Strategic American Oil has accepted an unsolicited offer to acquire all of the company's interest in leases and production in Franklin and Richland Parish, Louisiana from Frazier Resources Company, Houston, Texas. Under the terms of the offer, the Company would receive 75% of a $775,000.00 cash payment, or $581,250 for the Company's 75% interest in the Holt, Strahan and Dixon leases. The Company originally acquired the producing leases in the 4th quarter of 2006 for $250,000. Frazier Resources is currently engaged in a review of the Company's leases, assignments, lease operating expenses, and related documents. Upon successful completion of Frazier's due diligence review, the parties will execute a "Letter of Intent" outlining the final sales terms and subsequently close the transaction.
Company President and CEO, Randall Reneau, stated, "Although acquiring properties, both developed and undeveloped, is the core of our current growth model, the Company could not turn down such an attractive offer that will give the Company a strong return on its original investment while increasing our cash position without diluting our share capital. The sale of these leases will allow us to focus on larger reserve plays, including a 3D seismic target in S. Texas and an enhanced oil recovery project in Jefferson County, Illinois, both of which have potential significant reserves."
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