Deep Well Converts 5 Oil Sands Permits to Leases, Mulls Devt Options

Deep Well Oil & Gas and its subsidiaries announced that its winter drilling program has met its objectives and the Company has been allowed to convert 5 sections of its 5 year oil sands permit, which would have expired on April 9, 2009, to a 15 year primary oil sands lease.

The Company drilled 6 wells during this year's winter drilling season. Three wells were drilled on the oil sands permit lease to provide technical data to support the required regulation set out by the Department of Energy to convert the aforementioned 5 sections of our oil sands permit. In addition, three wells were drilled further north. These wells continued the delineation of the main reservoir trend and confirmed the main reservoir continues towards the northern limits of our leases.

The Company is evaluating the many options for production, now available to it, to decide the best course of action. Drilling on 80% owned lands has opened new avenues for testing and further development of the Sawn Lake project. On the 12 sections of jointly held lands, which the Company does not operate, the Company is also exploring different plans of action with the operator.

On March 18, 2008 the Department of Energy granted our request to extend the term of our oil sands permit for 1 year to April 9, 2009. On May 5th, 2009 we were informed by the Alberta Department of Energy that they had approved our application to convert 5 sections of our oil sands permit to a 15-year primary lease. By drilling on these lands, where the permits were set to expire, Deep Well has not only preserved title to 5 sections but now has a primary lease which is now valid for an additional 15 years.

In the near term Deep Well also expects to begin an environmental assessment for further development of the Sawn Lake project.


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