SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~(Mark One)~~
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2011

		~~For the fiscal year ended September 30, 2010~~

		or

o	¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		~~For the transition period from ______ to ______~~

		~~Commission File Number 0-24012~~

Commission File Number 0-24012

DEEP WELL OIL & GAS, INC.

Nevada		13-3087510
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Suite 700, 10150 – 100 Street, Edmonton, Alberta, Canada		T5J 0P6
(Address of principal executive offices)		(Zip Code)

Securities registered ~~under~~pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
None		None

Securities registered ~~under~~pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value per share

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

	Large accelerated filer o¨	Accelerated filer o¨
	Non-accelerated filer o¨ (Do not check if a smaller reporting company)	Smaller reporting company þ

~~TABLE OF CONTENTS~~			Page Number

		~~Page Number~~

GLOSSARY AND ABBREVIATIONS				4

CURRENCY EXCHANGE RATES				6

PART I

ITEM 1.		BUSINESS		6
		Formation of Organization		6
		Business Development		7
		Principal Product		7
		Market and Distribution of Product		8
		Competitive Business Conditions		8
		Customers		9
		Royalty Agreements		9
		Government Approval and Crown Royalties		9
		Research and Development		10
		Environmental Laws and Regulations		10
		Employees		10

ITEM 1A.		RISK FACTORS	12	10

ITEM 1B		UNRESOLVED STAFF COMMENTS	15	14

ITEM 2.		PROPERTIES	15	14
		Office Leases
	~~Oil & Gas Properties~~14
	~~Acreage~~	Oil and Gas Properties		14
		Acreage		14
		Reserves, Production and Delivery Commitments		14
		Drilling Activity		15
		Present Activities		15
		Past Activities		16

ITEM 3.		LEGAL PROCEEDINGS		18

ITEM 4.		(REMOVED AND RESERVED)		19

PART II

ITEM 5.		MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
		MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	20	19
		Market ~~Price~~ Information ~~for Common Stock~~		19
		Holders of Record
	~~Dividends~~19
	~~Equity Compensation Plan Information~~	Dividends		19
		Securities Authorized for Issuance Under Equity Compensation Plans		20
		Performance Graph		21
		Recent Sales of Unregistered Securities		21

ITEM 6.		SELECTED FINANCIAL DATA	22	21

ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23	22

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		27

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS			28

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		28
	Consolidated Balance Sheets		29
	Consolidated Statements of Operations and Comprehensive Loss		30
	Consolidated Statements of Shareholders’ Equity		31
	Consolidated Statements of Cash Flows		35
	Notes to the Consolidated Financial Statements		36

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	48	47

ITEM 9A.	CONTROLS AND PROCEDURES	48	47

ITEM 9B.	OTHER INFORMATION	48	47

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	49	48

ITEM 11.	EXECUTIVE COMPENSATION	52	51

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	55	53

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	56	55

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	57	55


PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	58	57

SIGNATURES		60	59

GLOSSARY AND ABBREVIATIONS

The following are defined terms and abbreviations used herein:

API Gravity – a specific gravity scale developed by the American Petroleum Institute for measuring the density or gravity (heaviness) of ~~oil; the~~petroleum liquids, expressed in degrees. The higher the number, the lighter the oil.

Barrel – the common unit for measuring petroleum, including heavy oil. One barrel contains approximately 159 L.

Battery – equipment to process or store crude oil from one or more wells.

Bbl or Bbls – means barrel or barrels.

Bitumen – a heavy, viscous form of crude oil that generally has an API gravity of less than 10 degrees.

Cdn – means Canadian dollars.

Celsius – a temperature scale that registers the freezing point of water as 0 degrees and the boiling point as 100 degrees under normal atmospheric pressure. Room temperature is between 20 degrees and 25 degrees Celsius.

Cold Flow – a production technique where the oil is simply pumped out of the sands not using a Thermal Recovery Technique.

Conventional Crude Oil – crude oil that flows naturally or that can be pumped without being heated or diluted.

Core – a cylindrical rock sample taken from a formation for geological analysis.

Crude Oil – oil that has not undergone any refining. Crude oil is a mixture of hydrocarbons with small quantities of other chemicals such as sulphur, nitrogen and oxygen. Crude oil varies radically in its properties, namely specific gravity and viscosity.

Cyclic Steam Stimulation (“CSS”) or Horizontal Cyclic Steam Stimulation (“HCSS”) – a thermal in situ recovery method, which consists of a three-stage process involving high-pressure steam injected into the formation for several ~~weeks.~~weeks through vertical or horizontal wells. The heat softens the oil while the water vapor helps to dilute and separate the oil from the sand grains. The pressure also creates channels ~~and cracks~~ through which the oil can flow more easily to the well. When a portion of the reservoir is thoroughly saturated, the steam is turned off and the reservoir ~~“soaks”~~maybe left to soak for several weeks. This is followed by the production phase, when the oil flows, or is pumped, up the same wells to the surface. When production rates decline, another cycle of steam injection begins. This process is sometimes called “huff-and-puff” ~~recovery.~~recovery and can be done utilizing vertical or horizontal wells.

Darcy (Darcies) – a measure of rock permeability (the degree to which natural gas and crude oil can move through the rocks).

