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Strategic American Oil Corp. (SGCA.OB) Strengthens its Position in the Oil-Rich Illinois Basin

Strategic American Oil, – the oil and gas exploration and production firm with primary operations in Texas, Louisiana and Illinois, reported on efforts to extend and consolidate its footprint in Illinois today.

The report highlights part of an overarching agenda by the Company, typified by the Waterflood #1 (WF1) prospect, to instantiate a diverse resource recovery program in the Illinois Basin.

Waterflooding has proven efficacious and leads to great success for dozens of public and private companies, and SGCA has extensive knowledge of the technology, which has seen widespread use for over half a century, with almost all the major sector players engaged in secondary recovery projects.

Recent leasing of over 2,900 acres in the basin, coupled with ongoing identification of prospects and subsequent organization of leasing programs to acquire said prospects, are other elements of this aggressive, production-driven strategy for SGCA.

President and CEO of SGCA, Jeremy Driver, detailed some of the advantages to developing a stronger portfolio of low-cost/high-reward sites in the oil-rich Illinois Basin (4.1B barrels remaining according to the Illinois State Geological Survey):

• $25-30 per acre lease costs
• 12.5-15% royalty rate
• Shallow target zones within 2-4k feet
• Low drilling/operating costs
• Multiple target zones
• Low competition due to favorable relations with mineral/land owners
• Solid well control
• Low lease bonuses

The aforementioned WF1 has served as a laboratory for refining a robust pilot program, which is now being finalized, and independent engineering reports indicate primary as well as secondary recovery methods (waterflood for instance) will prove quite fruitful.

Two additional zones in the field have yet to see optimal utilization of any sort, and may indeed hold abundant primary reserves over and above the waterflood-recoverable resources.

Driver asserted his strong belief that pursuing a stronger footprint in the Basin, via development of the WF1 as well as a second identified waterflood target (preliminary work already underway) and other projects, will “reap great economic rewards for the Company and its shareholders”.
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