Derek Commits to LAK Ranch Program

Powder River Basin
(Click to Enlarge)
Derek Oil & Gas Corporation said that it plans to begin a 13-well development program by the end of 2006. This vertical well program will consist of a pattern of four injector and nine producer wells targeted to produce from the Newcastle sandstone formation on LAK Ranch in Wyoming's Powder River Basin.

Derek's geological/geophysical consultants selected the well placements based on interpretations and targets identified in the US$1.1 million 3D seismic completed over 4.5 square miles of the property. Within the program area, the pay zone is estimated to be 40 to 70 feet thick. Budgeted costs of the program are estimated to be US two million five hundred thousand dollars (US$2.5 Million). The current pilot phase production is approximately 45-60 barrels of oil per day (bopd), from one horizontal well, and the Company expects that within a year of commencement of steaming into the 13 well program area we will produce approximately 550 bopd.

This program will be conducted jointly with SEC Oil and Gas Partnership ("SEC") on a fifty-fifty cost basis, with SEC receiving fifty percent of the revenue until payback of their initial investment. Once payback is met SEC's revenue interest will revert to forty percent. As part of the participation agreement SEC will receive 1,000,000 Derek share purchase warrants, exercisable at $0.75 for nine months after completion of the 13 well program, and exercisable at $1.00 for the next 12 months.

To oversee this program the Company has retained the combined consulting services of Pacific Geotechnical Associates Inc. (Bakersfield, CA), SI International Inc. (Denver, CO Office) and Peterson Energy Management, Inc. (Loveland, CO). These consulting firms will combine to deliver extensive expertise in all aspects of heavy oil project management, development and production to Derek's LAK Ranch Project.

Further to Derek's news release of October 25, 2006, Derek anticipates closing the purchase of Ivanhoe Energy's interest in the LAK Ranch Project on December 1, 2006.

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.

Related Companies
 Company: Ivanhoe Energymore info
 - Ivanhoe, SBM Team Up in Alliance for Offshore Heavy Oil Development (Mar 20)
 - Ivanhoe Finalizes Transfer of Zitong Block to Shell China (Dec 27)
 - Ivanhoe Inks MOU for China Block Sale (Jan 11)
 Company: Derek Oil and Gasmore info
 - Derek: Steam Injection Begins at LAK Ranch (May 15)
 - Derek Reports Successful LAK Ranch Drilling (Apr 25)
 - Derek Announces LAK Ranch Progress (Mar 22)
 Company: SEC Oil & Gas Partnershipmore info
 - Derek Completes Purchase of LAK Ranch Interest (Dec 5)
 - Derek Commits to LAK Ranch Program (Nov 8)
 Company: Pacific Geotechnical Associates Inc.more info
 - Derek Commits to LAK Ranch Program (Nov 8)
 Company: SI International Inc.more info
 - Derek Commits to LAK Ranch Program (Nov 8)
 Company: Peterson Energy Management, Inc.more info
 - Derek Commits to LAK Ranch Program (Nov 8)

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
US Fort Lupton: Entry Level Technology Services Technician
Expertise: Production Engineering
Location: Fort Lupton, CO
Drill Rig Operator
Expertise: Directional Driller|Driller|Drilling Foreman / Drilling Supervisor
Location: Sand Springs, OK
Directional Driller - South Texas
Expertise: Driller
Location: San Antonio, TX
search for more jobs

Brent Crude Oil : $50.97/BBL 1.53%
Light Crude Oil : $48.75/BBL 1.79%
Natural Gas : $2.92/MMBtu 0.68%
Updated in last 24 hours