Mr. Tim Hoops reports

STRATA-X ENERGY: RIG MOBILIZATION FOR LINGLE APPRAISAL WELL

Webster Drilling is mobilizing a drilling rig for Strata-X Energy Ltd.'s Kuhlig No. 1 well. Kuhlig No. 1 is a 12-kilometre step-out appraisal well of the Burkett 5-34 horizontal well that reached 300 barrels of oil per day. Strata-X expects the well to be spudded on Sept. 10, 2015, following the Labour Day weekend.

Drilling update

Strata-X Energy has received notice from the drilling contractor, Webster Drilling, that it has begun mobilization of its drilling rig to the Kuhlig No. 1 location, the second well in the company's Lingle oil project. The Kuhlig No. 1 vertical well is a 12-kilometre step-out of the first completed Lingle horizontal well, Burkett 5-34, where peak production rates of 300 barrels of oil per day were achieved. It is anticipated the Kuhlig No. 1 well will be spudded following the USA Labour Day holiday on Sept. 10, 2015.

The Burkett 5-34 was a proof-of-concept well that proved the Lingle can be drilled and completed horizontally and is capable of commercial oil production. Although this first horizontal test accomplished many of the predrill targets, Strata-X expects even better results from the next horizontal well, which will be designed with twice the horizontal leg length and an improved completion method compared with the Burkett 5-34 well.

Kuhlig No. 1 is a low-cost, vertical well that will core and pressure test the Lingle to acquire important reservoir data required to design the proposed Raccoon Creek No. 1 horizontal well. A core will be taken from the bottom of the new Albany shale through the primary reservoir of the Lingle formation. Confirmation of oil saturation, reservoir thickness and porosity will be key data obtained. The pressure test will be instrumental in the design of future horizontal completion methods as Strata-X fine-tunes the approach to optimizing commercial oil production.

The Kuhlig No. 1 is expected to intersect up to 16 feet of the Lingle reservoir and to encounter higher initial reservoir pressure and oil saturations than the Burkett well. It will be drilled a short distance from a historical well that has log data indicating oil saturations in the reservoir. The subsequent Raccoon Creek No. 1 horizontal well will be drilled updip from the Kuhlig No. 1 location and toward the historical well.

The drilling of Raccoon Creek No. 1 is tentatively scheduled for early 2016, subject to financing. Strata-X is investigating hybrid methods to finance future horizontal wells, which may include joint ventures. Strata-X's 100-per-cent ownership of the projects offers flexibility on the later financing options.

Summary of the Lingle oil project

The Lingle oil project is targeting light gravity sweet oil from the Devonian-aged Lingle formation. Estimates of petroleum initially in place under the company's acreage are approximately 240 million barrels (1). It is expected that a recovery factor of at least 10 per cent can be achieved in the Lingle reservoir.

Australian Securities Exchange disclosure Note 5.28.2

The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.

Tim Hoops, the company's president, stated: "The Kuhlig No. 1 and the subsequent Raccoon Creek No. 1 horizontal well are expected to have nearly twice the reservoir thickness, more than twice the horizontal length and have much better reservoir pressure than our pioneering Burkett 5-34 horizontal well. The combination of these favourable factors should provide us with much improved performance and position us for development of this exciting project."

(1) The information in this presentation that relates to prospective resources was originally prepared and published by AWT International dated Dec. 18, 2012. The information was published in Strata-X Energy's prospectus 2013 (available on-line at the company's website), as part of the company's 2013 Australian Securities Exchange initial public offering.

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