, who will provide to the Company their collective technical expertise. All shareholders are bound by an escrow agreement that allows for the release of shares of 10% on closing, 15% in 6 months and then 15% increments over each additional six month time period. In addition, 100,000 warrants of ZinMac will be converted, in accordance to their terms, into 370,370 warrants of Strategic, exercisable at $0.27 per share until May 8, 2011.

Based in Calgary, Alberta, ZinMac's primary business is upstream oil & gas exploration and development projects, using 3D geomodelling technology and geostatistical methods as leverage over peer competitors. Key members of the ZinMac management team have expertise in these emerging fields, and introduce to Strategic a significant competitive advantage.

The ZinMac technical team, as described in the Company's press release dated July 30, 2008, allows Strategic a dual business strategy which is suited to its complementary technical skills and experience base covering both the domestic and international arenas through prior employment with E&P majors and large independents such as BP, Shell, Mobil, Phillips, Total, Elf and Talisman. In this context, the team also brings an opportunity stream of international properties into the Strategic portfolio, such as the Gabon transaction that Strategic continues to be interested in.

As a complement to the international opportunities already in progress, conventional discovered reserves are the primary focus of the ZinMac team in western Canada, where recent industry studies indicate that significant, untapped recoverable reserves remain in under, or un-exploited conventional reservoirs. The management team is actively evaluating opportunities in western Canada such as the Company's recently announced Maxhamish play in Northern BC with a major independent Canadian oil corporation.

As a result of the combination of Strategic and Zinmac, the Company has an experienced management team comprised of:

Arn Schoch - President & CEO

Jim Screaton-Vice-President & CFO

Sean Hayes-Chief Operating Officer

Gurpreet Sawhney-Vice-President, Business Development

Tony Wain remains with the Company as a consultant in respect to international opportunities.

This group is supported by other experienced technical staff with geological, geophysical and reservoir engineering capabilities. The board of directors did not change as a result of this acquisition.

In conjunction with the Zinmac combination, Strategic has agreed to issue 1,855,000 stock options to employees, directors and key consultants, of which 1,200,000 will go to insiders. These options will be issued in accordance with Exchange guidelines and regulations and are subject to Board approval. These options will vest over two years, have a five year term and will be issued with an exercise price of $0.25 per share for those options vesting immediately (1/3), $0.50 per share for those options vesting in one year (1/3) and $0.75 per share for those options vesting in two years time (1/3).

ZinMac's financial statements for the last two years are summarized below.
Material aspects include:

December 31, 2007 December 31, 2008
(Audited) (Unaudited - prepared by management)

Cash and cash
equivalents $ 947,334 $216,644
Total assets $1,164,906 $433,392
Current liabilities $ 228,808 $ 9,380
Shareholder's equity $ 926,298 $414,212
Operating loss $ 273,702 $662,086

With the integration of this personnel into its management and technical teams, Strategic is now well positioned to capture and develop both the international and domestic opportunities that it is presented with.

Operational update

Strategic announced on January 16, 2008 that the well at Strachan Alberta 15-28-37-8W5M targeting the Leduc sour gas formation had commenced drilling. The Company has recently been informed by the operator that no commercial hydrocarbons were encountered during testing operations and that the Leduc formation has been abandoned.

The Company plans to meet with its partners and the operator as soon as possible to review other potential opportunities that were encountered during the drilling of the Strachan 15-28 well.

Certain information regarding the Company contained herein may constitute forward looking statements. Forward looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties, including but not limited to the geological and engineering risks attendant on all exploration or development well, and the fact that the Company may need to raise additional capital to fund further exploration, and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward looking statements. The Company's forward looking statements are expressly qualified in their entirety by this cautionary statement.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.

Contact Information

  • Strategic Oil & Gas Ltd.
    Arn Schoch
    (403) 870-1245 or Cell: (604) 780-9810