Click your left mouse button or an arrow button if present, to advance the slide. At any time you may press ESC to Quit the presentation
DRK:TSX.V INVESTING IN NORTH AMERICA Previous Disclaimer 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.
DRK:TSX.V INVESTING IN NORTH AMERICA Introduction to Derek Oil & Gas Corporation: Corporate Structure & Overview Projects – North America Financial Status & Potential Investment opportunities Management & Board of Directors Contact Information
DRK:TSX.V INVESTING IN NORTH AMERICA Previous Company Profile Oil Exploration, Development & Production Company Canadian based North American Property/Assets Public Company Trading Board: TSX Venture Exchange Ticker Symbol: DRK Share Structure (as at November, 2010) Issued & Outstanding: 99,606,251 Fully Diluted: 134,990,251 Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Previous Derek Oil’s Prime Property Burlington Northern Railway Town of Newcastle & Wyoming Refinery Total Property Area 8000+ Acres 3D Seismic Area 2880 Acres or 4.5 sq. miles LAK Ranch Pilot Plant DRK:TSX.V INVESTING IN NORTH AMERICA
Burlington Northern Railway Town of Newcastle & Wyoming Refinery Total Property Area 8000+ Acres 3D Seismic Area 2880 Acres or 4.5 sq. miles LAK Ranch Pilot Plant more info DRK:TSX.V INVESTING IN NORTH AMERICA 3D SEISMIC AREA MAP OF THE PROPERTY
Newcastle Oil Refinery Just 5 miles (15 min.) from LAK Ranch Property DRK:TSX.V INVESTING IN NORTH AMERICA 3D SEISMIC AREA MAP OF THE PROPERTY
Prime Property Asset 8000 + Acres Prolific Powder River Basin Safe & Desirable North American Location Excellent Access & Services 3D SEISMIC AREA MAP OF THE PROPERTY
SURFACE FACILITIES Features of Surface Facilities DRK:TSX.V INVESTING IN NORTH AMERICA
Surface Facility Features Bateman’s Engineered Plant handles up to 2,000 bopd Two new 50 MM BTU Generators Housed in new building N atural gas pipeline supplies the steam generator Complete heater treater plant 27 MM BTU Old Steam Generator Tank battery for oil storage Water treatment plant for generator Water supply contract in place DRK:TSX.V INVESTING IN NORTH AMERICA SURFACE FACILITIES
WHAT IS FOUND UNDERGROUND DRK:TSX.V INVESTING IN NORTH AMERICA
Blue Sky Hydrocarbon Potential The following are the Multiple oil potential horizons identified in the 3D seismic survey: 1) Newcastle Formation: over 50MM barrels OIP, 50%+ recoverable 1) Lower Alluvial 2) Upper Marine 2) Fall River 3) Minnelusa WHAT IS FOUND UNDERGROUND
DRK:TSX.V INVESTING IN NORTH AMERICA Newcastle Sand Formation 12 Well drill program completed 2007 Depths from surface to 1,600 feet Comprised of 2 porous zones: upper marine and lower alluvial Initial development in lower alluvial sand Average porosity: 25% Average permeability: 500~1,000 MD Average oil saturation: 60-65% Need additional steam from new 50 MM BTU generators to put wells on production WHAT IS FOUND UNDERGROUND
DRK:TSX.V INVESTING IN NORTH AMERICA NEW STEAMING STRATEGY NEW UPDIP INJECTION STRATEGY Pilot injectors: 3 producer to injector conversions require 900 BDS. 1-P injectors: 3 existing will require 600 BDS. Steam soak 8 producers at 1.5 cycles/year requires 600 BDS. STEAM REQUIREMENT FOR NEW UPDIP INJECTOR PLAN: 2100 BDS OLD 5 SPOT PATTERN INJECTION STRATEGY Pilot injectors: 4 injectors/pattern design requires 1200 BDS 1-P injectors: 2 up dip design requires 600 BDS Steam soak 8 producers at 2 cycles/year requires 400 BDS STEAM REQUIREMENT FOR 5 SPOT PATTERN INJECTOR PLAN : 2200 BDS CURRENT AVAILABLE STEAM CAPACITY ~2500 BARRELS/DAY Previous
DRK:TSX.V INVESTING IN NORTH AMERICA FUTURE PLANS: 1.Include 1-P lateral in our 12 well pilot expansion 2.Utilize the full horizontal lateral potential (only heel area,1/3 of lateral is being heated). This has been determined by our fiber optic temperature results from ex-SAGD injector 2-I lateral that is along side the 1-P lateral (~30’). 3.Return idle well 2-I (ex SAGD injector) to producer status. Produce 2-I and utilize the fiber optic temperature to determine productivity in the toe area. Suspect well(s) were drilled out of zone. The 1-P well will be shut-in while producing 2-I. 4. Note when steam stops production drops and when steam returns production returns. Previous DEREK OIL & GAS CORPORATION