Density – the heaviness of crude oil, indicating the proportion of large, carbon-rich molecules, generally measured in kilograms per cubic metre (kg/m3) or degrees on the American Petroleum Institute (API) ~~gravity~~ scale.

Development Well – a well drilled within ~~a proven~~an area of a natural gas or oil reservoir to the depth of a stratigraphic horizon ~~known~~ to ~~be productive.~~which proven reserves have been assigned.

Diluents – light petroleum liquids used to dilute bitumen and heavy oil so they can flow through pipelines.

Drill Stem Test (“DST”) – a method of formation testing. The basic drill stem test tool consists of a packer or packers, valves or ports that may be opened and closed from the surface, and two or more pressure-recording devices. The tool is lowered on the drill string to the zone to be tested. The packer or packers are set to isolate the zone from the drilling fluid column.

Drill String – the column, or string, of drill pipe with attached tool joints that transmits fluid and rotational power from the kelly to the drill collars and the bit. Often, the term is loosely applied to include both drill pipe and drill collars.

Enhanced Oil Recovery – any method that increases oil production by using techniques or materials that are not part of normal pressure maintenance or water flooding operations. For example, natural gas can be injected into a reservoir to “enhance” or increase oil production.

Exploratory Well – a well drilled to find and produce natural gas or oil in an unproven area, to find a new reservoir in a field previously found to be productive of natural gas or oil in another reservoir, or to extend a known reservoir.

Farmout – an arrangement whereby the owner (the “Farmor”) of a lease assigns some portion (or all) of the lease(s) to another company (the “Farmee”) for drilling in return for the Farmee paying for the drilling on at least some portion of the lease(s) under the Farmout.

Gross Acre/Hectare – a gross acre is an acre in which a working interest is owned. 1 acre = 0.404685 hectares. 1 hectare = 2.471054 acres.

Heavy Oil – oil having an API gravity less than 22.3 degrees.

Horizontal Well – the drilling of a well that deviates from the vertical and travels horizontally through a producing ~~layer.~~layer of a reservoir.

In situ – In the oil sands context (In situ means “in place” in Latin), In situ methods such as SAGD or CSS through horizontal or vertical wells are required if the oil sands deposits are too deep to mine from the surface.

Lease – a legal document giving an operator the right to drill for or produce oil or gas; also, the land on which a lease has been obtained.

License of Occupation (“LOC”) – a surface crown agreement issued by the Alberta Department of Sustainable Resources Development granting the mineral producer the right to occupy public lands for an approved purpose, usually issued primarily for access roads or to construct access roads, but may also be issued for other purposes.

Light Crude Oil – liquid petroleum which has a low density and flows freely at room temperature. Also called conventional oil, it has an API gravity of at least 22 degrees and a viscosity less than 100 centipoise (cP).

Mbbl or Mbbls – means one thousand barrels or thousands of barrels.

MMbbl or MMbbls – means one million barrels or millions of barrels.

Mineral Surface Lease (MSL) – a surface crown agreement issued by the Alberta Department of Sustainable Resources Development granting the mineral producer the right to construct a well site on publicly owned land.

Net Acre/Hectare – a net acre is the result that is obtained when fractional ownership working interest is multiplied by gross acres.

Oil Sands – naturally occurring mixtures of bitumen, water, sand and clay that are found mainly in three areas of Alberta - Athabasca, Peace River and Cold Lake. A typical sample of oil sand might contain about 12% bitumen by weight.

Pay Zone (Net Oil Pay) – the producing part of a formation.

Permeability – the capacity of a reservoir rock to transmit fluids; how easily fluids can pass through a rock. The unit of measurement is the darcy or millidarcy.

Porosity – the capacity of a reservoir to store fluids, the volume of the pore space within a reservoir, measured as a percentage.

Primary Recovery – the production of oil and gas from reservoirs using the natural energy available in the reservoirs and pumping techniques.

Saturation – the relative amount of water, oil, and gas in the pores of a rock, usually as a percentage of volume.

SEC – means United States Securities and Exchange Commission.

Section – in reference to a parcel of land, meaning an area of land comprising approximately 640 acres.

Solution Gas – natural gas that is found with crude oil in underground reservoirs. When the oil comes to the surface, the gas expands and comes out of the solution.

Specific Gravity – The ratio of the heaviness of a substance compared to that of the same volume of water.

Steam-Assisted Gravity Drainage (“SAGD”) – pairs of horizontal wells (an upper well and a lower well) are drilled into an oil sands formation and steam is injected continuously into the upper well. As the steam heats the oil sands formation, the bitumen softens and drains into the lower well, from which it is brought to the surface.

Thermal Recovery – a type of improved recovery in which heat is introduced into a reservoir to lower the viscosity of heavy oils and to facilitate their flow into producing wells. The pay zone may be heated by injecting steam (steam drive) or by injecting air and burning a portion of the oil in place (in situ combustion).

Upgrading – the process that converts bitumen and heavy oil into a product with a density and viscosity similar to conventional light crude oil.

