Strategic Oil & Gas Ltd. provides a production and operations update relating to Maxhamish and its recently acquired Steen River Property. As of February 8, 2011, Strategic's production exceeds 900 boe/d (70% oil). In addition, 200 boe/d are expected to be added in the month of February following a successful ongoing workover campaign at Steen River.

At Maxhamish, operations are focused on achieving year round access to our properties by March with a 2011 drilling campaign of 4 multi frac horizontal wells. Current plans include drilling and completing one well before breakup with 3 wells following breakup.

Steen River Light Oil Asset As previously announced on December 22, 2010, Strategic completed the Acquisition (the "Acquisition") of the shares of a private company, Steen River Oil & Gas Ltd ("Steen"), for approximately $10.5 million in cash and share consideration plus the assumption of $3.5 million in debt for an enterprise value of $14.0 million. Through the Acquisition, Strategic acquired high quality, light oil assets at a low cost in addition to acquiring a substantial land base and facilities focused in northwest Alberta ("Steen River"). The primary asset is a 100% owned and operated light oil field producing from the Keg River zone. The property includes 110 sections of undeveloped land, oil and natural gas facilities and other infrastructure. This acquisition provides Strategic with two large light oil resource plays in western Canada.

Key Acquisition Metrics of the Acquisition Production: 650 boe/d ($22,000 per flowing bbl (1)) Land: 170 net sections (110 net undeveloped) Facility: Capacity: 2000 bbl/d oil and 35 MMcf/d natural gas Tax Pools: Excess of $100 million, including $50 million in non-capital losses, $20 million UCC, $20 million CEE

As previously announced, prior to the acquisition a major part of Steen River production was shut in due to a pipeline break. Strategic is pleased to report that pipeline repair commenced in early December and was completed in the third week of January, 2011. These wells have been producing at an average rate in excess of 650 boe/d. This takes Strategic's overall production to over 900 boe/d (70% oil). Further, the ongoing workover campaign at Steen River is expected to add 200 boe/d of producing volumes in the month of February, 2011.

Strategic's 2011 capital program includes constructing year round access, shooting an extensive 3D seismic program to delineate and develop the existing Keg River oil pools, construct all year road access, drill up to 5 additional Keg River Oil wells and exploit Keg River, Slave Point and other oil and gas bearing zones at Steen River. Keg River vertical wells typically produce with initial rates of 200 to 400 bop/d per well and provide solid economics with drilling costs of $1.5 million per well.

"We are pleased to be able to complete the low cost acquisition of Steen and subsequently achieve the start-up of the pipeline within a short time. The incremental production reinforces our belief in our technical team's evaluation of Steen River as an exciting growth area with tremendous upside for the Corporation." said Arn Schoch, President and CEO of the Corporation.

Maxhamish Light Oil Resource Play Strategic and its partner have currently commenced the 2011 development program. The program includes building an all weather road to allow development of the Maxhamish property to occur year round and constructing an oil battery to remove current production handling constraints. In addition, up to 4 horizontal wells will be drilled, then completed with multi-stage fracs and tied-in.

"We remain highly optimistic on the future potential of the Maxhamish property, based on the initial encouraging results from the 2010 drilling program. The current road construction project to turn the Maxhamish area into an all year round operation is crucial to a future accelerated development program at Maxhamish." said Arn Schoch, President and CEO of the Corporation.

Tags: Strategic Oil & Gas Ltd.