Strategic Oil & Gas Ltd.
TSX VENTURE : SOG

October 11, 2006 16:21 ET

Strategic Oil & Gas Ltd.: Drilling Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 11, 2006) - Strategic Oil & Gas Ltd. (TSX VENTURE:SOG) ("Strategic" or the "Company") wishes to provide an update of its Canadian and Wyoming exploration projects.

Strategic Oil and Gas Ltd. has been advised by its joint venture partner, Jed Oil Inc. ("JED") who operates its Pinedale/Jonah gas wells, that they are currently working to correct excess water flow in the first 2 gas wells and are currently re-evaluating the timing of the follow up wells, given current gas prices.

Formation water production was encountered during initial flowback of the first well drilled in Pinedale. A spinner survey was completed and determined that two of the eleven fracture stimulation states within the well accounted for the majority of the water production. An assembly has been placed in the well that will enable isolated testing to be conducted at the various stages of the well.

Drilling and fracture stimulation of the second well in the Pinedale area has been completed. Following the fracture stimulation, the well was flowing at rates as high as 1.5 mmcf/d through the frac plugs while recovering the frac fluid. When the frac plugs were removed, formation water production was encountered similar to the first well. A spinner survey will be performed as soon as possible to determine what stages the water production is coming from. It is anticipated that an isolation assembly will be run in this well similar to the first well.

As mentioned in its news release dated September 14, 2006 Strategic Oil and Gas Ltd. and Jed obtained approval from the Wyoming Oil and Gas Conservation Commission to increase the well density from one well per 40 acres to one well per 20 acres on the Company's lands. This approval will allow for the drilling of up to 32 wells on the Company's current land holdings.

The Company is pleased with its progress on its six well program on six separate prospects in the liquid-rich deep basin region of the Western Canadian sedimentary basin near the large scale, multi-zone oil and gas fields of Caroline, Pembina and Sylvan Lake, Alberta.

The Company has successfully drilled and completed the first five wells of a six well program. The first two wells were completed as oil wells with uphole gas and were put on production in March and April 2006. The Company also successfully drilled and completed three gas wells. The 9/10 well near Sylvan Lake went on production on October 7, 2006. Pipeline and facilities are currently being installed and it is anticipated that the remaining two wells will be in production on or about December 1, 2006. The success of this initial program has led to additional drilling locations on earned lands which are currently being evaluated drilling in the current quarter. A follow-up location to the Company's cardium oil wells has been licensed and drilling is expected to commence shortly.

Strategic continues to evaluate further prospects in the Western Canadian Sedimentary Basin and the Western United States.

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 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 is under no obligation to update or alter any forward looking statement. These risks include operation and geological risks, the ability of the Company to raise necessary funds for exploration and the fact that the Company does not operate its properties. 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
    President
    (604) 685-1349 or Cell: (604) 780-9810
    Email:arn@helix.net