Strategic American Oil Commences Drilling at Koliba Prospect

Strategic American Oil announced that drilling operations have commenced on its Koliba prospect in Victoria County, Texas. The Company has retained a 16.33% carried working interest to casing point, 25% working interest after casing point. The combined leased acreage (Koliba-Linville) consists of 143 acres covering an anticipated anticlinal structure (target) offsetting production. The new well is a direct offset to the Murphy Baxter, Koliba #1 well which previously produced from the 5,880 feet (target) zone.

The Koliba prospect lies in the North McFaddin Field, which, according to Texas Railroad Commission maps and records, hosts 87 productive oil and gas zones. There are numerous key points that make the Koliba prospect particularly attractive to SGCA, including:

Multi-Pay Zones

The Company has identified three potential target zones at 5,880 feet, 5,350 feet and 4,930 feet under the Koliba lease.

Historic Production

Texas Railroad Commission records indicate seven wells from these three target zones produced 390,426 barrels of oil and 2,472,481 MCF (thousand cubic feet) of gas.

Strong Well Control

The Koliba prospect was evaluated by means of surrounding well control, adding confidence and lowering risk to the geologic interpretation. A minimum of 50 surrounding well bores and their associated well logs were used in developing the geologic interpretation. The prospect interpretation is both a structural and stratigraphic trap that includes a four-way closure.

Strategic American Oil Vice President of Operations Steven Carter, who has over 25 years of engineering experience in oil and gas exploration, production operations, reservoir management, and drilling, will operate the well through Carter E&P, LLC, a licensed and bonded operator in the State of Texas.

Strategic American Oil President and CEO Jeremy Driver said, "The start of drilling of the Koliba prospect is a great milestone for the Company. The Koliba is our first fully in-house developed prospect, which demonstrates we can execute our business plan of finding, acquiring and developing what we believe are low risk/high reward development projects utilizing a carried-interest model. Our goal is to increase production, cash-flow, and reserves. When we successfully execute this strategy and strengthen the fundamentals of the Company, the stock valuation will follow."