Strategic American Oil Corp. started water injection in Jefferson and Wayne Counties in Illinois.

Injection into the V. Pepple No. 1 well marks the beginning of the pilot phase of Strategic’s Markham City north waterflood project. As injection continues, surrounding production wells will be monitored as the injection water begins to mobilize the oil and re-pressure the reservoir. Results from the pilot phase will determine further waterflood development plans for the entire field.

The Markham City North field produced 1,381,300 barrels of oil during the primary phase of production from 1943-2009. Management believes significantly more oil remains in the reservoir, which can be recovered by waterflooding. Nearby waterflood projects were successful with some having a secondary-to-primary recovery ratio of one-to-one, which means this project may yield potential gross recoverable reserves in excess of one million barrels of oil.

The Markham City North field was farmed-out to and is currently operated by Core Minerals Operating Co. Inc. Strategic retained a 10% carried working interest. Upon cost recovery by Core of its initial investment, Strategic will back-in for an additional 15% working interest.