Strategic Oil & Gas to Begin Three-Well Drilling Program in Alberta
Strategic Oil & Gas Ltd. has entered into a three well drilling commitment with a private Calgary oil & gas company to drill and evaluate three separate prospects in the liquids rich, gas prone Deep Basin region of the Western Canadian Sedimentary Basin, near the large scale, multi-zone gas fields of Caroline and Pembina, Alberta.
Each prospect is testing a low risk development target with regional trend extension and additional offsetting potential drilling locations. These wells will be targeting the high productivity, long reserve life reservoirs of the multi-zone Cretaceous sands in the West of the 5th Meridian region of Alberta, and are planned to be drilled between December 2005 and the end of the first quarter 2006. Analogous pools to these prospects have recoveries ranging from 500,000 to 1,000,000 BOE (barrels of oil equivalent).
Strategic will be paying 35% the cost to drill these wells and will receive a 26.25 % interest. If successful, the wells will be placed on production during the second quarter 2006. These prospects will provide Strategic with exposure to multi-zone targets and future growth opportunities in one of the most prolific regions of the basin.
The Company is also pleased to announce a non-brokered private placement for 1.2 million flow-through Units at a price of $0.55 per Unit. Each Unit consists of one common share plus one common share purchase warrant entitling the holder to purchase half a common share at a price of $0.75 per share for a period of six months from the date of closing of the private placement. Proceeds will be used to further the Company's 2005 and 2006 exploration programs.
The Company has agreed to pay a 7.5% cash commission and issue compensation warrants equal to 10% of Units sold.
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