Strategic American Oil Enters Partnership to Drill Tx. 3D Seismic Prospect

Strategic American Oil has entered into a new partnership with Chinn Exploration Company to expedite the drilling of Strategic American Oil's 3D seismic prospect in Kenedy County in South Texas. The partnership is subject to approval by the project leaseholder. As a result of this new partnership, preparations for drilling of the first test well have already begun.

The test well will be located on the 1,043 net acre mineral lease obtained by Strategic American Oil in 2009. The Frio Sand targets in South Texas were identified through its acquired 303 sq. mile 3D seismic database. The Company's exploration team believes the multiple Frio sands identified in the seismic profile could contain substantial gas and condensate, and proposes to drill one to two wells to test the Frio zones. The target depth is approximately 13,800 feet.

"With our new partners we are looking forward to commencing our first test well into what we believe is a very attractive 3D seismic prospect," said Strategic American Oil Corporation President and CEO, Jeremy Driver. "The sheer size of the structures and the multiple plays identified makes this prospect very worthwhile."

Strategic American Oil will assign operatorship to Chinn Exploration Company, a fully-licensed and bonded Texas oil and gas operator. Chinn was assigned 81.25 percent of the working interest in return for paying all drilling costs, estimated at $3 million, and will pay $200,000 to Strategic American Oil for leasing, land and geophysical work. This means that Strategic American Oil Corporation will not be required to pay any costs for drilling the first test well and has recouped its hard costs to date. If/when the well is completed, Strategic American Oil will pay its share of the completion costs. This aligns with the Company's existing strategy of finding partners to assume all exploration risk, while retaining a carried interest in the project.


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