Viscosity – a measure of a fluids resistance to flow. To simplify, the oil’s viscosity represents the measure for which the oil wants to stay put when pushed (sheared) by moving mechanical components. It varies greatly with temperature. The more viscous the oil the greater the resistance and the less easy it is for it to flow. Centipoise (cp) is the common unit for expressing absolute viscosity. Viscosity matters to producers because the oil’s viscosity at reservoir temperature determines how easily oil flows to the well for extraction.

CURRENCY EXCHANGE RATES

Our functional currency is the US ~~dollar, therefore~~dollar. Therefore, our accounts are reported in United States dollars. However, our Canadian subsidiaries maintain their accounts and records in Canadian ~~dollars (“Cdn”).~~dollars. As a result the Canadian dollar amounts are converted according to our stated foreign currency translation accounting policy, except where otherwise indicated, all dollar amounts herein are stated in United States ~~dollars except where otherwise indicated.~~dollars.

The following table sets forth the rates of exchange for the Canadian dollar, expressed in US dollars, in effect at the end of the following periods and the average rates of exchange during such periods, based on the noon rates of exchange for such periods as reported by the Bank of Canada.

Unless the context indicates another meaning, the terms ~~the~~ “Company,” “Deep Well,” “we,” “us” and “our” refer to Deep Well Oil & Gas, Inc. and its ~~subsidiaries.~~subsidiaries through which it conducts business. For definitions of some terms used throughout this report, see “Glossary and Abbreviations”.

We are an emerging independent junior oil and gas exploration and development company headquartered in Edmonton, Alberta, Canada. Our immediate corporate focus is to develop the existing oil sands land base that we presently own in the Peace River oil sands area in North Central Alberta. Our principal office is located at Suite 700, 10150 – 100 Street, Edmonton, Alberta T5J 0P6, our telephone number is (780) 409-8144 and our fax number is (780) 409-8146. Deep Well Oil & Gas, Inc. is a Nevada corporation and our common stock trades on the OTCQB marketplace under the symbol DWOG. We maintain a web site at www.deepwelloil.com. The contents of our website are not part of this ~~form~~annual report on Form 10-K.

~~Business Development~~Formation of Organization

Deep Well Oil & Gas, Inc. ~~(hereinafter referred to as “Deep Well”)~~ was originally incorporated on July 18, 1988 under the laws of the state of Nevada as Worldwide Stock Transfer, Inc. On October 25, 1990, Worldwide Stock Transfer, Inc. changed its name to Illustrious Mergers, Inc. On June 18, 1991, a company known as Allied Devices Corporation was merged with and into Illustrious Mergers, Inc. and its name was at that time changed to Allied Devices Corporation. On August 19, 1996, a company called Absolute Precision, Inc. was merged with and into Allied Devices Corporation and it retained its name as Allied Devices Corporation.

On February 19, 2003, Allied Devices Corporation filed a Petition for Relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in and for the Eastern District of New York titled In re: Allied Devices Corporation, et al., Chapter 11, Case No. 03-80962-511 (hereinafter referred to as the “Bankruptcy Action”).

On September 10, 2003, after notice to all creditors and a formal hearing, U.S. Bankruptcy Judge Melanie L. Cyganowski issued an “Order Confirming Liquidating Plan of Reorganization” in the Bankruptcy Action (hereinafter referred to as “Bankruptcy Order”). In conjunction with that Bankruptcy Order, Allied Devices Corporation’s (hereinafter referred to as the “Predecessor Company”) liabilities, among other things, were paid off and extinguished. The Bankruptcy Order, among other things, implemented a change of control and a group of new investors took control of the Predecessor Company and changed its name to Deep Well Oil ~~and~~& Gas, Inc.

Upon emergence from Chapter 11 proceedings, Deep Well adopted fresh-start reporting in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting Byby Entities in Reorganization ~~Under~~under the Bankruptcy Code (SOP 90-7). For financial reporting purposes, Deep Well adopted the provisions of fresh-start reporting effective September 10, 2003. All periods presented prior to September 10, 2003, have been designated Predecessor Company.

Deep Well has two wholly owned subsidiaries under which it conducts its operations: (1) Northern Alberta Oil Ltd. (hereinafter referred to as “Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd. (hereinafter referred to as “Deep Well Alberta”), incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005.

Business Development

On April 26, 2004, Northern ~~Alberta Oil Ltd.~~ (formerly known as Mikwec Energy Canada, Ltd.~~, hereinafter referred to as “Northern”~~ and later acquired by Deep Well) signed a Joint Operating Agreement with Pan Orient Energy ~~Corp.~~Ltd. (formerly known as Maxen Petroleum Inc. hereinafter referred to as “Pan Orient”) to provide for the manner of conducting operations on 3three Peace River oil sands ~~development~~ leases for a total of 32 sections covering 20,243 gross acres (8,192 gross hectares). The 32 sections were acquired jointly on April 23, 2004, with Northern having an 80% working interest and Pan Orient having a 20% working interest in the joint lands.

On August 18, 2004, Deep Well and Pan Orient jointly participated in a public offering of Crown Oil Sands Rights held by the Alberta Department of Energy, in which the joint parties successfully bid on 3three Peace River oil sands ~~development~~ leases for a total of 31 sections covering 19,610 gross acres (7,936 gross hectares). Deep Well acquired an undivided 80% working interest and Pan Orient acquired an undivided 20% working interest in the joint property.

