Derek Oil & Gas Corporation - President's Report

President's Report Board of Directors Management Team AGM Materials Financial Statements Corporate Directory Corporate Policies Community Relations

Mon Dec 17, 2007
President's Report - December 2007

THIS IS NOT A NEWS RELEASE - FOR THE INFORMATION OF SHAREHOLDERS ONLY

SEASONS GREETINGS AND BEST WISHES FOR 2008

Dear Supporters, Shareholders & Potential Investors:

The Company is pleased to report continued progress on its LAK Ranch heavy oil project. During the last half of 2007, Derek was successful in hiring a "steam flood/steam drive" expert to help with the ongoing development at LAK Ranch. Mr. Robert Hurkmans joins Derek as its Chief Operating Officer after spending the past six years with Occidental Petroleum Corporation as a Production and Drilling Engineer with their large Elk Hills light oil and Mukhaizna heavy oil projects. Mr. Hurkmans has over 37 years experience in the oil industry and specializes in improving the economics of secondary 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 Western and Shell Oil Company, Mr. Hurkmans has reduced drilling/production 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.

The following table summarizes performance since completion of this year's drill program and Mr. Hurkman's assumption of duties as Chief Operating Officer:

Month/Year	Daily Average Combined Production for Month (bopd)	Total Combined Shipments During Month (bbls.)	Value of Oil Shipped During Month (US$$)

August-07	18.00	482.81	$ 31,574.08
September-07	15.83	243.31	$ 16,692.53
October-07	25.84	958.78	$ 69,353.16
November-07	54.90	1,862.00	$ 130,340.00

As shown in the table, average daily production, monthly oil shipments, and gross oil receipts per month are all increasing as the reservoir receives more steam. The production should increase for the next several months as the reservoir heats up.

Quick Overview on Derek for new readers:

Derek has a 95% working interest on the overall 8000 acres of prime property located in a regional oil migration fairway in NE Wyoming's Powder River Basin.
The 12 well program only is being conducted with a third party on a fifty-fifty cost basis, with the third party receiving fifty percent of the revenue until payback on their initial investment is met. Once payback is met, the third party's working interest (only on the 12 well program area) will revert to forty percent. Derek owns an approximate 4.42% royalty in the overall property.
The LAK Ranch property is located five miles from the Newcastle Refinery.
The reservoir contains tens of millions of barrels of high quality oil.
The oil is viscous & requires an enhanced oil recovery method (EOR) to extract.
The infrastructure required to extract the oil was designed & built by Bateman Engineering Inc.
The above ground facilities have been paid for in full (by Derek) and are operating successfully. LAK Ranch is producing a high quality, low sulphur and low paraffin oil.
Derek's management is confident that the modified Enhanced Oil Recovery (EOR) techniques we continue to implement are applicable, duplicable and economically viable for the Newcastle Sandstone formation being developed on the LAK Ranch property.
Several hydrocarbon targets have been identified with our extensive $1.1 Million USD 3D seismic survey that continues to aid management in identifying potential new targets through further in-depth seismic interpretation.
Derek management and its highly qualified Board of Directors are focused & determined on making the LAK Ranch property a domestic oil supplier to the United States of America.

Please visit http://www.derekoilandgas.com/s/NewsReleases.asp to review Derek's archived and newly posted Press Releases or call 1-888-756-0066 for a Corporate Package.

What is Derek's short-term agenda (next 12 months)?

Increase overall production as reservoir heats up from the 12 well program.
Purchase, permit and install another steam generator to provide more steam into the reservoir.
Conduct another drilling program in 2008 to increase production, earnings, and cash flow per share, thereby increasing shareholder value.
Continue modifying the long term economic & development plan as new reservoir information is received.

What is Derek's long term goal?

Reach commercial production levels from LAK Ranch.
Ensure the best price is being received for oil produced.
Be a significant oil supplier to North America.

Derek's Blue Sky Potential:

Deeper horizons identified in the 3D seismic are a major part of Derek's future development program.
Once the Newcastle Formation is producing on a positive cash flow basis, Derek plans on re-investing in the exploration and development of similar types of projects & locations.

Corporate Communications:

Derek's Corporate Communications team continues to develop strong communications by effectively reviewing & executing corporate goals set by management.

Ensuring up-to-date public awareness through continuous updates of corporate material on the Company's website.
Being cognizant of the importance of good shareholder relations.
Seeking further Analyst coverage.
Corporate presentation & streamlined corporate package or link is always available for mailing or emailing to current & future shareholders.
Third Party Report written by Fundamental Research Corp. on Derek Oil & Gas Corporation available on their website at www.researchfrc.com or through General and Subscription Inquiries from Fundamental Research Corp.: Phone: 604-682-7050 Toll Free: 1-800-913-2377 Fax: 604-682-7001 or E-mail: info@researchfrc.com

Current Financial Status & Share Structure:

Cash on hand- CDN$40,000.00
Shares Issued- 48,773,450
Warrants o/s- 6,898,850
Options o/s- 3,852,830
Fully Diluted- 59,525,130

Derek is trading in Canada on the TSX Venture Exchange with the symbol DRK.

Derek Oil & Gas Corporation

2007 | 2006 | 2005 | 2004

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December 17, 2007	President's Report - December 2007
June 28, 2007	President's Quarterly Report -- June 2007
January 25, 2007	President's Quarterly Report -- January 2007
August 24, 2006	President's Quarterly Report -- August 2006
May 09, 2006	President's Quarterly Report -- May 2006
February 13, 2006	President's Monthly Report - January, 2006
January 19, 2006	President's Monthly Report - December, 2005
December 19, 2005	President's Monthly Report - November, 2005
October 25, 2005	President's Monthly Report - September, 2005
September 12, 2005	President's Monthly Report - August, 2005
August 04, 2005	President's Monthly Report - July, 2005
July 07, 2005	President's Monthly Report - June, 2005
June 02, 2005	President's Monthly Report - May, 2005
May 03, 2005	President's Monthly Report - April, 2005
April 04, 2005	President's Monthly Report - March, 2005
February 10, 2005	President's Update, Mid-February, 2005:
December 20, 2004	President's Update, December, 2004
October 20, 2004	President's Update, Mid-October, 2004
August 30, 2004	President's Monthly Update - August 2004
July 28, 2004	President's Monthly Update - July 2004
July 09, 2004	President's Monthly Update - June 2004
May 31, 2004	President's Monthly Update - May 2004
April 28, 2004	President's Monthly Update - April 2004
March 12, 2004	President's Monthly Update - March 12, 2004
February 17, 2004	President's Monthly Update, February, 2004

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