Derek Oil & Gas Corporation
TSX VENTURE : DRK

Derek Oil & Gas Corporation

October 31, 2007 11:18 ET

Derek Announces $385,000 Private Placement and Commencement of New Well Production

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 31, 2007) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Derek Oil & Gas Corporation (TSX VENTURE:DRK) is pleased to announce that it has agreed to and closed, subject only to regulatory approval, a non-brokered private placement of 1,100,000 units at a price of $0.35 per unit, raising $385,000. Each unit will consist of one common share and one share purchase warrant, with each full warrant exercisable into a further common share of the Company at a price of $0.40 for eighteen months from closing. The Company will pay a finders' fee on all or a part of this financing to arms length registered dealers. The registered dealers will receive a finders' fee of 7% cash or units. The closing of this non-brokered placement and the finders' fee is subject to regulatory approval. The securities in connection with this financing will have a four month hold period from the date of regulatory approval.

The Company will use the proceeds to pay for its share of the remaining costs of the recently completed LAK Ranch twelve well drill program and for general working capital. This vertical well program consists of a pattern of four injector and eight producer wells targeted to produce from the Newcastle sandstone formation. Derek's geotechnical consultants selected the well placements based on interpretations and targets identified in 3D seismic surveys. Within the program area, the pay zone is estimated to be 40 to 70 feet thick. This program was conducted jointly 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 revenue interest will revert to forty percent.

Derek is also pleased to announce that the first oil from the new wells was shipped in September. Production from these new wells is expected to reach 240-300 barrels a day after the wells have been steamed for four months.

Derek Oil & Gas Corporation is a Canadian based, publicly traded oil exploration, development 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 located approximately five miles from the Newcastle refinery.

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.

This document includes forward-looking statements. Forward looking statements include, but are not limited to, the continued advancement of Derek Oil and Gas'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.

The TSX Venture Exchange has neither approved nor disapproved the information contained herein.

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