On December 9, 2004, Deep Well signed a Joint Operating Agreement with 1132559 Alberta Ltd. (hereinafter referred to as “1132559”) under which 1132559 acknowledged the terms under which their 10% working interest acquired from Pan Orient in the joint lands covering 3 Peace River oil sands development leases for a total of 31 sections, which Pan Orient acquired on April 23, 2004, would be governed.

On February 25, 2005, Deep Well and Northern signed a farmout agreement (hereinafter referred to as the “Farmout Agreement”) with Surge Global Energy, Inc. (hereinafter referred to as “Surge US”) and Signet Energy Inc. (formerly known as Surge Global Energy Canada Ltd., and hereinafter referred to as “Signet”) (collectively, “Surge”). Signet subsequently merged with 1350826 Alberta Ltd. a wholly owned subsidiary of Andora Energy Corporation, and subsequently 1350826 Alberta Ltd. amalgamated with Andora Energy Corporation (hereinafter referred to as “Andora”, a company approximately 53% owned by Pan Orient). This ~~agreement~~Farmout Agreement allowed Surge to earn up to a 40% working interest in the farmout lands (50% of our share). ~~Among other things~~And on November 26, 2007, pursuant to the ~~agreement called for Surge to drill 10 wells, pay $2,000,000 (less expenses related to a financing) as a prospect fee payable as ninety percent (90%) to Northern~~Minutes of Settlement between us, Andora and ~~ten percent (10%) to Deep Well, and grant us,~~Signet, Signet acquired 40% of our working interest in ~~the same proportions, 33.33%~~12 sections on two oil sands leases. As part of the ~~shares of Surge US outstanding on the day the agreement was signed.~~

~~On March 3, 2005, Deep Well, Northern and Surge mutually agreed by an amending agreement~~transfer to ~~extend the payment date~~Signet of the ~~prospect fee under Article 13~~40% working interest, two of the ~~Farmout Agreement dated February 25, 2005, whereby Surge was granted an extension for payment of the prospect fee to the closing date of March 18, 2005.~~

On March 10, 2005, Deep Well, Northern and Surge mutually agreed by an amending agreement to establish a procedure whereby Signet is to be appointed as the operator under the existing Joint Operating Agreements in respect of all Farmout Lands in which Signet earns an interest pursuant to Article 7 of the Farmout Agreement dated February 25, 2005.original oil sands leases were split into four oil sands leases.

On June 7, 2005, Deep Well acquired 100% of the common shares of Northern in exchange for 18,208,875 shares of Deep Well’s common stock. Under the terms of the agreement, Deep Well acquired one hundred percent (100%) of Northern’s issued and outstanding common stock and obtained exclusive options to acquire one hundred percent (100%) of Northern’s preferred stock. The agreement provided that one hundred percent (100%) of Northern’s common and preferred shareholders would exchange their Northern shares for newly issued shares of Deep Well’s restricted common stock. Deep Well, through its acquisition of Northern, acquired ~~a net~~an 80% working interest in 3three Peace River oil sands ~~development~~ leases, 1one oil sands permit and 1one petroleum and natural gas license for a total of 38.5 sections covering 24,355 gross acres (9,856 gross hectares). Through this acquisition our Company ~~has~~ more than doubled its acreage position in the Peace River oil sands to 43,965 gross acres (17,792 gross hectares). Of the total acreage, 6.5 sections are classified as the oil sands permit and petroleum and natural gas license, and were encumbered by an injunction related to a court proceeding involving Classic Energy Inc., (hereinafter referred to as “Classic”), the company Northern acquired this acreage from. This permit and license have now been released and as of November 15, 2005, were transferred to Northern.

~~On July 14, 2005, our Company and Surge mutually agreed to amend the Farmout Agreement dated February 25, 2005 in order to extend the date to spud the first well until September 25, 2005.~~

On September 15, 2005, ~~Deep Well Oil & Gas (Alberta) Ltd. (hereinafter referred to as “Deep Well Alberta”), a 100% wholly owned subsidiary company of Deep Well, was incorporated in the province of Alberta, Canada.~~ Deep Well Alberta was incorporated in order to hold Deep Well’s Canadian oil sands leases, which it acquired on August 18, 2004, other than the oil sands leases already held by Northern. At the time, Deep Well owned 100% of the common shares of Northern but not the preferred shares of Northern.

On ~~September 21, 2005, Signet was granted~~April 4, 2007, Deep Well acquired the remaining preferred shares of Northern not already owned by it, resulting in Northern becoming a permit by the Energy Resources Conservation Board (hereinafter referred to as the “ERCB”) for a test well, and on September 28, 2005, Signet began drilling our first well 1-36-091-13W5 (hereinafter referred to as “1-36”) at Sawn Lake, Alberta Canada. Signet did not spud the first well by the 25th100% wholly owned subsidiary of ~~September 2005 and we noted them in default of the Farmout Agreement.~~Deep Well.

In October 2005, the ERCB granted our farmout partner and operator, Signet, an amendment to the original test well permit at Sawn Lake, Alberta Canada, to proceed with the drilling of our first well of our Sawn Lake Project.

