Deep Well Oil & Gas, Inc. announces that its joint venture partner as operator of the Steam Assisted Gravity Drainage Demonstration Project has commenced drilling the first of two horizontal wells for its jointly owned SAGD Project. This well will be drilled to a vertical depth of approximately 650 metres with a horizontal leg of approximate 750 metres targeting the Sawn Lake Bluesky reservoir zone. Once this first horizontal well is drilled it is anticipated that the operator will immediately drill the second horizontal well of the first SAGD well pair for the SAGD Project.

Deep Well previously announced that it had served notice of election to participate in the SAGD Demonstration Project planned by its joint venture partner and operator of the SAGD Project. This SAGD Project is on jointly owned lands located at 7- 30-91-12W5 where Deep Well has a 25% working interest. The 2013 phase of the SAGD Project consists of the drilling of two horizontal wells, the construction of a steam generation facility, water handling and oil treating, along with water source and disposal well facilities.

It is anticipated steam operations will commence in December 2013 with first oil production anticipated in the first quarter of 2014.