Deep Well Oil & Gas, Inc.
PINK SHEETS : DWOG

Deep Well Oil & Gas, Inc.

July 18, 2005 13:07 ET

Deep Well Oil & Gas Corporate Update

CALGARY, ALBERTA--(CCNMatthews - July 18, 2005) - Deep Well Oil & Gas, Inc. ("Deep Well") (PINK SHEETS:DWOG), and its new management and board of directors are pleased to provide shareholders a general corporate update.

On February 25, 2005, Deep Well and its subsidiary Northern Alberta Oil Ltd. ("Northern") entered into a Farmout Agreement with Surge Global Energy, Inc. (SRGG - OTCBB) in connection with the Sawn Lake area of Alberta, Canada. Pursuant to the Farmout Agreement, Surge agreed to drill a test well, at their expense, on or before 150 days from the date of the Farmout Agreement. In exchange, Surge will earn 50% of Deep Well's and Northern's working interest in the section of land on which the test well is located and five additional sections of their selection. Upon the completion or abandonment of the first Option Well drilled by Surge under the Farmout Agreement, U.S. $ 1,000,000 is payable to Deep Well as a Prospect Fee. Surge will have the option to drill another well within 60 days after the rig release of the test well in exchange for 50% of Deep Well's and Northern's working interest in the section of land on which the second option well is located and five additional sections. For a period of two years (the "Earning Period"), Surge will have the option to drill additional wells and earn 50% of Deep Well's and Northern's working interest in various sections. This can continue until Surge has drilled 10 wells, at an estimated cost of U.S. $ 15,000,000, earning up to a 40% undivided working interest in the 63 sections in the Sawn Lake area held by Deep Well and Northern.

On June 7, 2005, Deep Well completed its acquisition of 100% of Northern. Deep Well issued 18,208,875 shares to the shareholders of Northern Alberta Oil Ltd. who have tendered their shares under the terms of a Share Exchange Agreement. With this acquisition Deep Well and Northern now have 80% of 63 sections in the Sawn Lake Oils sands region, subject to the Farmout Agreement as stated above. With this acquisition Deep Well now has 51,320,343 shares outstanding.

On June 29, 2005 a majority of shareholders of Deep Well elected a new board of directors. The new directors are Dr. Horst A. Schmid, Mr. Cyrus Spaulding and Mr. Donald Jones. Mr. Curtis Sparrow was added as a director on July 1, 2005. Dr. Schmid took over as President of the company and will be Chairman of the Board. Dr. Schmid has a long and distinguished career as Exporter of Alberta Petroleum Industry Products and Equipment as well as 15 years as Cabinet Minister for the government of Alberta and 10 years as Commissioner General for Trade. Mr. Sparrow has been involved in the oil and gas industry in various capacities for over 25 years. He held directorships and senior officer positions with junior exploration and development companies before becoming a self-employed consultant. As a registered professional engineer Mr. Spaulding brings a rich wealth of experience to Deep Well Oil & Gas in forecasting, analysis and projecting hydrocarbon liquids fractionation plants, heavy oil pilot plants and heavy oil commercial plants. Mr. Jones a professional engineer has extensive experience in the fields of broad oil, natural gas and petrochemicals that span the manufacturing and service sectors, as well as engineering and project management in the EPC environment. Mr. Jones has also worked at senior management level for companies with both new and established oil and gas properties. Very importantly for Deep Well, Mr. Jones was Project Manager, including field construction, commissioning, and optimization on past SAGD Pilot Facilities which laid the ground work for commercial scale production and processing of heavy oil.

The new board has had an open dialogue with Surge to review the drilling plans and establish a mutually acceptable time frame to begin drilling. Upon management's review of certain documentation and the professional advice of a Geologist, which Surge has engaged, it was mutually agreed by Deep Well and Surge to immediately analyze the new data to enable Surge to spud the first option well as soon as soon as possible but to grant an extension to the 150 days from the date of the Farmout Agreement in the interest of amicable cooperation.

Deep Well Oil & Gas, Inc. is a Nevada corporation based in Alberta Canada. Deep Well and Northern . have an 80% working interest in 63 contiguous sections of oil sands leases in the Sawn Lake oil sands in North Central Alberta, Canada. Deep Well and Northern have a Farmout Agreement with Surge Global Energy, Inc, whereby Surge has the potential to earn up to 50% of Deep Wells' and Northern' s 80% working interest in the 63 contiguous sections.

This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Actual results could differ materially from those projected in the Company's proposed oil and gas related business. The Company's business is subject to various risks, which are discussed in the Company's filings with the Securities and Exchange Commission ("SEC"). The Company's filings may be accessed at the SEC's Edgar system at www.sec.gov. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such a statement.

Deep Well Oil & Gas, Inc. (PINK SHEETS:DWOG - News)

Contact Information

  • Deep Well Oil & Gas, Inc.
    Dr. Horst A. Schmid
    President
    (780) 409-9264