Wednesday, July 15, 2009

Dear Readers,

Over the past few months you've seen some extraordinary performances in the market by the companies we've been fortunate enough to feature.

Today, we may have a new story for you to follow. We encourage you strongly to bookmark the symbol SGCA immediately in your watchlists at Yahoo Finance, eTrade, TD Ameritrade, etc. This will guarantee that you don't miss any future news announcements by this intriguing oil and gas play and that you can begin to do your homework on the company.
And while we believe strongly in alternative energy as we've often published, we're also strong fans of the RIGHT oil and gas companies. We don't see oil and gas ever going away and of course, most Alternative Energy is still a ways away from its full potential.
So, today we're pleased to showcase Strategic American Oil (OTCBB: SGCA) and to again, encourage you to follow this U.S. based oil and gas company. An Oil and Gas Play
With oil prices rising again, greater interest in oil exploration was certain to follow. Additionally, the marriage of a previously producing oil field, heightened barrel prices, and enhanced technology presents one exploration company with an ample opportunity. Factor in the presence of a geologist with thirty years expertise in the exact area of interest and the story gets even more compelling.
Recently, Strategic American Oil Corporation (OTCBB:SGCA)- an exploration and production company with operations in Texas, Oklahoma, Louisiana, and Illinois, announced it has leased an Illinois land position in a previously producing oil field that could host significant in-place reserves through Enhanced Oil Recovery. By researching the Illinois State Geological Survey, the company has discovered the oil field previously produced an aggregate of 1.5 million barrels of oil during the 1940s and 50s. Nearby waterflood operations in the same zones have yielded a 1:1 recovery. Strategic American has leased approximately 372 acres of the oil field and plans to use existing injection wells while drilling new recovery wells to 4,000 feet.
Additionally, the company announced that it has received two additional 3D seismic surveys from Echo Geophysical Corporation. The first of the two surveys covers 25.58 square miles in Refugio County, Texas, and the second survey covers 26.47 square miles also in Bee/Refugio County, Texas. Consulting geophysicist Bob Bennett will begin evaluation of the two additional surveys shortly. Mr. Bennett has completed his review of the 172 sq. mile South Texas 3D seismic data and identified a anticlinal structure with 4-way closure covering portions of six sections.
Randall Reneau, President and CEO stated, "Access to these 3D seismic databases is continuing to add value to Strategic American Oil. As we found with the first database acquired, the potential to discover overlooked structures likely to contain oil and gas reserves is excellent. These databases allow us to identify targets with great accuracy and develop exploration programs with the goal of increasing the company's oil & gas production and reserves."
It will be interesting to follow Strategic American as Chief Geologist, Jim Thomas, who has approximately 30 years of experience in the Illinois basin and degrees from South Illinois University, leads his team into this previously producing area. If oil prices continue their ascent, every drop Thomas and Strategic American may locate could be worth even more.

Strategic American OilOTCBB: SGCAClick Here for a Current Stock Quote

CORPORATE OVERVIEW

Strategic American Oil (OTCBB: SGCA) is an exploration and production company with operations in Texas, Oklahoma, Louisiana and Illinois. The company draws on the experience of an internationally recognized team of geologists, engineers, and executives with extensive oil and gas exploration and production experience combined with corporate and financial expertise. SGCA has developed and implemented a multi-tier growth program:

* Develop salable drilling prospects in-house retaining a carried interest to casing point

* Drilling of offset wells retaining a majority of the working interest

* Develop secondary recovery (waterflood) projects

* Increase production by re-working existing producing or previously producing wells

* Develop proven undeveloped zones (behind pipe) in existing wells.

* Acquire currently producing oil and gas wells

With a proven team that includes technical expertise in oil and gas operations, business management, and financing, the company is in a strategic position to find and acquire projects of significant merit and develop these projects to their full potential. Strategic American Oil will continue to aggressively seek projects with the near term goal of growing from a development stage oil and gas exploration company into a mid-tier US oil and gas producer.

OUTLOOK

Texas, Louisiana Oklahoma and Illinois projects are the foundation of an exciting exploration and development program. The prospects reviewed are a sample of the opportunities that are being developed by the Strategic American Oil team. SGCA is currently negotiating to acquire additional oil and gas production, leases, and 3D seismic data. Continued success and investor support will provide the Company with the means to acquire and capitalize on prospects that are consistent with its strategy.

Long term economic forecasts view the energy sector following an upward trend. Acquisitions of energy resources and energy resource companies, especially those with oil and gas assets, are accelerating. Strategic American Oil Corporation’s technical expertise and current operations in Texas, Louisiana, Oklahoma and Illinois, place the Company in advantageous position to experience vertical growth in the near future.

THE MARKET

With the international economic downturn demand for natural resources, including energy, has decreased. This decrease in demand is considered by many analysts as a short term lull that will pick up with the turning of the economy. In spite of the troubled economy, there are numerous factors that make the energy sector interesting. These factors include OPEC decreasing production, international production continuing to decline, the US government subsidizing the Big Three automakers, the international economy rebounding, and political instability in oil rich countries. As Iraq works toward becoming a stable nation, Iran’s relations with the Western world continue to deteriorate. Wells in the oil sands of Alberta are being shut down due to the costs of production eliminating profit potential. Internationally governments are acting aggressively to turn around the failing global economy. All these elements should have the accumulative effect of an increased $/barrel of oil over the coming year.
Earlier this month OPEC confirmed it would decrease production by 2.2 million barrels per day in an effort to stabilize sagging oil prices. OPEC has reduced daily production by 4.2 million barrels per day so far this year, about 12%. OPEC President Chekib Khelil said that his group wants to push inventories down to 52 days’ worth of supply and lift prices back up to $70-$80 a barrel.

