| ||Wed Oct 13, 2010|
Derek Secures Development Funding For Lak Ranch
| ||Further to the Company's news release of August 30, 2010, the Company wishes to provide the following clarifications to the previously announced convertible debt funding agreement amendments:|
- repayment of the principal debt amount of US1.0 million currently due February 1, 2011 has been extended to September 30, 2011. In consideration for this extension the terms of conversion of any or part of the principal amount are to be amended to $0.10 per unit, with each unit consisting of one share and one share purchase warrant. The share purchase warrant shall entitle the holder to purchase a further common share at a price of $0.12 per share for a term of a further year expiring September 30, 2012. The debt was previously convertible into shares at $0.10 per share,
- any interest accrued and owing at the conversion date would be a separate debt settlement, subject to regulatory approval and settlement would be at a price consistent with the then market price and the regulations of the TSX.V exchange.
- the US$1.5 million funding subsequent to the initial US$1.0 million debt funding shall now be completed as a private placement. The terms of the private placement will be a unit at $0.05 per unit, each unit consisting of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase a further common share at a price of $0.10 per share for a period of 12 months and at a price of $0.12 per share for a subsequent 12 month period.
These amended agreements are subject to regulatory approval.
This effectively provides the Company with 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.
ON BEHALF OF THE BOARD
Mr. Barry C.J. Ehrl,
President and C.E.O.
Corporate E-Mail: email@example.com
For further information please contact Derek's Corporate Communications Department at:
Telephone: 1-888-756-0066 or (604)-331-1757
"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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