On November 15, 2005, as part of the settlement of the litigation as described in this report, we agreed to amend the Farmout Agreement signed on February 25, 2005 between our Company and Surge that had previously been terminated by Deep Well (as previously disclosed on Form 8-K on September 29, 2005). The amendments to the agreement provided that: 1.) all conditions of the Farmout Agreement will be deemed to have been satisfied on September 25, 2005; 2.) the earning period (the period during which Signet has to drill 10 wells) under the agreement will be extended until February 25, 2008; 3.) Signet will have until September 25, 2006 to drill an option well (the second well); 4.) an additional 6.5 sections of land will be added to the land subject to the agreement; 5.) Signet will pay Deep Well $1,000,000 on November 15, 2005 in satisfaction of the prospect fee outstanding instead of after drilling the second well as stated in the Farmout Agreement; and 6.) no shares of Surge US will be issued to Deep Well or Northern, instead we will receive 7,550,000 common shares of Signet, a private subsidiary company of Surge US.

On July 17, 2006, Signet had received the required licenses by the Government of Alberta to drill the next 3 horizontal wells in the Bluesky Formation of the Sawn Lake Heavy oil sands project. The next 3 wells drilled were within less than one mile (1.6 km) of the first test well that was already drilled. These surface locations were 4-32-091-12W5 (hereinafter referred to as “4-32”), 7-30-091-12W5 (hereinafter referred to as “7-30”) and 13-29-091-12W5 (hereinafter referred to as “13-29”). Seismic and reservoir mapping were undertaken to be used to support and progress work on near and long-term plans of development for the Sawn Lake heavy oil project. For further information on drilling and results see “Present Activities” under Item 2 “Oil and Gas Properties” herein described in this report.

In October 2006, the 4-32 and 7-30 wells along with the 1-36 well were suspended. Signet had undertaken a mapping of the reservoir to assist in its delineation for any future development of the Sawn Lake property. The first three wells were drilled in the most heavily documented portion of the Sawn Lake lands. Although, as indicated by Signet, the preliminary results from the last 2 wells indicated a lack of cold flow production from well 4-32 and 7-30, the compartmentalized nature of the reservoir and varying characteristics of these compartments may show different results with further evaluation. Our Company felt that the level of testing on these wells to determine their complete potential was deficient.

On September 11, 2007, we exercised our dissenting rights at Signet’s special meeting of shareholder's held in Calgary, Alberta with respect to the amalgamation between Signet and Andora. Our Company reserved its right to file a Notice of Motion with the Court of Queen’s Bench of Alberta, Canada as a step towards enforcing our rights to dissent. On November 19, 2008, we entered into an arrangement whereby ~~Deep Well’s subsidiaries,~~ Deep Well Alberta and Northern exchanged their 755,000 and 6,795,000 common shares of Signet, respectively, into 224,156 and 2,017,402 common shares of Andora, respectively.

~~On November 26, 2007, we entered into mediation with Signet and resolved~~ Andora is our ~~differences and certain collateral matters. The settlement included but is not limited to:~~

~~the Farmout Agreement dated February 25, 2005, being effectively terminated concurrently with the execution of the settlement agreement; and~~

~~Signet being regarded as having earned the two sections on which the option wells were drilled and 4 additional sections as set out~~joint venture partner in ~~the Settlement; and~~

~~Signet being required to reconvey registered title to 57.5 unearned sections of the Farmout Lands, as defined in the Farmout Agreement, back to us; and~~

~~our Company having the right to retest, at no cost to Signet, the option wells previously drilled.~~

On March 18, 2008, the 6.5 section oil sands permit, which was originally scheduled to expire on April 9, 2008, was extended for one year pursuant to an application submitted by Northern to the Alberta Department of Energy .

~~On September 10, 2008, the ERCB granted us well licenses to drill 6 wells on~~ our Sawn Lake oil sands ~~properties.~~

On December 1, 2008, in conjunction with our 2008/2009 winter drilling program, we acquired 2 vertical wells and existing road infrastructure from Paramount Resources Ltd. (“Paramount”) through a transfer of title. These existing roads total 12km of access on our Sawn Lake property and 1 of the wells was subsequently transferred to our oil sands lease.

~~On February 1, 2009, Northern acquired another existing access road on our Sawn Lake properties from Penn West Petroleum Ltd., adding 8.7 km of roads to its Sawn Lake infrastructure.~~

On April 30, 2009, the Alberta Department of Energy approved our application to convert 5 sections of our ~~5-year~~ oil sands permit to a 15-year primary lease.

~~In September of 2009,~~ By drilling on these lands where the permits were set to expire, we ~~submitted~~have preserved title to 5 sections and now have a primary lease, which is valid for an application (hereinafter referred to as the “CSS Application”) to the ERCB for a commercial bitumen recovery scheme to evaluate the 12-14-092-13W5 well for potential development using Cyclic Steam Stimulation (“CSS”), and later we added the 6-22-092-13W5 well to the application.

