CORPUS CHRISTI, Texas, Oct. 21, 2010 (GLOBE NEWSWIRE) -- Strategic American Oil Corporation (OTCBB:SGCA) has received approval from the Lessor to enter into its new partnership with Chinn Exploration Company on Strategic American Oil's 3D seismic prospect in Kenedy County, South Texas. As a result of this approved partnership, Chinn Exploration has signed the drilling contract and submitted the drilling permit, advancing efforts to have the first test well drilled.
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 proposes to drill one to two wells to test the Frio zones. The target depth is approximately 13,800 feet.
Bob Bennett, Strategic American Oil's contract seismic expert who has more than 20 economic oil and gas discoveries to his name, said of the prospect, "With more than two decades of experience exploring for oil and gas in South Texas with 3D seismic, I have never had the opportunity to discover or participate in a 4-way closure Frio structure such as this. These structures are usually cherry-picked by the major oil companies as drilling locations of choice. I believe this prospect has the potential to be a substantial new field discovery along this highly active trend."
"Approval from the Lessor allows us to move this project ahead expeditiously with our first test well for 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. 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.
About Strategic American Oil
Strategic American Oil Corporation (OTCBB:SGCA) is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. The Company seeks accretive acquisitions of production, reserves or other companies that will provide significant growth potential. Further information can be found on the Company's website at. www.StrategicAmericanOil.com.
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Except for the statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" as such term is used in applicable United States and Canadian laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans, "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the actual results of exploration activities, variations in the underlying assumptions associated with the estimation or realization of mineral resources, the availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares, accidents, labour disputes and other risks of the mining industry including, without limitation, those associated with the environment, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, title disputes or claims limitations on insurance coverage. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release.
CONTACT: Strategic American Oil Corporate Offices: www.StrategicAmericanOil.com 600 Leopard Street, Suite 2015 Corpus Christi, Texas 78401 Investor Awareness, Inc. Investor Relations: Tony Schor James Foy 847-945-2222 www.InvestorAwareness.com