Deep Well Resolves Sawn Lake Issues

Sawn Lake Oil Sands
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Deep Well Oil & Gas and its subsidiaries have amicably resolved all outstanding issues with their Sawn Lake heavy oil project partner, Andora Energy, to both companies operational and commercial satisfaction. The settlement includes the following key points:

- Deep Well has confirmed that Andora has earned a 40% working interest ("WI") in 12 sections (the "Earned Sections") of oil sands development leases by way of the 2005 farmout agreement entered into between Deep Well and Signet Energy Inc. (Signet was subsequently acquired by Andora in September 2007). Six of these sections have already been conveyed to Andora (Signet at the time) with the final six sections to be transferred.

- Andora has been confirmed as the operator of the 12 sections earned under the farmout agreement. Deep Well will be the operator on its other sections.

- Andora has acknowledged that DeepWell is not responsible for any royalty assumed by Deep Well on behalf of Signet in the Farmout Agreement.

- A joint discontinuance of the remaining minor litigation issues amongst the two parties.

With the amicable settlement completed Deep Well plans to continue with its development efforts of the Sawn Lake project.


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