Deep Well IDs New Hydrocarbon Zone

Deep Well announced the results of a technical analysis performed on some of the wells it owns. It has recently received the final report from Chapman Petroleum Engineering Ltd., which analyzes the area which Deep Well has drilled in the Sawn Lake Project. The report confirms the suitability of the wells as candidates for thermal recovery methods. The wells also compare favorably to wells produced under CSS (Cyclical Steam Stimulation) by Shell in the Peace River area.

In addition, Chapman Petroleum Engineering Ltd. identified a new hydrocarbon bearing zone up-hole from the Bluesky zone presently being concentrated on by the Company. This secondary heavy oil zone is the Peace River formation. It is a clastic unit of Lower Cretaceous age found at a shallower depth than the Bluesky in almost half of the Company's land. It is approximately 35 meters thick and is a massive very fine to medium grain sandstone conformably deposited on the Harmon shale. The company will continue the development of the Bluesky reservoir and at the same time will evaluate this newly discovered reservoir by coring future wells.

The President of Deep Well stated that the discovery of the new hydrocarbon bearing zone adds to the value and longevity of the Bluesky Reservoir in the Sawn Lake Project.