STRATEGIC ELEMENTS

With a proven team that includes technical expertise in oil/gas operations, business management and financing, the company is in a strategic position to find and acquire projects of significant merit and develop these projects to their full potential.
Strategic American Oil is aggressive in its growth seeking projects that will turn a development stage oil and gas exploration company into a mid-tier US oil and gas developer.

PROJECTS

Strategic American Oil has identified and acquired working interests in several projects in Texas, Illinois, and Louisiana and further projects have been identified. The company is currently developing working relationships with well-established oil and gas companies and firmly believes this will reduce its risk and exploration costs, and increase the company’s exposure to new projects, bringing a unique advantage to the company and its shareholders.
ILLINOIS

Strategic American Oil has identified and acquired working interests in several projects in Texas, Illinois, and Louisiana and further projects have been identified. The company is currently developing working relationships with well-established oil and gas companies and firmly believes this will reduce its risk and exploration costs, and increase the company’s exposure to new projects, bringing a unique advantage to the company and its shareholders.Oakdale North, Northeast & DST Prospects —Jefferson County, IL
To date SGCA, operating in Illinois as Penasco Petroleum, Inc., has leased over 1800 acres in the Oakdale and DST prospect areas. Penasco plans to shoot several 2-D seismic lines on currently held leases in conjunction with seismic option agreements in order to confirm subsurface structures. Confirmation of structures will be followed by drilling. Targets range in depth from 2,000’ to 4,000’. Leases acquired to date are primarily 87.5% Net Return Interest.
The Company (Penasco) is also currently leasing a potential waterflood project in Jefferson County. When fully leased, the project will cover 600 acres (m/l).
Additionally, the Company has generated a number of Pinacle Reef prospects. These prospects will be confirmed by 3-D seismic and drilled based on 3D results.

LOUISIANA PRODUCTION

Strategic American Oil has current production in Louisiana. SGCA . SGCA’s Louisiana Holt wells are situated in the Delhi South Field, adjacent to Denbury Resources (NYSE:DNR) recently acquired the Delhi Field ($50 million acquisition). Denbury plans a secondary/tertiary recover project using CO2 injection.

SOUTH DELHI/BIG CREEK FIELD

In 2006, SGCA acquired a 97% working interest and an 81.25% net revenue interest in approximately 136 acres in Franklin Parish, Louisiana (the “Holt Lease”). Additionally, the compant acquired a 100% working interest and an 81.25% net revenue interest in approximately 40 acres in Richland Parish, Louisiana (the “Strahan Lease”)SGCA and owns the remaining 25% working interest.

An independent reserve study completed 8/13/2008 by Aluko & Associates (Austin, TX) shows recoverable reserves of 76,877 Bbls oil net to the Company’s interest.
The Company is currently leasing the Dixon Tract (160ac), adjacent and contiguous to the Holt lease. To date more than 88% or the mineral interests have been leased. Tradestar Resources, Inc. will acquire a 50% working interest from the Company upon completion of leasing and will operate the lease. Current plans are to re-work two previously producing wells on the lease and re-activate an on-site salt water disposal well.

LITTLE MULE CREEK, ALFALFA COUNTY, OKLAHOMA

“The Company, through its wholly owned subsidiary, Penasco Petroleum, Inc., acquired a 4% working interest before payout and a 3% working interest after payout in the 11,000 acre Little Mule Creek project. This field currently produces from 18 vertical wells completed in the Maquoketa (Sylvan Dolomite) formation as well as from the Misener and Mississippian formations. The Operator (Savoy Energy) completed drilling and testing on the R&R Cattle Co. #1-19 well, Sec.19, T29N R12W, Alfalfa Co., OK. The Maquoketa zones failed to produce commercial quantities of oil/gas. Savoy is currently considering a completion attempt up-hole in the Misener Sand (5466?). The Misener had good oil/gas show on logs and produces in the field area. If the proposed Misener completion is unsuccesful, the well will be plugged and abandoned.

TEXAS

Texas produces over 1 billion barrels of oil/gas a year. Historically one of the largest areas of oil in the Western Hemisphere, SGCA is aggressively leasing land and preparing a development plan to increase its production from this strategic state. SGCA operates in Texas as Penasco Petroluem, Inc.

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Disclaimer

Section 17(b) of the Securities Act of 1933 requires that any person that uses the mails to publish, give publicity to, or circulate any publication or communication that describes a security in return for consideration received or to be received directly or indirectly from an issuer, underwriter, or dealer, must fully disclose the type of consideration (i.e. cash, free trading stock, restricted stock, stock options, stock warrants) and the specific amount of the consideration. In connection therewith, EMC has received the following compensation and/or has an agreement to receive in the future certain compensation, as described below:
EMC has been paid $10,000 cash and will receive an additional 49,400 restricted shares from Atrategic American oil and Gas for the preparation and distribution of this report.

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