Strategic Oil & Gas Ltd. Sets New Production Targets From Accelerated Drilling Program

CALGARY, ALBERTA--(Marketwired - Sept. 2, 2014) - Strategic Oil & Gas Ltd. ("Strategic" or the "Company") (TSX VENTURE:SOG) announces an acceleration to its Muskeg development program and the completion of a U.S. $10 million loan from Bay Resources Partner's Funds and Tom Claugus.

Strategic has drilled four Muskeg wells during the third quarter and is planning to drill six more Muskeg wells during the fourth quarter of 2014, exiting the year at 4,600 boe/d. Production rates are exceeding the Company's type curve and field netbacks in Marlowe are currently over $40/boe. Muskeg Well 11-24 drilled in Q3 2014 has produced 23,000 boe in 45 days at a rate of 511 boe/d. For comparison, Muskeg well 10-24 drilled in Q1 2014 produced 23,600 boe during the first 45 days and has now produced 54,500 boe in 130 days at an average rate of 419 boe/d. The remaining three wells drilled in the third quarter are currently being tied in.

The Company plans to continue executing a continuous one rig drilling program through to the end of 2015, drilling up to 23 wells in 2015 and achieving production growth of approximately 25%. Guidance for 2015 will be provided once the formal budget process has been completed. Capital requirements over and above cash flow from operations of $50-$75 million for the remainder of 2014 and 2015 will be funded from equity, potential increases in credit facilities and sales of non-core assets. The US$10 million loan from Bay Resource Partner's Funds is a short-term interest-bearing bridge loan to enable continuation of the capital program as financing options are evaluated.

Tom Claugus, Strategic's Chairman said: "We are encouraged by the drilling progress at Marlowe and are committed to funding at least our proportionate share of the future equity raises, which is just below 50%. The Marlowe field is a world class asset, and with continued drilling success the infrastructure supports excellent field netbacks and project returns."

The Company also announces the issuance of 6,500,000 stock options to directors, officers and employees. Each option entitles the holder to acquire one common share of the Company for a period of five years at a price of $0.42 per share. These options are issued in accordance with the Company's incentive stock option plan.

ABOUT STRATEGIC

Strategic is a junior oil and gas company with a dominant land position of 500,000 acres in Canada. The Company is committed to building a premier oil producer through its high-quality, concentrated reserve base, and constructing an operated integrated sales infrastructure to support the Company's significant future growth. Strategic's common shares trade on the TSX Venture Exchange under the symbol SOG.