|Projects Prove Success of Strategic American Oil Corp. (SGCA) Strategy|
The success of an oil and gas exploration and development strategy is best seen in the projects it generates. Strategic American Oil’s objectives of using 3D seismic data and other technologies to identify and acquire the best domestic oil and gas opportunities has led to the following projects.
Galveston Bay Energy – Acquired in February of 2011, Galveston Bay Energy represents multiple high-value drilling targets, with 4 fields: Trinity Bay, Fisher’s Reef, Red Fish Reef, and North Point Bolivar. The company’s careful target valuation strategy paid off, with the quick re-completion and production of the Fisher’s Reef G2-3A well. In addition, the company has now successfully reworked and increased production from its State Tract 343 No. 18 well in the North Point Bolivar Field of Galveston Bay, significantly increasing revenues.
Welder/barge Canal – Strategic currently produces from two Frio Sand wells located on the Welder Lease. A gas lift system is utilized to produce the wells. Gas not used in the gas lift system is sold. The lease also contains one salt water disposal well.
Janssen 1-A – Strategic owns a 3% working interest in the Janssen A-1 Well. The Janssen produces around 250 mcfgpd from the Roeder Sand (Wilcox) at a depth of 10,300 feet. PDNP Pettus sand (oil) is behind pipe at 4000’, and a possible gas sand was indicated on logs at 3060’.
Markham City North Field – Strategic has leased over 560 acres in the Markham City North field, which has already produced 1.6 million barrels of oil. The targeted land position is in a previously producing oil field with the potential of hosting significant in-place reserves through waterflood recovery.
Jefferson County Waterflood Prospect – The company leased a land position in a previously producing oil field that could host significant in-place reserves which Strategic seeks to produce using the Enhanced Oil Recovery method (waterflood). The field previously produced an aggregate of 1.5 million barrels of oil during the 1940s and 1950s.
South Delhi / Big Creek Field – Strategic has current production in Louisiana. The company’s Louisiana Holt wells are situated in the Delhi South Field, adjacent to Denbury Resources.
The bottom line results from developing the above projects were announced in December, with the release of fiscal first quarter results. Revenue for the quarter was up 1,400% over the same quarter a year prior, to $1.56 million. Assets grew in the first quarter by $7.86 million, without adding debt. Cash used in operations was reduced from $250,000 in the previous quarter to $83,710. The reported net loss of $4.2 million included non-cash acquisition charges of $4.37 million. Production, as of Nov. 30, 2011, was estimated at 445 gross barrels of oil per day (350 net). Management anticipates increasing the company’s production beyond 1,000 barrels of oil equivalent per day (boepd) by the end of this year.
For additional information, visit www.StrategicAmericanOil.com
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