DRK:TSX.V INVESTING IN NORTH AMERICA FUTURE PLANS: 1.Steam cycle soak all producers in conjunction with continuous steam injection. Wells are still cold after 4 months of continuous steaming. Flow line temperature from all active producers range from 50 to 80 F. 2.Alter the steam drive configuration from a pattern to line drive with the uppermost row to consist of continuous injectors. 3.The Newcastle structure consists of a ~35° north to south dip. With this type of geology we need to utilize gravity as our ally by heating the reservoir up dip and capturing mobile liquids down dip. We will use our 3 existing up dip wells and add 3 new wells as the up dip injector row. Previous DEREK OIL & GAS CORPORATION
INITIAL DEVELOPMENT – 2005/2006 Continuous Steam Injection Program DRK:TSX.V INVESTING IN NORTH AMERICA
Steam Flood Program INITIAL DEVELOPMENT The Process: Inject steam into perforated vertical injector wells Steam heats reservoir to decrease oil viscosity Oil & water moves through permeable channels Oil & water is pumped to the surface & separated using heater treater facility Production Projection: Increased oil production to levels of 25 barrels/day from 12 well program DRK:TSX.V INVESTING IN NORTH AMERICA
Central Injector Producer 1 Producer 2 Producer 3 Producer 4 DRK:TSX.V INVESTING IN NORTH AMERICA Short Term – 1 Year Observe steam flow & production increase from pilot phase development & newly drilled 12 well program. Augment cash flow through increased oil production & re-invest into further development Continuous interpretation of $1.1 Million USD 3D Seismic survey Mid Term – 3 Years Approximately 135 total wells drilled with 115 being producer wells Future Development THE 12 WELL PROGRAM
QUALITY OF OIL BEING PRODUCED High Quality oil Characteristics Horizontal Producer Well 1-P Pore Spaces DRK:TSX.V INVESTING IN NORTH AMERICA
High Quality Oil Characteristics QUALITY OF OIL BEING PRODUCED: Low Paraffin Low Sulphur content: <0.5% Pricing at $12.00 USD deduct to “West Texas Intermediate (WTI)” grade Medium weight (average 19 API gravity) Oil characteristics suitable for Jet Fuel DRK:TSX.V INVESTING IN NORTH AMERICA
The Separation Process OIL & WATER SEPARATION PROCESS
The Separation Process OIL & WATER SEPARATION Produced fluids flow to the “Heater Treater” where oil & water (produced fluids) are separated Produced fluids flow to their respective storage tanks Oil is sold to purchaser and water is processed for disposal
DRK:TSX.V INVESTING IN NORTH AMERICA Projected Net Back WTI$60$80 Sale Price of Oil$48.00$68.00 State Taxes ($6.43)($9.11) Royalties ($6.96)($9.86) Cost of Steam($9.80)($9.80) Other Operating Costs($3.50)($3.50) Net Back Per Barrel$21.31$35.73 Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Gross Production & Number of Wells Previous
DRK:TSX.V INVESTING IN NORTH AMERICA FAQ’s Derek’s fiscal year = May 1 st to April 30 th Cash on Hand – $50,000 NPV (discounted 10%) = $98,380,000 Burn Rate – $90,000/month Debt – $1.5 million Recent Trade Range $0.03- 0.055 Insider & 9 Institutional Holdings: 54% ( 54,502,495 shares) Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Derek’s Public & Financial Documents Please visit: www.sedar.com to view all publicly filed documents including annual & quarterly statementswww.sedar.com Or Call: 1.888.756.0066 For immediate follow up on the most current information Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Why Derek? No exploration risk in Newcastle Sandstone Expandable Reserves & Production on Per Share Basis Safe & Desirable North American Location Previous
DRK:TSX.V INVESTING IN NORTH AMERICA BOARD OF DIRECTORS Mr. Barry C. J. Ehrl President, C.E.O. & Director Dr. Eike Hamer Director Mr. John Lush Director For a brief bio of our directors & management, please click on any of the names below To Picture Gallery Mr. Robert Hurkmans Chief Operating Officer Mr. Greg Amor, CA Chief Financial Officer Director Previous
CLOSE DRK:TSX.V INVESTING IN NORTH AMERICA Mr. Barry C. J. Ehrl President, C.E.O. & Director Barry is a founder of Derek Oil & Gas Corporation with over 35 years of experience working with public companies in the oil & gas sector. Barry is an entrepreneur who has held several senior management positions in public companies and has been successful in raising millions of dollars in capital to fund the exploration & development of projects in North America & internationally.
