| ||Wed Feb 23, 2011|
Lak Ranch Operational Update
| ||The Company is pleased to report that it was able to complete three shipments of oil this month due to the increased steaming allowed by the refitted generator. |
Currently the generator is being run at a rate of 2,240 barrels of steam per day. This is almost a three-fold increase over the old 25 MM BTU generator that had a maximum capacity of 800 barrels of steam per day. This enables the Company, for the first time, to adequately steam the existing vertical wells to produce from the reservoir. The Company anticipates increased production responses from the vertical wells as steaming continues.
Mr. Robert Hurkmans, the Company's COO and steam recovery expert, had previously identified the lack of steam capacity as the main factor for the lack of production response.
Mr. Hurkmans plans to steam into the reservoir until an ideal reservoir pressure and temperature are achieved, and then start pumping the Company's one horizontal and 8 vertical wells. Management currently estimates this production to start in late spring 2011.
Mr. Hurkmans has over 37 years' experience in the oil industry and specializes in improving the economics of tertiary recovery projects (with an emphasis on steam flood technology) such as Derek's LAK Ranch project. In past projects for major oil companies such as Occidental, Arco and Shell, Mr. Hurkmans has reduced drilling costs and overall operating costs by up to 30%. He has won the ARCO Award for his work at Midway Sunset, the Shell Oil Company Award for his work at Kernridge/McKittrick and was a finalist for the Occidental Engineering Excellence Award in both 2001 and 2003 for his work at Elk Hills.
Derek Oil & Gas Corporation is a Canadian based, publicly traded oil exploration 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: 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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