Strategic Oil & Gas Ltd
TSX VENTURE : SOG

Strategic Oil & Gas Ltd

July 08, 2010 05:30 ET

Strategic Oil & Gas Ltd. to Commence Drilling Program in Southern Alberta

CALGARY, ALBERTA--(Marketwire - July 8, 2010) - Strategic Oil & Gas Ltd. (TSX VENTURE:SOG) ("Strategic" or the "Company") provides an update of its operations in Southern Alberta:

Conrad

Strategic was successful at several Crown sales in the last six months, acquiring an additional 4,920 acres (gross and net) of land for approximately $65 per acre. After the recent land acquisitions, Strategic now has over 13 sections of land in Conrad. Incremental oil production is expected to be added at Conrad from selective drilling and enhanced recovery methods. Initially, Strategic plans to determine the extent of the Sawtooth zone through vertical and horizontal drilling.

In late December 2009, Strategic drilled its first well at North Conrad (11-23). This vertical well was drilled to the Sawtooth formation, at a depth of 1,000 metres. Current production is 20-30 barrels of oil per day. These initial results are encouraging and evidence Strategic's ability to produce from the Sawtooth formation with initial low water-cut levels. 

Strategic has recently licensed a horizontal well at 8-23Hz, which will spud on July 7, 2010. The spud date has been delayed by approximately three weeks due to the extremely wet conditions in southern Alberta in June. This well is planned as a multi leg horizontal well, that will target the Sawtooth formation. This well is targeting production of 80 bopd of medium API oil. This well will help determine the extent and continuity of the porous sand and, if successful, has the potential to open up over ten additional locations.

Taber

As previously announced on March 29, 2010, the Company has brought in a partner to allow for an accelerated drilling program at Taber. The terms of this agreement have the partner paying $1.6 million to drill two or three wells and earn a 25% interest in the property. The Company has licensed 2 wells (11-14 and 4-24) and is in the final stages of securing a rig to drill two vertical wells, with the objective of commencing drilling by mid-July. This drilling program has also been delayed by the wet conditions. There is a potential that a third well may also be drilled. Target sands are basal quartz Glauconitic and Lower Mannville which are characterized as having high porosity and permeability. It is anticipated that the current drilling program can add in excess of 150 bopd (net to Strategic) of potential production. 

About Strategic

Strategic is a junior oil and gas company with producing properties located in Southern and Central Alberta. Production capability is currently in excess of 300 boe/d, with additional production expected to be brought onstream during the third quarter of 2010 from the above drilling program. The Company expects to be in a position to release the results of the successful Maxhamish drilling program in the very near future.

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 Corporation 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, 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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