Strategic Oil & Gas Ltd. announced its second half 2016 drilling program and capital spending budget. Drilling program marks the beginning of pad development activity along the drilling corridor at west Marlowe, following the company's successful delineation drilling program during first quarter of 2016. The plan includes four horizontal Muskeg wells, all weather roads, pipelines and a plant turnaround. The first four well pad is approximately 3 kilometers from the existing wells at West Marlowe, moving toward the Muskeg horizontal well 1435 which was drilled and tested in the first quarter of 2016. The well 1435 tested at a rate of 1,060 boe /day over the last 48 hours of a nine day production test. The company expects to achieve further drilling efficiencies with longer horizontal wells using a larger drilling rig, and intends to complete up to an additional five stages per well to increase production performance. Construction activities to the new pad have begun and drilling activities are scheduled to commence in July 2016. The company's focus on cost cutting efforts in both the field and office continued in the second quarter of 2016. Lower operating and general and administrative costs, in combination with the recent increase in oil prices are leading to positive corporate cash flows during the second quarter. Production volumes from existing Muskeg wells at west Marlowe have continued to meet or exceed the Company's internal type curve. Current corporate production is approximately 1,800 boe/day with an annual decline rate of 25%. Including projected additions from the four new Muskeg wells, Strategic expects to exit 2016 with a production rate of 2,800 boe/day. The announced program is the first step towards exploitation of the delineated, high-impact development corridor at west Marlowe. The company anticipates continuing to drill along this corridor and executing its growth strategy in 2017.