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Alberta Oil Sands 

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Deep Well Oil & Gas, Inc., through its wholly owned subsidiaries, Northern Alberta Oil Ltd. and Deep Well Oil & Gas (Alberta) Ltd. has a 90% working interest in 51 sections on six oil sands leases and an 80% working interest in 5 sections on one oil sands lease in the Peace River oil sands area of Alberta, where we are operator. In addition, the Company has a 25% working interest in another 12 sections on two oil sands leases in the Peace River oil sands area of Alberta, Canada. Together these nine oil sands leases, which are contiguous, cover 43,015 gross acres (17,408 gross hectares) of land.

On July 30, 2013, we entered into a farmout agreement (the “Farmout Agreement”) with a new joint venture partner (the “Farmee”) to fund our share of the recently Alberta Energy Regulator (“AER”) approved Steam Assisted Gravity Drainage Demonstration Project (the “SAGD Project”). The SAGD Project is located on our joint Sawn Lake properties in the Peace River oil sands region of Alberta. In accordance with the Farmout Agreement, the Farmee has agreed to provide up to $40,000,000 in funding for our portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where we have a working interest of 50% (before the Farmout Agreement). As required by the Farmout Agreement, the Farmee has paid Cdn $11,014,946 to the operator of the SAGD Project for the Farmee’s share and our share of the initial costs of the SAGD Project. Also, the Farmee is required to provide funding to cover our monthly operating expenses not to exceed $30,000 per month. In addition, the Farmee has the option to elect to obtain a working interest ranging from 40% to 45% in the remaining 56 sections of land where we have working interests ranging from 80% to 90%, by committing $110,000,000 of financing for the development of our Sawn Lake oil sands project.

In connection with the the SAGD Project agreement dated July 30, 2013, we entered into a Water Rights Conveyance Agreement whereby we acquired a 25% working interest in one water source well and one water disposal well for a cost of Cdn $425,000, which in turn was reimbursed to us by the Farmee. We also received cash in the amount of Cdn $1,058,568, from the Farmee, for the expenditures relating to the water source well, water disposal well and pipelines to connect them to the SAGD Project surface facility pursuant to the Farmout Agreement.

As reported by our joint venture partner and operator of the SAGD Project, the first SAGD well pair has been drilled and completed and construction of the steam facility is underway.


Sawn Lake Area Project



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Edmonton - Alberta - Canada