CLOSE DRK:TSX.V INVESTING IN NORTH AMERICA Dr. Eike Hamer, MBA Director Dr. Hamer holds a Phd in Economics and a Masters in Business Administration (MBA) from the University of Rostock in Germany with extensive studies at the University of Bonn and the University of Osnabrück. Dr. Hamer is current publisher of "Wirtschaft aktuell". Wirtschaft aktuell is a news letter providing background information on political and economic developments in Europe. The publication was formerly based in Zurich Switzerland and is now attached to the "Mittelstandsinstitut Niedersachsen". The Middelstandsinstitut Niedersachsen was founded more than 30 years ago and is one of the most prestigious research institutes for entrepreneurs globally. Dr. Hamer is a member of the executive board of the "Deutsche Mittelstandsstiftung", a well known foundation in Germany and is the current CEO of ELUX Wealth Management, an investment advisory corporation. With the addition of Dr. Eike Hamer on the Derek Board of Directors, the Company will strengthen its presence, knowledge and corporate development strategies in European markets.
CLOSE DRK:TSX.V INVESTING IN NORTH AMERICA Mr. John Lush Director John is an international executive with over 35 years of experience in the oil and gas sector. He is currently President of Petroval Pte Ltd. (Singapore), a company specializing in the sales and marketing of crude and refined oil products. With extensive experience gained working in three continents in executive positions with BP, Phibro Energy and Neste, John brings international exposure and years of expertise in the oil industry to the Derek board of Directors.
Mr. Robert Hurkmans Chief Operating Officer Bob has recently joined the Derek Management Team after spending the past seven years with Occidental Petroleum Corporation ("Oxy") as a Production and Drilling Engineer with their successful Elk Hills project and newly acquired Mukhaizna heavy oil field project. He has over 37 years experience in the oil industry and specializes in improving the drilling/production economics of tertiary recovery projects (with an emphasis on steam soak/flood technology) such as Derek's LAK Ranch project. Bob has worked on thermal projects in California (Midway Sunset, Belridge/McKittrick, Cymric, Kern River/Kern Front, Santa Maria/Cat Canyon, Arroyo Grande and the Brea/Yorba Linda). He was on a thermal horizontal drilling/completion team for Shell Oil Co and drilled over 150 wells in California. Bob designed and drilled/completed the first thermal horizontal producer for Oxy USA that resulted in more than doubling the production as compared to the best vertical producer. He was instrumental in reducing drilling costs and overall capital and operating costs on the Midway Sunset project by up to 30%. He won the ARCO Award for reducing drilling costs at Midway Sunset, the Shell Oil Company Award for coil tubing/slimhole drilling at Belridge/McKittrick and was a finalist for the Occidental Engineering Excellence Award in 2001 and 2003 for applying large HF/HCl acid treatments on horizontal wells at Elk Hills, California. CLOSE
Mr. Greg Amor, CA Chief Financial Officer Director Greg is a Chartered Accountant with 19 years experience with the resource industry. He has held senior management positions with numerous public resource companies. He has raised $20 plus million in financing for public companies. CLOSE
DRK:TSX.V INVESTING IN NORTH AMERICA PICTURE GALLERY Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Previous Contact Us Head Office: Suite 502 1281 West Georgia St. Vancouver, BC Canada V6E 3J7 Tel.: 604-331-1757 Fax: 604-669-193 Toll Free: 1-888-756-0066 Transfer Agent: Computershare Trust Company Of Canada 2nd floor,510 Burrard St. St., Vancouver, BC Canada V6C 3B9 US Site Office: P.O. Box 823 32 Tub Town Rd. Newcastle, Wyoming USA 82701 Auditors: PriceWaterhouseCoopers Address: Vancouver, BC Canada Lawyers: Tupper, Johnson & Yeadon 1710-1177 West Hastings St. Vancouver, BC Canada V6E 2L3 w w w. d e r e k o i l a n d g a s. c o m
DRK:TSX.V INVESTING IN NORTH AMERICA MANAGEMENT FOCUS Previous
DRK:TSX.V INVESTING IN NORTH AMERICA Mission Statement Derek Oil & Gas Corporation (Derek) has a corporate mission to become a mid-tier energy producer within five years. This mission is to be accomplished through exploration, development and production from its oil & gas assets in North America.