• Extensive new developments on the LAK Ranch project located in the prolific Powder River Basin of NE Wyoming
• A private placement put in motion to be used for general working capital and to ensure Derek's financial obligations are met for future developments on the LAK Ranch project
• An expansion of Derek's corporate communications program put in place

The Company has been working diligently on increasing our shareholders value by strengthening our JV partnership and placing a direct focus on the development of the LAK Ranch project. Derek intends to demonstrate the potential for commercial production of the high quality oil that exists in-situ in the reservoir. "We are not looking for oil ladies and gentlemen. We have oil". How much oil can be recovered? And what is the most economically viable enhanced oil recovery method suited to the reservoir? The upcoming Continuous Steaming Program is expected to provide us with a more concise answer to these questions.

OPERATIONS PROGRESS:

Complete:  1 Million USD 3-D seismic survey shallow interpretation  Determined next phase commitment to the project  Selected & agreed upon three upcoming vertical injector well locations  Clearance from surface owner  Applications to drill steam injection wells submitted to the WOGC  Located drilling rig & scheduled drill date  Completed drilling of three vertical steam injection wells  Installed steam lines & casings  Pressure tested new steam line runs  Completed insulation on steam lines and new vertical wells

Current:

• 3D seismic data continues to be interpreted and is being used for current and future developments on the LAK Ranch project
• Confirming potential for deeper targets observed during 3D seismic interpretation
• Steam testing the recently completed vertical injector wells
• Monitoring new developments to improve the economics of the enhanced oil recovery method

• Commence Continuous Steaming Program on LAK Ranch
• Monitor & optimize Continuous Steaming Program
• Anticipation of an increase in oil production through continuous steam injection using vertical wells and production from existing horizontal well
• Derek Board of Directors meeting is scheduled for Nov. 8th 2005 to discuss further development and strategic plans for the LAK Ranch project
• Participants in the Calgary Financial Forum, November 17-20, 2005

September Stock Talk:
Shares Issued & Outstanding: 35,261,628

TSX.V : DRK (CDN) Monthly Volume: 3,636,755 Month High: $0.63 Month Low: $0.45

OTC BB : DRKOF (USD) Monthly Volume: 953,466 Month High: $0.56 Month Low: $0.33

DEREK'S MANAGEMENT FOCUS-2005:

To increase shareholder value by:

• Supporting its project partner and their exceptional technical expertise with enhanced oil recovery methods
• Facilitating the interpretation of the historical data and acquired 3-D seismic reservoir data for the development of an effective drilling program and comprehensive reservoir simulation model
• Working with its project partner to determine the most cost effective plan to produce significant amounts of the high quality oil that is currently in-situ in the LAK Ranch reservoir
• Working with its project partner to ensure that the highest possible price is received for LAK crude oil production
• Acquisition of land for exploration and development is ongoing

CORPORATE COMMUNICATIONS:

• Derek management is focused on developing strong communications with its current and potential shareholders while effectively executing their short and long term targets
• Investment Strategy Analyst, Dr. Michael Berry has joined forces with Derek Oil & Gas Corporation to provide better US exposure on Derek's current and future investment opportunities
• We are pleased to inform you that the Company has agreed to a non-brokered private placement of up to 4,000,000 units at a price of $0.50 per unit. Each unit will consist of one common share and one half share purchase warrant, with each full warrant exercisable into a further common share of the Company at a price of $0.70 for two years from closing. For more details click on the following link:http://www.derekoilandgas.com/s/NewsReleases.asp?ReportID=119600&_Type=News-Releases&_Title=Derek-Announces-2000000-Non-Brokered-Private-Placement
• A newly-updated flash presentation & streamlined corporate package including the new developments is available for mailing and emailing to current & future shareholders; Feel free to contact Ms. Erica Bearss, VP Corporate Communications at the Derek office for any immediate follow up on the Company's progress or for complimentary corporate material
• Our Corporate Communications team has recently returned from successful meetings in NYC and Boston and the Chicago Natural Resource and Technology Conference
• Please visit www.sedar.com to view all of Derek's publicly-filed documents

In closing, Derek is very pleased to announce that all of its targets for the month of September have been met and more. Our focus for this upcoming month is to commence and monitor the continuous steaming stage of the project. Our expectation for the three vertical steam injection wells is to increase the levels of oil production during this highly profitable time in the oil & gas sector and prove the economic viability of the project. The ongoing interpretation of the 3D seismic survey may confirm the possibility for oil potential in deeper targets that have been observed.

On behalf of the management team at Derek Oil & Gas Corporation we would like to thank all of our current and future shareholders for their continued support and interest in Derek Oil & Gas Corporation. We assure you that Derek management is determined and focused on significantly increasing levels of production by the end of this year.

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