Strategic American Oil IDs Drilling Target in Illinois Basin

Strategic American Oil has identified a new Pinnacle Reef oil drilling target (the P4 Reef Prospect) in the Illinois Basin. The prospect target is located at depths between 2,000 and 2,500 feet. The Company plans to lease approximately 500-600 acres over the identified prospect and drill to evaluate the prospective subsurface geology. This prospect was identified in the Illinois Basin through the research of records from the Illinois State Geological Survey.

The P4 Reef Prospect is developed from coal exploration data and related information on record and available through the Illinois State Geologic Survey (ISGS). Coal drilling data shows a significant thinning of the number #6 coal at the P4 Reef Prospect. Historic oil drilling data associated with many oil productive pinnacle reefs in Illinois shows the existence of distinct thinning of the coal above the rigid reef structures.

Company President and CEO, Jeremy Driver, stated, "The identification of this drilling target adds to our development plans for the Illinois Basin. According to the ISGS, successfully developed pinnacle reefs in the region average about 2.5 million barrels of recoverable oil at depths of 2,000 to 3,000 feet. With prospects of this potential, we are very excited about our future development within the Illinois Basin."

"The Company is now at the point where it is not only focused on leasing but also drilling projects in our Illinois and Texas portfolios," Driver continued. "We have begun discussions with numerous parties interested in entering into a joint venture arrangement to expedite these drilling programs and we are seeing significant headway. This is a very exciting time for Strategic American Oil and its shareholders."

The Strategic American Oil team in Illinois, led by Chief Geologist Jim Thomas who has over 35 years experience working in the Illinois Basin, is continuing to make progress in finding and leasing new attractive targets, which furthers Strategic American Oil's business model of developing prospects in-house to build the Company's oil reserves and increase production. The Company will continue to review and evaluate data from the Illinois State Geological Survey to identify new drilling prospects with the goal of making new oil field discoveries.

Pinnacle Reefs are isolated biothermal structures. These reefs are relatively shallow in Illinois, averaging between 2,000 to 2,500 feet in depth, allowing for low-cost drilling programs. The Company's geologists have made extensive use of Illinois State historical coal drilling records; these records show coal seams overlaying pinnacle reefs that are marked as thinning and/or are structurally higher than expected making historic coal drilling logs extremely valuable in the search for pinnacle reefs. Due to the shallow depths of these structures, the Company will rely heavily on subsurface structural mapping to delineate possible reef targets. It may be cost effective to utilize 3D seismic surveys prior to drilling targets below 3,000 feet. Each reef prospect will be evaluated as to determine the most cost-effective exploration program. According to the Illinois Geological Survey, successfully drilled and producing pinnacle reefs in the Basin produced an average of 3,200,000 barrels of oil. With today's advances in subsurface mapping and advanced 3D techniques, Pinnacle Reefs have become a prospective target for new oil field discoveries in the Illinois Basin.


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