Deep Well Oil & Gas Begins Production Flow Testing at Sawn Lake

Deep Well Oil & Gas, Inc. reports that production testing has been initiated on the first well of the Sawn Lake 2006 drill program. The operator, Signet Energy, has confirmed that a down hole pump and tubing has been installed. A testing crew is currently on location and production flow testing has been initiated. Further information will be released by the company on the status of the well as flow rates and other relevant information becomes available.

On December 6, 2005 Signet Energy announced that it had successfully drilled the first vertical test well that was plugged back then kicked off horizontally for a distance of approximately 600 meters and cased. Signet stated further: "laboratory analysis determined the core from the vertical well has an average porosity of 32%, permeability in the range of 4 darcys, and over 40 feet of oil pay." There is also a significant gas concentration present.

Deep Well Oil & Gas, Inc. is a Nevada corporation based in Alberta Canada. Deep Well and its subsidiaries Northern Alberta Oil Ltd. and Deep Well Oil & Gas (Alberta) Ltd. have an 80% working interest, subject to a farmout agreement, in 63 contiguous sections of oil sands leases and 6.5 sections of oil sands permits in the Sawn Lake heavy oil area in North Central Alberta. After the farmout partner drills 10 wells at no cost to Deep Well, the farmout partner will fully earns it's interest in the project. Deep Well will then directly hold 40% of the project. In addition, Deep Well owns approximately 29.5% of our farmout partner's common shares. A previously published independent engineering report estimated that, there are 819.5 million original barrels of oil in place.