On October 14, 2010, our CSS Application was approved by the ERCB to conduct one CSS production test on one of the wells to evaluate the oil sands resource using this secondary recovery technology. The Company has appointed Asher Engineering Ltd. to manage the CSS project and construction, including procurement of all required equipment. The CSS process involves steam injection into a well for a period of up to 30 days, potentially a ”soaking” period, followed by production of heavy oil for up to 50 days or more. This CSS production test is not only for the production of heavy oil from the Blue Sky zone of the Sawn Lake project but it will also aid in quantifying proven reserves of oil.

On November 9, 2010 we secured two private placement financings for $2,050,000. The Company intends to use the majority of the net proceeds from the private placements to conduct engineering, construction and other operations for its recently approved CSS production test.additional 15 years.

Currently, Deep Well, ~~and~~through its subsidiaries, Northern and Deep Well Alberta, ~~have~~has an 80% working interest in 56 contiguous sections ofon seven oil sands ~~development~~ leases where we are the operator, and a 40% working interest in an additional 12 contiguous sections ofon two oil sands ~~development~~ leases in the Peace River oil sands area of Alberta, Canada. ~~Our~~These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares) with Deep Well having 31,376 net acres (12,698 net hectares). The focus of our Company’s operations is to define the heavy oil reservoir to establish reserves and to determine the best technology under which oil can be produced from the Sawn Lake project in order to initiate production and generate a cash flow.

At this time, our primary interest is the exploration for and production of oil in the Peace River oil sands area located in North Central Alberta, Canada. We are engaged in the identification, acquisition, exploration and development of oil &and gas prospects. Our immediate focus is the oil sands leases we hold in the Peace River oil sands area. Our main objective is to develop our existing oil sands ~~land~~lease holdings as well as identify and develop other commercially viable oil &and gas properties. Exploration and development for commercially viable production of any oil and gas company includes a high degree of risk which careful evaluation, experience and factual knowledge may not eliminate. Currently we have no production from our properties.

Sawn Lake Project – Peace River Oil Sands, Alberta, Canada

Currently, Deep Well, through its subsidiaries, Northern and Deep Well Alberta, has an 80% working interest in 56 contiguous sections on seven oil sands leases where we are the operator, and a 40% working interest in an additional 12 contiguous sections on two oil sands leases in the Peace River oil sands area of Alberta, Canada. These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares) with Deep Well having 31,376 net acres (12,698 net hectares). The focus of our Company’s operations is to define the heavy oil reservoir to establish reserves and to determine the best technology under which oil can be produced from our Sawn Lake project in order to initiate production and generate positive cash flow.

Previously, we successfully completed a drilling program and drilled six vertical wells. In addition, we have a working interest in three horizontal wells, which were previously drilled by our former farmout partner under our Farmout Agreement dated February 25, 2005, and an interest in two wells that we acquired. Since then we have been evaluating the options for production available to us to determine the preferable course of action. Drilling on 80% owned lands has opened new avenues for testing and further development of our Sawn Lake project. We are currently working with an independent reservoir engineering company to prepare a reservoir modeling stimulation study to determine the optimum method for us to develop our reservoir. Following this reservoir model evaluation it is anticipated that we will develop a thermal pilot project on our properties followed by a commercial expansion project.

Market and Distribution of Product

We anticipate our principal target market to be refiners, remarketers and other companies, some of which have pipeline facilities near our properties. In the event pipeline facilities are not conveniently available, we intend to truck our oil to alternative storage, refining or pipeline facilities. In such a case, if our production ~~was~~were enough to justify our own pipeline facilities we would consider building ~~them.~~the necessary additional pipeline facilities.

We intend to sell our oil and gas production under both short-term (less than one year) and long-term (one year or more) agreements at prices negotiated with third parties. Under both short-term and long-term contracts, typically either the entire contract (in the case of short-term contracts) or the price provisions of the contract (in the case of long-term contracts) are renegotiated ~~inintervals~~in intervals ranging in frequency from daily to annual. At this time we have no production and therefore no short-term or long-term contracts. We will adopt specific sales and marketing plans once production is achieved.

Market pricing for bitumen is seasonal, with lower prices in and around the calendar year-end being the norm due to lower demand for asphalt and other bitumen-derived products. By necessity, bitumen is regularly blended with diluent in order to facilitate its transportation ~~via pipeline~~through pipelines to North American markets. As such, the effective field price for bitumen is also directly impacted by the input cost of the diluent required, the demand and price of which is also seasonal in nature (higher in winter as colder temperatures necessitate more diluent for transportation). Consequently, bitumen pricing is ~~notoriously weak~~usually weakest in and around December 31 and not reflective of the annual average realized price or the economics of the “business” overall. We have been advised that, to price bitumen, marketers apply formulas that take as a reference point the prices published for crude oil of particular qualities such as “Western Canadian Select”, “Brent Crude Oil”, “Crude Bitumen 9 API Plant Gate”, “Edmonton light”, “Lloydminster blend”, or the more internationally known “West Texas Intermediate” (hereinafter referred to as “WTI”). We also understand that the price of bitumen fluctuates widely during the course of a year, with the lowest prices typically occurring at the end of the calendar year because of decreased seasonal demand for asphalt and other bitumen-derived products coupled with higher prices for diluents added to facilitate pipeline transportation of bitumen.

