| | THIS IS NOT A NEWS RELEASE - FOR THE INFORMATION OF SHAREHOLDERS ONLY
In light of the holiday season and a new year, I would like to take this opportunity to thank all those involved with Derek Oil & Gas Corporation's growth and new developments in 2005. It is the mixture of motivated employees, a highly qualified and active board of directors, our experienced JV partner, and our highly valued and prized shareholders that have made rapid progression in 2005 possible for Derek.
The LAK Ranch project, located in the prolific Powder River Basin in NE Wyoming only 5 miles from the Newcastle oil refinery demonstrated more progress in 2005 than in the last three years. Derek is so pleased to inform you that the Company met all its targets for 2005 ahead of schedule and is looking forward to further success and progress in 2006.
Let's recap the year 2005 accomplishments:
- In January of 2005 Derek reported completion of a $1 million USD 3-D seismic survey over 4.5 miles of the 7500 acre LAK Ranch property
- Three vertical injector wells were drilled, cased and activated
- Derek welcomed Mr. George Eynon to the Derek board of directors. Mr. Eynon has over 35 years of experience and knowledge in the oil and gas sector
- Commenced the Continuous Steaming Program which demonstrated immediate positive results
- Increased oil production from a level of 10 to 15 bopd to 45-80 bopd
- Derek discovered new hydrocarbon potential through 3D seismic interpretation in lower horizons of the reservoir
- Derek initiated discussions with Ivanhoe Energy to explore and develop the new hydrocarbon potential while continuing development and improving production levels from the Newcastle formation
- Facilitated a non brokered private placement which increased Derek's treasury to approximately 2.25 million dollars
- In December 2005 the LAK Ranch project broke even for the first time!
December Stock Talk:
Shares Issued & Outstanding: 39,526,628
Fully Diluted: 45,891,128
| TSX.V : DRK (CDN) |
 |
OTC BB : DRKOF (USD) |
| Monthly Volume: |
1,156,446 |
Monthly Volume: |
1,201,600 |
| Month High: |
$0.58 |
Month High: |
$0.51 |
| Month Low: |
$0.49 |
Month Low: |
$0.40 |
Derek's Corporate Goals for 2006:
We expect 2006 to be a very exciting year for Derek Oil & Gas. The Company's 2006 focus will be to increase shareholder value through higher levels of oil production by executing the following:
2006 Operations:
- Supporting Ivanhoe & their exceptional technical expertise with enhanced oil recovery methods on the Newcastle formation of the LAK Ranch reservoir
- Offering Ivanhoe potential strategies evaluated by Derek's consultants at Pacific Geotechnical and its highly qualified board of directors
- Monitoring results from the Continuous Steaming Program
- Establishing the economic viability of the project
- Working with Ivanhoe to determine the most cost effective plan to reach commercial production of the significant amounts of high quality oil that exists in the LAK Ranch reservoir
- Evaluating the ideal strategy to explore & develop the hydrocarbon potential in deeper horizons
- Determining an effective drill program
- Monitoring that the highest possible price is being received for LAK Ranch oil production
- Researching to acquire more land for further exploration & development
Unfolding Corporate Decisions in 2006:
- Derek & Ivanhoe will determine the optimal economics for the Newcastle formation
- Derek will evaluate and put together a development plan for the hydrocarbon potential in deeper horizons
- A reserve report for Derek Oil & Gas will be completed by AJM Petroleum Consultants of Calgary Alberta following Derek's April 30th year end
- In Derek's third quarter of 2006 their project partner Ivanhoe Energy (after one year of continuous steaming) believes they should have enough data to decide on their go-forward decision on the LAK Ranch project. However, should thermal results improve and production rates increase this decision could be made earlier
- Derek will focus on evaluating the most effective business strategy to increase value for both shareholders and the company with respect to further development on the Newcastle formation and the future exploration and development of the hydrocarbon potential in deeper horizons
2006 Financial Status: Going into 2006 Derek has no long term debt, minimal liabilities and $1.8 million dollars in the bank. Good news, due to the increase in oil production in December the LAK Ranch project broke even for the first time!
2006 Corporate Communications Plan: The Investor Relations program for Derek will be implementing new strategies in order to increase the effectiveness of communication between the Company and current and potential shareholders.
- Management is focused on developing strong communications with its current & potential shareholders by effectively executing its corporate goals
- Derek has entered into an Investor Relations program with Stockgroup to further expose Derek to the investment community
- The Company will be re-building the Derek website to ensure that the most up to date information is being presented in a professional and effective manner
- Derek will be carrying out cost analysis of domestic and international conferences to ensure that Derek's participation will benefit its shareholders and the Company
- Derek will be evaluating the benefits of an Investor Relations Hub where the investment community can visit to offer opinions and find updates on Derek's progress
- Investment Strategy Analyst, Dr. Michael Berry will continue his endeavors for further exposure for Derek in the US market
- Our flash presentation & streamlined corporate package or link is always available for mailing or emailing to current & future shareholders
- Please visit www.sedar.com to view all of Derek's publicly-filed documents
- Ms. Erica Bearss, VP Corporate Communications at Derek's head office is available for any immediate follow up on the Company's progress or for complimentary corporate material
On behalf of the management team at Derek we would again like to thank all of our current & future shareholders for their continued support & interest in Derek Oil & Gas Corporation. 2005 was highly focused on evaluations, interpretations, and due diligence so we expect 2006 will be a year of decision making, drilling wells and determining the optimal economics and most effective plan for extracting the significant amounts of high quality oil that exists in the LAK Ranch reservoir. Derek management is focused on attaining our corporate goals for 2006, as we did in 2005.
Barry C.J. Ehrl, President & C.E.O.
barry@derekoilandgas.com |
