| | THIS IS NOT A NEWS RELEASE - FOR THE INFORMATION OF SHAREHOLDERS ONLY
Derek's LAK Ranch project in the prolific Powder River basin of NE Wyoming reached new levels of success this month. We are very pleased to inform you that we have met all of our targets for 2005 ahead of schedule.
Quote: "We assure you that Derek management is determined and focused on significantly increasing levels of production by the end of this year." End quote.
Mission Accomplished: The Continuous Steaming Program commenced at the end of October 2005 with immediate positive results. Using primarily one of the three recently completed injection wells, a significant increase in production from 10 to 60 barrels of oil in only six days of the program was observed. The production rate did reach up to 70 barrels of oil and as the operators are distributing the steam evenly into all three of the injector wells the horizontal producer is sustaining approximately 40-60 barrels of oil a day.
A private placement was closed this month which increased Derek's treasury to approximately 2.25 Million dollars. This new influx of capital will be used for general working expenses and to ensure Derek's financial obligations are met for future developments on the LAK Ranch project.
And finally, Derek Oil & Gas Corporation recently announced that the 3D seismic is indicating potential for hydrocarbons in deeper horizons in addition to the currently producing Newcastle sandstone.
OPERATIONS PROGRESS:
Complete:
- 1 Million USD 3-D seismic survey shallow interpretation
- Completed drilling of three vertical steam injection wells
- Steam testing the recently completed vertical injector wells
- Commenced Continuous Steaming Program
- Increased production from 10 - 60 barrels a day in first week of Continuous Steaming Program and sustaining production between 40 and 60 bopd
- Announced Derek's further potential for deeper targets below the Newcastle sandstone
Current:
- 3D seismic data continues to be interpreted and is being used for current and future developments on the LAK Ranch project
- Sustaining production of 40 to 60 bopd from the currently producing Newcastle horizon
- Reservoir temperature is being monitored to control production zone temperature gradient
- Discussing available options and determining a corporate strategy for exploring & developing the potential for deeper horizons below the Newcastle sandstone
Upcoming:
- Monitor & optimize Continuous Steaming Program
- Monitor & optimize production zone temperature
- Anticipate increase in oil production and as more of the reservoir is heated up the viscous oil becomes more liquid
- Discuss & determine Derek's strategy to explore and develop hydrocarbon potential in deeper horizons in addition to the Newcastle sandstone
September Stock Talk:
Shares Issued & Outstanding: 39,526,628
Fully Diluted: 45,881,128
| TSX.V : DRK (CDN) |
 |
OTC BB : DRKOF (USD) |
| Monthly Volume: |
1,075,996 |
Monthly Volume: |
656,800 |
| Month High: |
$0.60 |
Month High: |
$0.51 |
| Month Low: |
$0.51 |
Month Low: |
$0.42 |
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 oil production
- Determine Derek's strategy for exploring and developing hydrocarbon potential in deeper horizons in addition to the Newcastle formation
- Research to acquire more land for further exploration & development is ongoing
CORPORATE COMMUNICATIONS:
- Derek management is focused on developing strong communications with its current and potential shareholders by effectively executing its corporate goals
- Investment Strategy Analyst, Dr. Michael Berry has joined forces with Derek Oil & Gas Corporation to provide better exposure for Derek in the US market
- Closed a non-brokered private placement for 3,940,000 units at a price of $0.50 per unit putting two million into Derek's treasury
- A flash presentation & streamlined corporate package or link including the new developments is available for mailing & emailing to current & future shareholders
- Calgary Financial Forum (Nov. 17-20 2005) was a disapointment with respect to the attendance at the conference. However, Investment Strategy Analyst Dr. Michael Berry, was sponsored by Derek Oil & Gas Corporation at the Forum which created some interest directed to Derek management.
- Please visit www.sedar.com to view all of Derek's publicly-filed documents or feel free to contact Ms. Erica Bearss, VP Corporate Communications at the Derek's head office for any immediate follow up on the Company's progress or for complimentary corporate material
Where do we go from here?
Our focus for this upcoming month is to monitor the continuous steaming stage of the project. Our expectation for the three vertical steam injection wells is to further increase the levels of oil production during this highly profitable time in the oil & gas sector and prove the economic viability of the project. We are determined to break the 100 bopd mark in the first quarter next year which should determine the economic viability of the project, so if you are considering investing further into Derek then it is most likely a good time to do so. In addition to the development and production from the Newcastle horizon Derek Oil & Gas Corporation has plans to discuss the ideal strategy to explore & develop the hydrocarbon potential in deeper horizons. Derek is very pleased with the exceptional progress during the month of November 2005.
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 are forecasting exceeding the hundred barrels a day mark in the Newcastle horizon in the first quarter of 2006 and focused on analyzing the available options to Derek to determine the most valuable strategy for developing the hydrocarbon potential in the deeper horizons.
Barry C.J. Ehrl, President & C.E.O.
barry@derekoilandgas.com |
