Derek Resources Corporation - LAK Ranch Pilot Plant Nearing Completion.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--Jan. 9, 2001

Derek Resources (OTCBB:DRKRF)(CDNX:DRS.CX)

Derek Resources Corporation reports that work is progressing well on the Steam Assisted Gravity Drainage ("SAGD") plant being constructed at its LAK Ranch Oil Project in Wyoming.

Final installation and assembly procedures including fabrication, welding, electrical and instrument component installation and equipment testing are underway. It is anticipated that these activities will require several more weeks to complete.

A 33,000 foot long four-inch natural gas pipeline has now been installed to the site and the completed sections have been successfully pressure tested. The line is complete with the exception of three sections, which remain to be bored beneath intersections with the Burlington Northern Railway and two highways. The boring and completion of these sections is awaiting formal approval and is expected to occur before the SAGD plant is ready to commission.

Initially, the first installed well pair is expected to produce 300 to 600 barrels of oil per day. The SAGD plant has the capacity to process up to 2,000 barrels of oil per day. This equates to the production from approximately four well pairs.

While operating on the one installed well pair alone, the rate of natural gas consumption for the plant has been projected at 1.0 MCF per barrel of oil. The SAGD plant is capable of running directly on oil produced from the LAK, rather than natural gas, but analysis shows that the current price of oil makes it more lucrative to burn natural gas and sell the produced oil, even with the increased natural gas prices being experienced at this time.

For full-scale production at the LAK Ranch Project the company is investigating the installation of an electrical co-generation facility. Natural gas, oil or coal could be used as a fuel. This would reduce fuel costs for steam generation while also providing revenue from electricity sales. Emissions from such a plant would be scrubbed and injected into the reservoir in order to enhance oil recovery and minimize any environmental impact. The LAK Ranch is favourably located relative to gas, oil and coal supplies as well as to power transmission lines. Aside from generating positive cash flows, the company's current SAGD Project at the LAK Ranch is expected to provide most of the data required to complete a full-scale feasibility study into co-generation.

The LAK Ranch Oil Project is comprised of 7,468 acres located about four miles south of the town of Newcastle, Wyoming and is within the prolific oil producing Powder River Basin. Previous work at the LAK Ranch by major oil companies has indicated a large resource of high quality oil, which the company's engineers believe to be economically recoverable using newly developed SAGD technology from Canada.

Previous exploration activities at the LAK Ranch have been conducted by Texaco, Conoco, Parent Oil, Mapco and Surtek (previously Exoil Services). Surtek conducted field mapping studies, the drilling and coring of numerous wells, and a resource estimate based upon their work and all previous drill hole data. In 1984 Surtek estimated that the LAK Ranch contained a resource of 100+ million barrels of napthenic oil, in place.

In 1998 Paul Trost, B.Sc., Ph.D., under contract to Derek Resources Corporation, conducted a four well drilling and coring program at the LAK Ranch. Based upon the resulting logs/cores and a review of the Surtek data and conclusions, Dr. Trost is in agreement with the Surtek estimate of a 100+ million barrel oil resource.

The oil at the LAK Ranch was not previously recoverable on an economic basis using available technologies. Work and studies conducted by company Director Dr. John Donnelly, P.Eng., Ph.D.; Dr. Paul Trost and other third party engineers indicates that oil can be economically recovered at the LAK Ranch using SAGD and related technologies.

DEREK RESOURCES CORPORATION "Barry Ehrl" "Frank Hallam"

Barry C.J. Ehrl, Director Frank Hallam, Director

Cautionary Note to U.S. Investors: The United States Securities and Exchange Commission permits resource companies, in their filings with the SEC, to disclose only those oil and gas deposits that a company can economically and legally extract or produce. We may use certain terms and calculations of oil and gas reserves on this news release, such as calculations of "resources" and "reserves" that the SEC guidelines prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No. 0-30072, available from us at Suite 1730, 355 Burrard Street, Vancouver, British Columbia, Canada, V6C 2G8. You can also obtain this form from the SEC by calling 1-800-732-0330.

Form 20-F File No.: 0-30072

The Canadian Venture Exchange has neither approved nor disapproved the information contained herein.