Strategic American Issues Reserves Update

Strategic American Oil Corp. on Monday announced that it has received its Engineering Report from Ralph E. Davis Associates, Inc., a petroleum engineering consulting firm since 1924.

The report details the reserve estimates for Strategic American Oil's production interests in Texas and Louisiana as of Dec. 31, 2010. The report estimates net proved reserves of 979,000 barrels of oil and 13 Bcf (billion cubic feet) of natural gas which translates to approximately $75.3 million undiscounted or $54.6 million discounted at 10 percent in net Proved Reserves for Strategic American Oil.

Since its acquisition of Galveston Bay Energy, LLC on Feb. 15, 2011, Strategic American Oil has been continuously working to improve its existing production infrastructure in order to alleviate unplanned downtime and interruptions to production. As a result of this work, the Company has seen virtually uninterrupted production in April from its Galveston Bay properties—gross production has so far averaged approximately 260 barrels of oil per day and 420 Mcf of gas per day, or 330 barrels of oil equivalent (boe) per day. This is a noteworthy improvement over the previous three months where average bay production was 22 percent lower. The Company expects production will continue to increase with additional improvements to both existing infrastructure and shut-in wells.

Strategic American Oil President and CEO Jeremy G. Driver stated, "In addition to the positive report, we are also extremely pleased with the increase in our daily production which is resulting in increased cash flow and positioning the Company for additional growth. We are continuing our plan of increasing production by improving existing infrastructure and then evaluating existing wells for workover and/or recompletion opportunities. We believe there remains significant upside potential in these fields both from existing wells and future drilling."

The Company plans to hold a shareholder conference call in the coming weeks.

Strategic American Oil Corp. is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois.


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