Derek Oil & Gas Corporation

Derek Oil & Gas Corporation

March 22, 2007 08:30 ET

Derek Oil & Gas Corporation Reports Successful Progress & Directional Drilling on LAK Ranch

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 22, 2007) - Derek Oil & Gas Corporation (TSX VENTURE:DRK) is pleased to announce that it has successfully drilled four wells of the twelve well program; the fifth well will be drilled by the end of today and the drill will then be moved to the "north" pad, where directional drilling will commence.

Randy Metz, Derek's primary Geological consultant, reports to Derek management: "The wells are coming in as expected. Given the dips in the area the sands have come in at expected depths, and the thicknesses are in line with what we have computed from the seismic isochrons. The numbers derived from the logs have indicated good oil saturation levels."

Derek management is excited to report that costs for and operation progress on the 12 well program is on track and tie in to facilities and steaming is due to commence in May 2007.

The 12 vertical well program totaling approximately 13,250 feet will consist of a pattern of four injector and eight producer wells targeted to produce from the Newcastle sandstone formation. Derek's consultants selected the well placements based on targets identified using the $1.1 million USD, high definition 3D seismic survey completed over 2880 acres (4 1/2 square miles) of the 8000 plus acre LAK Ranch property. Within the program area, the pay zone is estimated to be 40 to 70 feet thick. The estimated drill budget is US Two Million One Hundred Thousand Dollars (US $2.1 Million).

This 12 well program is being 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 (only on the 12 well program production) will revert to forty percent. Derek will have a 95% working interest in any current and future development and production on the property outside this 12 well program area.

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.

Derek Oil & Gas Corporation is trading in Canada on the TSX Venture Exchange with the symbol DRK.


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 & Gas Corporation'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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