Published: 14:30 08.11.2006 GMT+1 /HUGIN /Source: Derek Oil & Gas Corporation /SWX: DRK /ISIN: CA24981Q1054
Derek Oil & Gas Corporation Commits to a Thirteen Well Drill Program
VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 11/08/06 -- Derek
Oil & Gas Corporation ("Derek") (TSX VENTURE: DRK) reports its
intention to begin a 13 well development program by the end of 2006.
This vertical well program will consist of a pattern of four injector
and nine producer wells targeted to produce from the Newcastle
sandstone formation. Derek's geological/geophysical consultants
selected the well placements based on interpretations and targets
identified in the US$1.1 million 3D seismic completed over 4.5 square
miles of the property. Within the program area, the pay zone is
estimated to be 40 to 70 feet thick. Budgeted costs of the program
are estimated to be US two million five hundred thousand dollars
(US$2.5 Million). The current pilot phase production is approximately
45-60 barrels of oil per day (bopd), from one horizontal well, and
the Company expects that within a year of commencement of steaming
into the 13 well program area we will produce approximately 550 bopd.
This program will be conducted jointly with SEC Oil and Gas
Partnership ("SEC") on a fifty-fifty cost basis, with SEC receiving
fifty percent of the revenue until payback of their initial
investment. Once payback is met SEC's revenue interest will revert to
forty percent. As part of the participation agreement SEC will
receive 1,000,000 Derek share purchase warrants, exercisable at $0.75
for nine months after completion of the 13 well program, and
exercisable at $1.00 for the next 12 months.
To oversee this program the Company has retained the combined
consulting services of Pacific Geotechnical Associates Inc.
(Bakersfield, CA), SI International Inc. (Denver, CO Office) and
Peterson Energy Management, Inc. (Loveland, CO). These consulting
firms will combine to deliver extensive expertise in all aspects of
heavy oil project management, development and production to Derek's
LAK Ranch Project.
Further to Derek's news release of October 25, 2006, Derek
anticipates closing the purchase of Ivanhoe Energy's interest in the
LAK Ranch Project on December 1, 2006.
Derek Oil & Gas Corporation is a Canadian based, publicly traded oil
exploration, development and production company that utilizes
enhanced oil recovery (EOR) techniques to develop new production from
reservoirs in North America. Derek's current focus is on the further
development and increasing production from their prime property
located in NE Wyoming's Powder River Basin.
Derek Oil & Gas Corporation is trading in Canada on the TSX Venture
Exchange with the symbol DRK.
ON BEHALF OF THE BOARD
Mr. Barry C.J. Ehrl, President and C.E.O.
This document includes forward- looking statements. Forward-looking
statements include, but are not limited to, the continued advancement
of Derek Oil and Gas's LAK Ranch project. When used in this document,
the words "potential", "plan", "could", "estimate", "expect",
"intend", "may", "should", and similar expressions are intended to be
among the statements that identify forward-looking statements.
Although Derek believes that their expectations reflected in these
forward-looking statements are reasonable, such statements involve
risks and uncertainties and no assurance can be given that actual
results will be consistent with these forward-looking statements.
Important factors that could cause actual results to differ from
these forward-looking statements include the potential that Derek's
LAK Ranch project will experience technological and mechanical
problems, geological conditions in the reservoir may not result in
commercial levels of oil and gas production, and other risks.
The TSX Venture Exchange has neither approved nor disapproved the
information contained herein.
Contacts:
Derek Oil & Gas Corporation
Corporate Communications Department
1-888-756-0066 or (604)-331-1757
Corporate Email: info@derekoilandgas.com
Corporate Communications Email: erica@derekoilandgas.com
Website: www.derekoilandgas.com
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