Derek Resources

DEREK RESOURCES CORPORATION OVERVIEW

The primary focus of Derek Resources Corporation is the establishment of new oil production through re-entry into significant reservoirs whose reserves were previously uneconomic to recover through conventional means. Derek realizes this objective by embracing relatively new, yet proven, innovative technologies such as Steam Assisted Gravity Drainage (“SAGD”), Gas Assisted Gravity Drainage (“GAGD”) and low temperature oxidation (“LTO”).

Derek is currently employing SAGD technology at their pilot LAK Ranch Property, located in Eastern Wyoming. The LAK Ranch Property covers 7,468 acres of privately optioned and federally leased ground underlain by the Powder River Basin, a historically important oil producing structure. Previous exploration activities at the LAK Ranch Property have been conducted by Texaco, Conoco, Parent Oil, Mapco and Surtek. Surtek produced an in-house resource estimate of 100 million barrels of oil on the LAK Range property. To date, Derek has completed the initial well pair for their Pilot Plant, on-schedule. Materials for construction of the Pilot Plant are now being delivered to the site, with steam injection and initial production targeted for early 2001. Initial production at LAK will enable Derek to move significant portions of the estimated resource into the probable and proven categories. To-date, in excess of US$2.3 million has been spent at the LAK Ranch Project. Derek has a 75% interest in the project and is the sole project operator.

On October 30, 2000, Derek acquired an option to purchase a 51% interest in the 1,880 acres Morton Project, located in Converse County, Wyoming. Like the LAK Ranch Project, the Morton is located in the Powder River Basin. Over the last 15 years, 25 wells have been drilled on the project, of which 17 are still producing. Based upon past drilling and geological interpretation, Dr. Paul Trost, a geologist and geochemist, estimates that there are some 35 million barrels of oil in place.

Derek Resources is a debt free company. The management and field engineering teams have extensive experience in the financial arena as well as the oil patch. Dr. Paul Trost, B.Sc., Ph.D., Vice President of Operations of the U.S. Subsidiary, is a recognized industry expert in oil recovery. Dr. John K. Donnelly, Ph.D., P.Eng., Vice President of Engineering and Director, has worked extensively with Shell, Chevron, BP Canada, Blackrock Ventures and Alberta Energy, among others. Founder, CEO and President, Mr. Barry Ehrl, and CFO, Mr. Frank Hallam, B.B.A., C.A., have each established credentials working in finance and other aspects of production-stage and development-stage resource companies.

Industry analysts confirm that the long-term outlooks for the global oil and natural gas sectors are quite promising. At a time when reducing the dependence on overseas oil is critical to North America, Derek is now working to successfully recover oil reserves from their Wyoming assets. During a recent conference call, CFO, Frank Hallam, emphasized that the LAK Ranch Project is a development project, rather than an exploration play. Indeed, it is known that oil is there. Initial test wells and the now-installed production well pair have confirmed Company expectations about the reservoir. The key here is for Derek to confirm that their applied technologies can exploit their assets in a profitable manner. Company engineers are encouraged by all results and progress to date.