Strategic Oil & Gas Ltd. Announces 2013 Capital Budget and Executive Appointments

CALGARY, ALBERTA--(Marketwire - Jan. 21, 2013) - Strategic Oil & Gas Ltd. ("Strategic" or the "Company") (TSX VENTURE:SOG) is pleased to announce that it has approved a 2013 capital budget of $75 million. The Company will continue to build on its success and dominant position at Steen River. The 2013 capital budget includes drilling 20 gross (18.8 net) wells, 18 gross (18 net) of which will be at Steen River targeting proven light oil producing horizons. The Company has planned for 2 gross (0.8 net) wells being drilled in its non-operated Maxhamish area. Approximately 80% of the total capital budget will be spent on drilling, completion and workover related activities with the balance of $15 million of funds directed to infrastructure development at Steen to facilitate future production increases.

Strategic expects to average 4,000 BOED (93% light oil) of production, representing an 80% increase over the 2012 estimated average production rates. Operating costs are expected to average $15.30 per BOE for 2013, representing a 25% reduction from 2012 estimated costs. Transportation and quality adjustments from West Texas Intermediate pricing are expected to be $15.54/boe. G&A and interest expenses are expected to average $6.66 in 2013, down from $8.35/boe in 2012.

Funds from operations are projected to grow in excess of 100% to approximately $49 million in 2013. The Company expects to fund this capital budget through a combination of cash flow and debt financing through its recently implemented $100 million bank facilities.

Subsequent to the preparation of the budget, the Company has entered into financial hedges for slightly more than 500,000 barrels of oil at an average price of $95/bbl WTI in order to provide greater certainty for the funds from operations.

EXECUTIVE APPOINTMENTS

Strategic announces the appointment of Aaron Thompson as its Chief Financial Officer. Mr. Thompson, a Chartered Accountant, brings over 12 years of senior management experience in the North American energy industry from a number of public oil and gas companies which include Perpetual Energy Inc., Paramount Resources Ltd., Summit Resources Ltd., and Apache Canada Corp. where he held various senior accounting and controller positions. His abilities to motivate people and work effectively in a team environment, promoting closer links between accounting, land and production personnel are seen as a valuable asset to Strategic's continued success. Mr. Thompson graduated in 1996 from the University of Lethbridge with a Bachelor of Management Degree and is a member of the Canadian and Alberta Institutes of Chartered Accountants.

Strategic also announces the appointment of Cody Smith as its Vice President, Operations. Mr. Smith worked the last 25 years of his professional career with pre-merger company AEC and then Encana Corporation. Mr. Smith led teams in Drilling, Completions, Facilities, Production Engineering and Operations and Safety in British Columbia and Alberta. For the last 5 years Mr. Smith held Team Lead positions in the Ft Nelson, Canadian Deep Basin, Cutbank and Bighorn Business Units. He was involved during new play development in the Jean Marie, Horn River, Montney, Alberta Cretaceous stacked plays, and Duvernay. His experience includes liquids rich gas, water, gas storage and heavy oil and participating in internal technical completions and water exchanges for Encana across North America. Mr. Smith has an Honours Diploma in Petroleum Technology from Southern Alberta Institute of Technology.

ABOUT STRATEGIC

Strategic is a well-capitalized junior oil and gas company committed to growth by exploiting its light oil assets in Canada. Strategic is primarily focused on implementing development plans for its light oil properties, while continuing to review other high impact light oil resource plays. Strategic's common shares trade on the TSX Venture Exchange under the symbol SOG.

ADDITIONAL INFORMATION

Additional information, including the Company's most recently filed AIF, is also available at www.sogoil.com and at www.sedar.com.

Forward-Looking Statements

This news release includes certain information, with management's assessment of Strategic's future plans and operations, and contains forward-looking statements which may include some or all of the following: (i) forecasted capital expenditures and plans; (ii) exploration, drilling and development plans, (iii) prospects and drilling inventory and locations; (iv) anticipated production rates; (v) expected royalty rate; (vi) anticipated operating and service costs; (vii) the Company's financial strength; (viii) incremental development opportunities; (ix) reserve life index; (x) total shareholder return; (xi) growth prospects; and (xii) sources of funding, including an increased debt facility, which are provided to allow investors to better understand the Company's business. By their nature, forward-looking statements are subject to numerous risks and uncertainties; some of which are beyond Strategic's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, changes in environmental tax and royalty legislation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, and other risks and uncertainties described under the heading 'Risk Factors' and elsewhere in the Company's Annual Information Form for the year ended December 31, 2011 and other documents filed with Canadian provincial securities authorities and are available to the public at www.sedar.com. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The principal assumptions Strategic has made includes security of land interests; drilling cost stability; royalty rate stability; oil and gas prices to remain in their current range; finance and debt markets continuing to be receptive to financing the Company and industry standard rates of geologic and operational success. Strategic's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements or if any of them do so, what benefits that Strategic will derive there from. Strategic disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

BOE Presentation: Barrel ("bbl") of oil equivalent ("Boe") amounts may be misleading especially if used in isolation. All Boe amounts in this press release are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6mcf = 1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalence at the well head.