The price of oil and natural gas sold is determined by negotiation between buyers and sellers. An order from the National Energy Board (hereinafter referred to as “NEB”) is required for oil and gas exports from Canada. The NEB is a federal agency which was formed in 1959 by the Parliament of Canada to regulate oil, gas and electric utility industries. The NEB monitors the supply and demand of oil, as it does with natural gas, to ensure quantities exported do not exceed the surplus remaining after Canadian requirements have been met. Any oil export to be made pursuant to an export contract ~~of longer than one year in the case of light crude, and two years in the case of heavy crude,~~that exceeds a certain duration or quantity requires an exporter to obtain ~~an export license~~authorization from the NEB. ~~The issue of such a license requires the approval of the Government of Canada.~~ Natural gas exported from Canada is also subject to similar regulation by the NEB. Natural gas exports for a term of less than two years, or for a term of two to twenty years in quantities of not more than 20,000 mcf per day, must be made pursuant to an NEB order. Any natural gas exports to be made pursuant to a contract of larger duration (to a maximum of 25 years) or in larger quantities require an exporter to obtain a license from the NEB, which requires the approval of the Government of Canada. Exporters are free to negotiate prices and other terms with purchasers provided that the export contracts meet certain criteria prescribed by the NEB. The government of Alberta also regulates the volume of natural gas, which may be removed from the province for consumption elsewhere based on such factors as reserve availability, transportation arrangements and market considerations.

Competitive Business Conditions

We operate in a highly competitive environment, competing with major integrated and independent energy companies for desirable oil and natural gas properties as well as for the equipment, labour and materials required to develop and operate those properties. Many of our competitors have longer operating histories and substantially greater financial and other resources greater than ours. Many of these companies not only explore for and produce crude oil and natural gas, but also carry on refining operations and market petroleum and other products on a worldwide basis. Our larger competitors, by reason of their size and relative financial strength, can more easily access capital markets than we can and may enjoy a competitive advantage, whereas we may incur higher costs or be unable to acquire and develop desirable properties at costs we consider reasonable because of this competition. Larger competitors may be able to absorb the burden of any changes in laws and regulation in the jurisdictions in which we do business and handle longer periods of reduced prices of gas and oil more easily than we can. Our competitors may be able to pay more for productive oil and natural gas properties and may be able to define, evaluate, bid for and purchase a greater number of properties and prospects than we can. Our ability to acquire additional properties in the future will depend upon our ability to conduct efficient operations, evaluate and select suitable properties, implement advanced technologies and consummate transactions in a highly competitive environment.

Competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the government of Canada and other countries as well as factors that we cannot control, including international political conditions, overall levels of supply and demand for oil and gas, and the markets for synthetic fuels and alternative energy sources.

As we remain in the exploration stage, we have not yet generated any revenues from production, nor do we have any customers at this time. We anticipate our principal target customers to be refiners, remarketers and other companies.

Through the acquisition of Northern, ~~our Company~~we became a party to the following royalty agreement:

On December 12, 2003, Nearshore Petroleum Corporation (hereinafter referred to as “Nearshore”) entered into a ~~Royalty Agreement~~royalty agreement with Mikwec Energy Canada, Ltd. (now known as Northern) that potentially encumbers 6six oil sands ~~development~~ leases covering ~~23,406~~23,405 gross acres (9,472 gross hectares) located within our Sawn Lake properties (hereinafter the “Royalty Agreement”). Nearshore claimed a 6.5% gross overriding royalty from Northern on the leased substances on the land interests which Northern holds in the above 6six oil sands leases. Nearshore was a private corporation incorporated in Alberta, Canada, and was owned and controlled by Mr. Steven P. Gawne and his wife, Mrs. Rebekah J. Gawne, who each owned 50% of Nearshore. Mr. Steven P. Gawne was formerly the President, Chief Executive Officer and Director of Deep Well from February 6, 2004 to June 29, 2005. ~~Part~~Nearshore has purportedly transferred part or all of this Royalty Agreement ~~has been purportedly transferred by Nearshore~~ to other parties.

On February 28, 2005, Deep Well, Northern and Surge Global Energy, Inc. and Signet (collectively “Surge” now known as Andora) agreed that ~~the~~our Company would be responsible for the portion of the claimed 6.5% royalty payable by Surge, if any, on lands earned under the February 25, 2005 Farmout Agreement. This liability could arise by virtue of a ~~royalty agreement~~Royalty Agreement between Northern and Nearshore dated December 12, 2003. This obligation of our Company was further modified on November 26, 2007, where it was agreed that ~~the~~our Company would not be liable or obligated to pay any of this claimed portion of the royalty due, if any, on the portion of the royalty acquired by Andora.

Government Approval and Crown Royalties

Exploration and Production. Our operations are subject to Canadian federal and provincial governmental regulations. Such regulations include: requiring approval and licenses for the drilling of wells, regulating the location of wells and the method and ability to produce wells, surface usage and the restoration of land upon which wells have been drilled, the plugging and abandoning of wells and the transportation of production from wells. Our operations are also subject to various conservation regulations, including the regulation of in-situ recovery processes, the size of spacing units, the number of wells which may be drilled in a unit, the unitization or pooling of oil and gas properties, the rate of production allowable from oil and gas wells, and the ability to produce oil and gas.

