Derek Oil and Gas Corporation : Newcastle Provides a Corporate and Operational Update

Newcastle Energy Corp. (the "Company") provides a corporate and operational update.

The Company started 2013 in financial difficulties and facing the prospect of losing its rights granted under the LAK Ranch leases, which were the Company's only asset. Management successfully averted this situation by, on February 15, 2013, concluding a Joint Acquisition Agreement ("JAA") with MAHA Energy Corp., a private Canadian oil based oil company. This JAA, among other things, resulted in:

• cancellation of the former 100% Newcastle leases which were in default,
• new petroleum leases being entered into with landowners, with a 60% interest to MAHA and 40% to Newcastle,
• the new leases established new royalties to the underlying petroleum rights holders
• the continuation of certain other 3rd party royalties payable by Newcastle solely from its 40% working interest,
• the payment by MAHA of all taxes and petroleum right holder royalties owing on the former leases,
• the payment by MAHA and Newcastle of over $300,000 of third party contractor debts,
• the assignment by Newcastle of various working interests in any targets deeper than the Newcastle formation (for a total 6% working interest in such targets)
• the obligation by MAHA to drill 5 new wells (3 wells completed to date, 2 scheduled for drilling before June 2014, and
• the filing of new federal leases, 60% working interest to MAHA and 40% working interest to Newcastle.

While this JAA effectively vested of a 60% working interest in the LAK Ranch project to MAHA, Newcastle benefited by being able to retain a 40% working interest in the project, and having paid over $750,000 of outstanding liabilities related to its operations, and having the project advanced by the drilling of 5 new wells, the first wells drilled since 2007.

In March the Company replaced senior management and applied for a name change which was approved by shareholders at the June annual general meeting. The overhead charges of the Company have been reduced under the management team by about $70,000 for the current year. A further reduction by $50,000 annually will begin in April 2014 with the expiration of the pre-existing office lease.

In May MAHA applied for, and the State of Wyoming approved, a change of operatorship from the Company's US subsidiary to MAHA.

In June 2013, the US Department of Energy shut down the Rocky Mountain Oil Testing Center ("RMOTC"). As a result of the RMOTC shut down, the Company's lease of two RMOTC steam generator and a number of beam pumps came to an end. The Company and MAHA were the successful bidders in an open auction to acquire the on-site equipment previously leased. The Company is pleased to report that as operator MAHA, in addition to the 3 new wells drilled and other developments above, has completed the following developments on the property during the year.

• Review and repair of existing wells
• Re-arranging some wells for more effective steam coverage, and
• Use condensate soaks on several wells to improve wellbore region and enhance production.
• Swab test 4 old shut in wells, and put on production, and
• Permitted and initiated steaming of the three new wells, each well to receive 10,000 barrels of steam prior to being put on production, and
• Upgraded the water handling and disposal systems on site.

The Company has been informed by MAHA that the 2014 capital plan includes the drilling of 10 wells in addition to the two new wells required to complete the JAA. Currently the Company is not in a position to finance its share of the cost of these wells. Should wells be drilled without the required capital contribution from the Company, the Company's interest in the LAK Ranch Project would go into penalty (forfeit all revenue from the property) until the funding party recovers 250% of operation and development costs, and 400% of exploration expenditures of any work program. Given this, management is currently assessing all its options, from outright sale of its interests, to a merger or other arrangement, or if possible a financing

Greg Amor,
"GREG AMOR"

President and CEO

ON BEHALF OF THE BOARD

"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.

For further information please contact Newcastle Energy Corp. at:
T: [phone]
F: [phone]
E-Mail: [e-mail]