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| | Fri Nov 28, 2008
Minor Bridge Loan Arranged
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| | Derek Oil & Gas Corporation announces that it has secured a loan of $205,000USD to aid in paying for the recent transport to site of two 50 Million BTU generators. The loan is secured by a promissory note payable in 12 months and bears interest at 9% per annum. The note holder has the option to convert the principal into shares of the Company at a conversion rate of $0.10Cdn per unit at any time during the term of the loan. Each Unit shall consist of one common share and one common share purchase warrant. Each warrant is convertible into a further common share at and exercise price of $0.20Cdn for a period of two years from the date of the advancement of the loan funds. The note and loan agreement are subject to regulatory approval.
These generators will give the Company's current steam generating capacity a six-fold increase. Mr. Robert Hurkmans, the Company's Chief Operating Officer and steam recovery expert, has previously identified the lack of steam capacity as the main factor for the lack of production response from the Company's pilot wells drilled in 2007.
Mr. Hurkmans goes on to say "We expect to increase production from our 2007 pilot within six months of commencement of steaming from 10 barrels of oil per day cold production to 50 barrels per day after the steam generator project completion followed by steam soaking nine producers and implementing our three updip steam drive injector configuration. The production rate will continue to increase to 150 barrels per day in about a year from gravity drainage effects."
The Company's current 25 MM Btu/hr generator, which is over 40 years old, will be made portable and utilized for steam soaking wells beyond our pilot and currently designated steam drive/soak project area.
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 prolific 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.
For further information please contact Derek's Corporate Communications Department at:
Telephone: 1-888-756-0066 or (604)-331-1757
Corporate E-Mail: info@derekoilandgas.com
Website: http://www.derekoilandgas.com
The TSX Venture Exchange has neither approved nor disapproved the information contained herein. This document includes forward- looking statements. Forward-looking statements include, but are not limited to, the continued advancement of Derek Oil & Gas Corporation'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. |
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