Strategic American Oil, www.strategicamericanoil.com – a growth stage oil and gas firm with working interests in a variety of projects throughout Texas, Illinois and Louisiana, reported closing of the Galveston Bay Energy, LLC (GBE) purchase today.
CEO of SGCA, Jeremy G. Driver, called it a seminal event for the Company, which will provide a solid financial and operational foundation for growth and cash flow targets.
The Texas Gulf Coast is home to the GBE properties, which consist of five rich fields spanning roughly 24.6k gross acres (23k net). GBE handles 100% of the production operations and maintains roughly an 85% working interest in essentially all of its producing properties.
An excellent move by SGCA as the $9.9M cash purchase price works out to an imputed cost of proved producing reserves to $0.46 per Mcfe (1k cubic feet equivalent), or just $2.75 per barrel of oil equivalent (BOE).
Production output at GBE averaged 378 BOE per day (2.3M cubic feet of gas equivalent per day) for the five-month period ending Dec. 31, 2010
Driver highlighted the winning characteristics of the transaction, explaining that it would be immediately accretive to cash flow, production and reserves on a per share basis.
Shareholders can look forward to steadily accruing value growth as the Company now has an extremely well developed portfolio of projects in centered around one of North America’s key producing hydrocarbon basins.
This all comes at a time when the future of energy, especially oil and natural gas, looks incredibly positive; global demand is skyrocketing while new discoveries and reserves dwindle, amid a mounting commodities market that puts further strains on energy consumption throughout the entire structure of the economy.
A planned program for 2011, devised by the Company, will focus on low risk development projects with abundant potential and workover projects. In addition SGCA will be tackling the promising subject of further exploration opportunities aimed at discovery of even deeper pools than what is identified in extant engineering data.
It looks like 2011 is shaping up to be a productive year for SGCA and this is also good news for domestic energy concerns/consumers, as the Company stands to deliver handsomely on its reputation for having one of the best geology, engineering and executive teams in the industry who are expert at employing proven exploration methods like 3d seismic analysis and others.