| ||Mon Aug 30, 2010|
Derek Secures Development Funding For Lak Ranch
| ||Today the Company is pleased to announce a modification to its existing Loan Agreement with the Haegelin Family Trust. This loan has been modified by:|
- increasing the principal debt amount to US$2.5 million from US1.3 million
- extend the repayment term from January 30, 2011 to August 10, 2011 and,
- changes the convertibility feature of the note payable to permit conversion of any or all principal and interest owing at $0.06 per unit, with each unit consisting of one share and one warrant. Each warrant is exercisable at a price of $0.10 for a term of two years from the date of conversion.
This effectively provides the Company with US$1.2 million of new capital to allow the Company to develop its LAK Ranch project by completing the installation, permitting and use of the 50 Million BTU generator. This development will permit the Company, for the first time, to adequately steam the reservoir in both the recently completed12 well program area and the original 1-P horizontal well area. Management forecasts that after six months of such steaming these existing wells should be producing 170 B/D oil. Management budgets that at a $60 WTI oil price, the Company will break even on a project cash flow basis at 150 B/D oil.
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: firstname.lastname@example.org
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
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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