Wyoming Okays Derek Oil & Gas' Drill Permit Application
Derek Oil & Gas Corp. said the company has received formal approval for drill permit applications from the Wyoming Oil and Gas Conservation Commission (WOGCC).
In addition to acquiring drilling permit approval and signing the drilling contract with Elenberg Exploration we are pleased to inform you that the contractor responsible for surface preparation prior to drilling is being mobilized to the site.
Management anticipates spudding the first well in early March 2007 with program completion, tie in to facilities and steaming to commence in May 2007.
The 12-well vertical 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 have selected the well placements based on targets identified using the US$1.1 million, 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 $2.1 million.
This upcoming 12-well program will be conducted jointly with a third party on a 50-50 cost basis, with the third party receiving 50 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.