The test well will be located on the 1,043-net acre mineral lease obtained by Strategic American Oil in 2009. The Frio Sand targets in Texas were identified through its acquired 303 square mile 3D seismic database.

The company believes that the multiple Frio sands identified in the seismic profile could contain substantial gas and condensate, and proposes to drill one to two wells to test the Frio zones. The target depth is approximately 13,800ft.

Strategic American Oil will assign operatorship to Chinn Exploration, a fully-licensed and bonded Texas oil and gas operator.

Chinn Exploration was assigned 81.25% of the working interest in return for paying all drilling costs, estimated at $3m, and will pay $200,000 to Strategic American Oil for leasing, land and geophysical work.