Deep Well Oil & Gas, Inc. and its subsidiaries signed a farmout agreement with a wholly owned subsidiary of Maurel et Prom to fund the company's share of the demonstration project at the company's Sawn Lake heavy oil reservoir in the Peace River oil sands region of Northern Alberta. Deep Well has accepted a private placement from MP West Canada SAS, a wholly owned subsidiary of Maurel et Prom of $22 million priced at 48.8 cents per share. Deep Well will issue 45.1 million shares to Maurel et Prom.

Further, Maurel et Prom has entered into a joint venture agreement with Deep Well agreeing to provide up to $40 million in funding for the various steps of the demonstration project, in return for a net 25% working interest in 12 of the 68 sections where Deep Well has a working interest of 50%. Maurel et Prom will also provide funding to cover operating expenses of Deep Well. First production is expected in the first months of 2014.

The demonstration project is on the 12 sections of lands in the Sawn Lake reservoir in which Deep Well and Maurel et Prom will each hold a 25% interest.