Strategic American Oil Reports Third Quarter 2011 Financial Results
21 June 2011 - 2:30PM
Strategic American Oil Corp. (OTCBB:SGCA) today announced results
for the third quarter of 2011.
Revenue and Production
Revenue for the third quarter totaled $1.26 million as compared
with $0.12 million for the third quarter of 2010.
Production volumes in the third quarter were 12.3 MBbls of
oil and 13.8 MMcf of natural gas, or 14.5 MBoe. This compares
with 1.6 MBbls of oil and 3.5 MMcf of natural gas, or 2.2 MBoe for
the third quarter of 2010. In the third quarter of 2011, the
average sales price per barrel of oil
was $98.03 and $4.03 per MMBtu for natural gas,
as compared with $66.67 per barrel
and $4.99 per MMBtu, respectively for the third quarter
of 2010. The primary reason behind the increase in revenue is the
additional production from the newly acquired Galveston Bay Energy,
LLC ("GBE"). Oil prices increased 47% and gas prices decreased 19%
from 2010 levels. During 2011, oil accounted for 84% of the
production volumes and 95% of the revenue.
Costs and Expenses
Total lease operating expense for the third quarter
totaled $0.65 million versus $0.11 million for
the third quarter of 2010. The $0.55 million increase
reflects the newly acquired assets of GBE. Cash G&A
expense totaled $0.61 million for the third quarter of
2011 versus $1.09 million for the third quarter of 2010.
The $0.48 million decrease reflects a continued focus on
cost controls while still growing production.
Earnings
Net loss totaled $8.5 million for the third quarter of
2011 and $2.4 million for the third quarter of
2010. Net loss per share, both basic and fully diluted, for
the quarter was $0.05, based on 162.6 million weighted
average shares outstanding as compared with a loss
of $0.05 per share in the third quarter of 2010 with 49.5
million weighted average shares outstanding. The increased
outstanding common shares are associated with the private placement
of common stock completed to fund the acquisition of GBE.
Liquidity and Capital Plans
Liquidity
As of the end of the quarter, we had $4.7 million in
available cash, which included $0.55 million in cash on hand and
$4.2 million in available credit from our $5 million bank line. The
revolving bank line is partially drawn at $0.86
million with a maturity of March of 2012. We also
had $6.7 million in restricted cash as collateral
for P&A bonds.
2011 Operational Update
During the remainder of 2011, we anticipate continuing our plan
to increase Galveston Bay production through well workovers,
recompletions, and infrastructure improvements. Additionally, we
expect to begin our first waterflood in Illinois in the coming
weeks, recompletion of Welder No. 5 in late summer, and drilling
plans have already commenced to exploit 3-D seismic targets in
Galveston Bay. Total capital anticipated for remainder of
calendar 2011 on currently-owned properties will be
approximately $2 million.
Jeremy G. Driver, President and Chief Executive Officer
stated, "Since completing our recent acquisition we are now in a
better financial position and anticipate implementing our
aggressive growth strategy which will include further acquisitions,
increased production from existing fields, new waterflood projects,
a more extensive drilling program and a new investor awareness
campaign."
Mr. Driver went on to say, "My family and I have made
significant investments into Strategic American Oil with a strong
belief in the opportunity for continued growth. We are committed to
helping the company achieve its objectives and deliver stellar
returns for all shareholders."
About Strategic American Oil
Strategic American Oil Corporation (OTCBB:SGCA) is a growth
stage oil and natural gas exploration and production company with
operations in Texas, Louisiana, and Illinois. The Company's team of
geologists, engineers, and executives leverage 3D seismic data and
other proven exploration and production technologies to locate and
produce oil and natural gas in new and under-explored areas. The
Company seeks accretive acquisitions of production, reserves, or
other companies that will provide significant growth potential.
Further information can be found on the Company's website at
www.strategicamericanoil.com.
Safe Harbor Statements
Except for the statements of historical fact contained herein,
the information presented in this news release constitutes
"forward-looking statements" as such term is used in applicable
United States and Canadian laws. These statements relate to
analyses and other information that are based on forecasts of
future results, estimates of amounts not yet determinable and
assumptions of management. Any other statements that express
or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or
phrases such as "expects" or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans, "estimates" or
"intends", or stating that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved) are not statements of historical fact and should be
viewed as "forward-looking statements". Such forward looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such risks and other factors
include, among others, the actual results of exploration
activities, variations in the underlying assumptions associated
with the estimation or realization of mineral resources, the
availability of capital to fund programs and the resulting dilution
caused by the raising of capital through the sale of shares,
accidents, labor disputes and other risks of the mining industry
including, without limitation, those associated with the
environment, delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction
activities, title disputes or claims limitations on insurance
coverage. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will
prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements contained in this news release and in
any document referred to in this news release.
CONTACT: Corporate Offices:
800 Gessner, Suite 200
Houston, Texas 77024
www.strategicamericanoil.com
Investor Relations:
Investor Awareness, Inc.
Tony Schor or James Foy
847-945-2222
www.InvestorAwareness.com