April 16, 2010 (FinancialWire) — Strategic American Oil Corp. (OTCBB: SGCA) has completed reworking of the Dixon No. 1 well on the company's 160-acre Dixon lease located in Franklin Parish, LA and is achieving initial oil production.

The company also plans to rework the Dixon No. 2 well as soon as weather and ground conditions allow. The Dixon salt water disposal well has also been reworked, including upgrading of pump, flow lines, and state inspection. In addition to the Dixon No. 1 and 2 wells, there are two possible offset drilling locations and potential for deeper targets.

Once the Dixon No. 2 well is reworked and producing, the company will obtain an independent engineering report stating proven developed producing reserves and net present value . In addition, plans for the Louisiana fields include continuing to develop the shallow intervals while exploring the potential of deeper zones. The current focus of Strategic American Oil's Louisiana development is acquiring leases with existing, low-producing wells at minimum cost and reworking them to produce at maximum potential. This method builds revenue through production and increases the company's core reserves at a fraction of the cost of purchasing established production.

Denbury Resources (NYSE: DNR) acquired the Delhi Field ($50 million acquisition) adjacent to Strategic American Oil's leases. Denbury is developing a secondary/tertiary recovery project using CO2 injection and has completed a ~300-mile CO2 pipeline from Mississippi to the Delhi Field and has begun injection and oil recovery (~200 BOPD) from a portion of the Delhi Field.

Strategic American Oil feels significant potential exists for deeper zones in the area of the company's current leases. Denbury Resources recently completed a proprietary 3D seismic shoot covering the Delhi Field area and has been actively leasing deeper rights. Clayton Williams company is drilling deep Cotton Valley tests (17,500 feet) to the Southwest (on trend) in Ouachita Parish. The Monroe uplift and several recently discovered salt domes just to the south of the Dixon lease may bring these deeper targets much closer to the surface.

In order to evaluate the deeper horizons, as well as possibly expanding current Tuscaloosa sand zones, the company will seek to complete a 3D seismic shoot in the near future.

The company has identified numerous existing, low-producing oil well projects that fit its model of development and is in the process of negotiating leases for these projects.

Strategic American Oil Corp. (OTCBB: SGCA) is an exploration and development company with operations in Texas, Louisiana and Illinois. Its objective is to find and acquire oil and gas projects of merit and develop those projects to their full potential.

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