Derek Oil & Gas Corporation
TSX VENTURE : DRK

Derek Oil & Gas Corporation

December 05, 2006 08:31 ET

Derek Oil & Gas Corporation Completes Purchase of Ivanhoe Energy's LAK Ranch Interest

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 5, 2006) - Derek Oil & Gas Corporation ("Derek") (TSX VENTURE:DRK) is pleased to announce the closing of the purchase of Ivanhoe Energy's interest in the LAK Ranch Project as at November 30, 2006. The total purchase price was US$800,000 of which US$600,000 was paid in cash on November 30, 2006 and the remaining US$200,000 was paid to Ivanhoe through a 5% gross overriding royalty interest on future LAK Ranch production. Please note that this 5% royalty arrangement will terminate once Ivanhoe receives US$200,000.

Included in the purchase of Ivanhoe's interest among other things was the ownership of the US$1.1 million high definition 3D seismic paid for primarily by Ivanhoe which has been and will be used by Derek's consultants to pinpoint the location of the upcoming 13 well program announced November 10th, 2006. Derek and SEC Oil and Gas Partnership can now finalize their arrangements with relation to this program. Derek is proceeding with the permitting process for this program and expects to have permits to drill by January of 2007.

Derek now holds a 95% working interest in the LAK Ranch project and is the project operator. The LAK Ranch Project is a strong fit for Derek's corporate focus of using enhanced oil recovery (EOR) techniques to develop new production from reservoirs in North America. Derek and its valued partner, SEC Oil and Gas Partnership are confident in the ability of Derek's management to drive this project forward as promptly as possible in 2007.

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 Powder River Basin just five miles up the road 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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