Deep Well Elects to Participate with Andora in Demonstration Project to Produce Heavy Oil at Sawn Lake
August 21 2013 - 08:00AM
Marketwired
Deep Well Oil & Gas, Inc. (OTCQB:DWOG) (and its subsidiaries -
"Deep Well" or "Company") is pleased to announce that it has served
notice of election to participate in the SAGD Demonstration Project
planned by Andora Energy Corporation, in Section 30-91-12W5 held by
Andora (50%), MP West Canada (25%) and Deep Well (25%).
The election is pursuant to a Demonstration Project Joint
Operating Agreement dated July 30, 2013, reached between Andora and
Deep Well's wholly-owned subsidiaries, Northern Alberta Oil Ltd.
and Deep Well Oil & Gas (Alberta) Ltd.
The effect of this election is that Deep Well will participate
in Andora's demonstration project to produce oil from Section 30 of
the jointly-held lands, which geological studies show has one of
the thickest pay zones of heavy oil in the Sawn Lake reservoir with
the most easily-accessible potential for production to yield
sustained commercially-viable quantities of heavy oil for a few
decades.
Deep Well's portion of expenses related to the Section 30 SAGD
project, up to $40 million US, will be borne entirely by MP West
Canada SAS, a wholly-owned subsidiary of Saint-Aubin Energy (owned
1/3 by Maurel et Prom and 2/3 by MPI, two listed companies based in
Paris, France - "Maurel et Prom"). Under a previously announced
farmout agreement, Maurel et Prom is spending up to $40 million US
on the demonstration project, in return for a net 25 per cent
working interest in the 12 sections comprising the Deep Well-Andora
joint lands.
It is anticipated that drilling and then steaming will take
place this fall. First oil production from Sawn Lake is anticipated
in the first quarter of 2014.
Maurel et Prom and MPI are France's second and third largest oil
and gas companies. They have proven experience as oil operators
with a presence in Africa and Latin America. In 10 years, they have
drilled more than 100 exploration wells and discovered major fields
at minimum cost. Currently working in 11 countries on 4 continents.
The two companies' management is comprised exclusively of
professionals with strong track records in the oil and gas
industry.
Deep Well and its Canadian subsidiaries, Northern Alberta Oil
Ltd. and Deep Well Oil & Gas (Alberta) Ltd., has, before the
Farmout to Maurel et Prom, a 90 per cent working interest in 51
contiguous square miles of oil sands leases, an 80 per cent working
interest in 5 contiguous square miles of oil sands leases and a 25
per cent (post Farmout) working interest in 12 contiguous square
miles in the Sawn Lake heavy oil area in North Central Alberta. The
leases cover 17,408 gross hectares (43,015 gross acres).
This project is separate from Deep Well's earlier announced
thermal recovery project, intended to extract heavy oil using
Horizontal Cyclic Steam Stimulation (HCSS) on the north half of
Section 10-92-13W5 where Deep Well has a 90 per cent working
interest.
Effective December 31, 2011, DeGolyer and MacNaughton Canada
Limited (D&M), an independent qualified reserves evaluator, in
their report named, "Assessment and Evaluation of Reserves and
Resources as of December 31, 2011 on the Sawn Lake Property owned
by Northern Alberta Oil Ltd in Alberta, Canada", assigned probable
reserves(1) of 7.8 million barrels to the planned pilot project
lands and an additional 198 million barrels of best case contingent
resources(2) to Deep Well's remaining Sawn Lake lands in the Peace
River oil sands area of Alberta. These reserves and resources were
calculated before changes to our working interests.
(1) Probable Reserves in this News Release are those additional
reserves which analysis of geoscience and engineering data indicate
are less likely to be recovered than Proved Reserves but more
certain to be recovered than Possible Reserves. These estimated
probable reserves are classified as undeveloped at this time.
(2) Contingent Resources in this News Release are those
quantities of petroleum estimated, as of December 31, 2011, to be
potentially recoverable from known accumulations by application of
development projects, but which are not currently considered to be
commercially recoverable due to one or more contingencies. The
Contingent Resources in this News Release reflect the 'best
estimate' as reported by D&M. A 'best estimate' is the estimate
of the quantity of resources that will actually be recovered. It is
equally likely that the actual quantities recovered will be greater
or less than the 'best estimate'. Specific contingencies precluding
these contingent resources being classified as reserves include but
are not limited to; regulatory approvals to develop the resources
and financing.
Deep Well is fully committed to best practices in environmental
stewardship to assure sustainable development of its in-situ heavy
oil holdings.
Statements relating to "reserves" are deemed to be forward
looking statements, as they involve the implied assessment, based
on certain estimates and assumptions, that the reserves described
exist in the quantities predicted or estimated, and can be
profitably produced in the future. Investors are cautioned not to
assume that any part or all of the probable or possible reserves
described herein will ever be converted to proved reserves.
The estimates of reserves and future net revenue for individual
properties may not reflect the same confidence level as estimates
of reserves and future net revenue for all properties, due to the
effects of aggregation.
This news release contains forward-looking statements, including
those related to anticipated operations and timing of production
from the Sawn Lake area. The words or phrases "would be", "to be",
"will allow", "intends to", "will likely result", "expected", "will
continue", "is anticipated", "potential", "recoverable",
"estimate", "forecast", "project", or similar expressions are
intended to identify "forward-looking statements". Actual results
could differ materially from those projected in the Company's
proposed oil and gas related business and described in this news
release. The Company's business and the realization of the results
contemplated by this news release are subject to various risks,
which are discussed in the Company's filings with the SEC. The
Company's filings may be accessed at the SEC's Edgar system at
www.sec.gov. Statements made herein are as of the date of this news
release and should not be relied upon as of any subsequent date.
The Company cautions readers not to place reliance on such
statements. Unless otherwise required by applicable law, we do not
undertake, and we specifically disclaim any obligation, to update
any forward-looking statements to reflect occurrences,
developments, unanticipated events or circumstances after the date
of such a statement.
Contacts: Deep Well Oil & Gas, Inc. (780)
409-8144info@deepwelloil.com www.deepwelloil.com
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