The Company is pleased to announce the production 14,357 barrels of oil at average revenue of about US$80 per barrel for the year ended December 31, 2012. This compares very favorably to the 2011 year when only 6,676 barrels at average revenue of US$85 per barrel were produced. This represents over a 100% increase in production for the comparative periods, with revenue also doubling from US$568,000 to US$1,140,000.

Record production of over 2,100 barrels (approx.70 barrels per day) occurred in December 2012.

Mr. Barry C.J. Ehrl notes , "The Company has recently started using a process of intermittent application of steam, with the target of higher production, at a lower relative cost, and is focusing efforts on the most successful wells. This combined with our prospective joint venture with a private oil company. I firmly believe that the positive prospects for Derek will be recognized by the market."

In December, 2012 the Company announced the execution of a term sheet with a private oil company for the continued development of its LAK Ranch property in Wyoming. Under the term sheet, subject to regulatory approval, Derek and the private oil company will form a 60% - 40% joint venture. As consideration for entering into the joint venture, the private oil company will among other things, conduct a program of at least 5 wells within 12 months of closing. Pending completion of industry documentation, closing is anticipated for January 31, 2013.

The Company also recently announced it had received regulatory approval, of up to $500,000, by way of private placement. The placement comprises up to 20,000,000 units at a price of $0.025 per unit. Each unit consists of one share and one share purchase warrant. Each warrant entitles the holder to purchase a further common share of the Company at a price of $0.05 per share for a term of 12 months from closing, and at $0.10 per share for years 2 to 5.

Derek Oil & Gas Corporation is a Canadian based, publicly traded oil exploration 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

ON BEHALF OF THE BOARD

Mr. Barry C.J. Ehrl,
President and C.E.O.

For further information please contact Derek's Corporate Communications Department at:
Telephone: 1-888-756-0066 or (604)-331-1757

Corporate E-Mail: info@derekoilandgas.com
Website: http://www.derekoilandgas.com

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

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.
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