Strategic Oil & Gas Ltd. provided update on its first quarter 2013 drilling program. During 2012, Strategic undertook to expand its land holdings at Steen. Strategic was very successful, acquiring approximately 100,000 hectares at an average cost of $16 per hectare, well below the 2012 Alberta average cost of $360 per hectare. The company's undeveloped land position has now grown to 155,984 net hectares. Keg river: In late 2012 the company drilled two vertical keg river wells, 02/11-28 was drilled into the existing keg river pool and 02-13 as a step out well to test a potential new keg river structure. The well 02/11-28, producing at an oil rate of over 200 Boe/d is outperforming the keg river type curve. Vertical step out well 02-13 resulted in a new keg river pool discovery on the eastern side of the rim. The vertical well has intersected a lower permeability keg river reservoir which has been mapped to extend over 5 square km with estimated original oil in place of 40 million barrels. The vertical well is currently producing at 50 Boe/d. This new keg river pool will be an ideal candidate for horizontal development. In 2013, the company drilled 3 step out vertical wells at Steen River. Two of the three vertical wells were targeting new pools with the third well extending an existing keg river pool. All three wells have been cased with promising shows while drilling and on logs. The three wells are currently being flow tested to a temporary battery and are expected to be tied in during March. Muskeg Stack: the company completed its first multistage frac well 03/12-18 into the muskeg formation in the fourth quarter of 2012. Due to limited fluid handling capability at the West Marlowe field, the horizontal well has been flowing into a pipeline against a back pressure of 4000-5000 kpa, which limits the drawdown on the well. The well is currently producing 180 Boed (45% light oil) with limited drawdown. Strategic is planning to tie the well into the newly acquired facility and optimize the drawdown in March 2013. In 2013, the company drilled a muskeg stack horizontal well 14-18, following up on the success of the horizontal well 03/12-18. A second muskeg horizontal well is currently underway from the same pad and completion operations will commence on both wells once the second drilling operation is completed. In order to prove up the muskeg stack fairway, Strategic completed a vertical well 07-28 in the muskeg stack. This well is located approximately 15 km east of the first muskeg stack horizontal well. This well is currently producing at 75 Boe/d. A third muskeg stack horizontal well has been spudded at 13-28, keying off of a successful vertical test of the Muskeg Stack in that region of the field. Strategic will be tying in the three new muskeg stack horizontal wells in March 2012. The company's current corporate production is 3,100 Boe/d (91% oil). The current production does not include any new production from the wells drilled to date in 2013. The new wells will be tied into the company's facility at Steen River starting in March 2013. Approximately 50% of the company's current light oil production is transported by rail. The rail option gives Strategic exposure to Brent and WTI pricing for its crude.

The company reaffirmed its earlier production guidance of an average of 4,000 Boe/d for the year 2013.