2010-10-13-2010-10-07-2010-10-07

Acquired 81.25% WI in TX JV in exchange for paying drilling costs on 1,043 acres targeting Frio sand.

Strategic American Oil Corp., Corpus Christi, Texas, (OTCBB: SGCA) has entered a joint venture with Longview, Texas-based Chinn Exploration Co. to accelerate the drilling of Strategic American's 3-D seismic prospect in Kenedy County, Texas.

Chinn Exploration has been given operatorship and was assigned 81.25% working interest in return for paying all drilling costs, estimated at $3 million, and will pay $200,000 to Strategic American for leasing, land and geophysical work. When the well is completed, Strategic American Oil will pay its share of the completion costs.

Preparations for drilling of the first test well have already begun. The test well will be on the 1,043-net-acre mineral lease obtained by Strategic American in 2009. The Frio Sand targets in South Texas were identified through its acquired 303 square-mile 3-D seismic database.

Strategic American's exploration team believes the multiple Frio sands identified in the seismic profile could contain substantial gas and condensate, and proposes to drill one to two wells to test the Frio zones. The target depth is approximately 13,800 feet.

Strategic American president and chief executive Jeremy Driver says, "With our new partners we are looking forward to commencing our first test well into what we believe is a very attractive 3-D seismic prospect. The sheer size of the structures and the multiple plays identified makes this prospect very worthwhile."