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CORPUS CHRISTI, Texas, Feb. 16, 2011 (GLOBE NEWSWIRE) -- Strategic American Oil Corporation (OTCBB:SGCA) today announced that it closed the purchase of Galveston Bay Energy, LLC ("GBE") on February 15, 2011. Based upon the cash purchase price of $9.9 million, the imputed cost of proved producing reserves is $0.46 per Mcfe, or $2.75 per barrel of oil equivalent.
For the five months ended Dec. 31, 2010, production averaged 2.3 million cubic feet gas equivalent per day (MMcfepd), or 378 barrels of oil equivalent per day (boepd).
An independent engineering report (utilizing SPE standards) estimated net proved reserves as of October 1, 2010 total 3.6 million barrels of oil equivalent (boe), or 21.9 billion cubic feet of natural gas equivalent (bcfe), of which 27% is represented by proved developed producing and shut-in categories.
The GBE properties are located on the Texas Gulf Coast and consist of five fields encompassing 24,556 gross and 22,950 net acres located in prolific producing areas. GBE operates 100% of its production, and maintains approximately 85% working interest in virtually all of its producing properties. Jeremy G. Driver, CEO of Strategic American Oil, stated, "This is a seminal event for Strategic American, which provides us a solid financial and operational foundation. Our goal is to grow production and cash flow. This transaction is immediately accretive to cash flow, production, and reserves on a per share basis." Mr. Driver further stated, "The Company's 2011 program is weighted towards low risk development and workover projects. Strategic now has a multi-year inventory of diversified projects in a key domestic producing hydrocarbon basin. We are also excited about exploration opportunities with respect to deeper pools not identified in our independent engineering report." The acquisition was funded with proceeds from a private placement of common stock.
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
The Strategic American Oil Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6891Safe Harbor Statements
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.
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Tony Schor or James Foy