The North American Free Trade Agreement. The North American Free Trade Agreement (hereinafter referred to as “NAFTA”) grants Canada the freedom to determine whether exports to the United States or Mexico will be allowed. In making this determination, Canada must ensure that any export restrictions do not (i) reduce the proportion of energy exported relative to the supply of the energy resource; (ii) impose an export price higher than the domestic price; or (iii) disrupt normal channels of supply. All parties to NAFTA are also prohibited from imposing minimum export or import price requirements.

Investment Canada Act. The Investment Canada Act requires notification and/or review by the Government of Canada in certain cases, including but not limited to, the acquisition of control of a Canadian Business by a non-Canadian. In certain circumstances, the acquisition of a working interest in a property ~~which~~that contains recoverable reserves will be treated as the acquisition of an interest in a “business” and may be subject to either notification or review, depending on the size of the interest being acquired and the asset size of the business.

Crown Royalties and Incentives. Each province and the federal government of Canada have legislation and regulations governing land tenure, royalties, production rates and taxes, environmental protection and other matters under their respective jurisdictions. The royalty regime is a significant factor in the profitability of oil and natural gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production with the royalty rate dependent in part upon prescribed reference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the governments of Canada and Alberta have established incentive programs such as royalty rate reductions, royalty holidays, tax credits and ~~more recently~~ drilling royalty credits and a new well incentive program, which provides a maximum five percent royalty rate for all new wells that begin producing conventional oil and natural gas between April 1, 2009 and March 31, 2011.credits. These incentives are for the purpose of encouraging oil and natural gas exploration or enhanced recovery projects. These incentives generally increase cash flow.

Effective January 1, 2009, oil sands royalties in Alberta are calculated using a sliding scale for royalty rates ranging from 1% to 9% pre-payout and 25% to 40% post-payout depending on the world oil price. Project “payout” refers to the point in which we earn sufficient revenues to recover all of the allowed costs for the project plus a return allowance. The base royalty starts at 1% and increases for every dollar the world oil price, as reflected by the ~~West Texas Intermediate (hereinafter referred to as “WTI”),~~WTI, is priced above $55 per barrel, to a maximum of 9% when oil is priced at $120 per barrel or greater. The net royalty starts at 25% and increases for every dollar oil is priced above $55 per barrel to 40% when oil is priced at $120 or higher.

Research and Development

We had no material scientific research and development costs for the fiscal years ended September 30, 2011, 2010 ~~2009~~ and ~~2008.~~2009.

Environmental Laws and Regulations

The oil and natural gas industry is subject to environmental laws and regulations pursuant to Canadian local, provincial and federal legislation. Environmental legislation provides for restrictions and prohibitions on releases or emissions of various substances produced or utilized in association with certain oil and gas industry operations. In addition, legislation requires that well and facility sites be monitored, abandoned and reclaimed to the satisfaction of provincial authorities. A breach of such legislation may result in the imposition of fines and penalties. Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages as well as administrative, civil and criminal penalties. Accordingly, we could be liable or could be required to cease production on properties if environmental damage occurs. Although we maintain insurance coverage, the costs of complying with environmental laws and regulations in the future may harm our business. Furthermore, future changes in environmental laws and regulations could occur that result in stricter standards and enforcement, larger fines and liability, and increased capital expenditures and operating costs, any of which could have a material adverse effect on our financial condition or results of operations. We maintain commercial property and general liability insurance coverage on the properties we operate. We also maintain operators extra expense insurance which provides coverage for well control incidents specifically relating to regaining control of a well, seepage, pollution, clean-up and containment. No coverage is maintained with respect to any fine or penalty required to be paid due to a violation of the regulations set out by the federal and provincial regulatory authorities. We are committed to meeting our responsibilities to protect the environment and anticipate making increased expenditures of both a capital and expense nature as a result of the increasingly stringent laws relating to the protection of the environment.

Alberta’s new climate change regulation, effective July 1, 2007, requires Alberta facilities that emit more than 100,000 tonnes of greenhouse gases a year to reduce emissions intensity by 12 per cent. Companies have four choices to meet their reductions: 1.) they can make operating improvements to their operations that will result in greenhouse gas emission reductions; 2.) purchase Alberta based offset credits; 3.) contribute to the Climate Change and Emissions Management Fund; and 4.) purchase or use emission performance credits, also called EPCs, these credits are generated by facilities that have gone beyond the 12% mandatory intensity reduction. EPCs can be banked for future use or sold to other facilities that need to meet the reduction target.

On June 18, 2009, the Canadian government passed the new Environmental Enforcement Act (“EEA”). The EEA was created to strengthen and amend nine existing Statutes that relate to the environment and to enact provisions respecting the enforcement of certain Statutes that relate to the environment. The EEA amends various enforcement, offence, penalty and sentencing provisions to deter offenders from committing offences under the EEA by setting minimum and maximum fines for serious offences. The EEA also gives enforcement officers new powers to investigate cases and grants courts new sentencing authorities that ensure penalties reflect the seriousness of the pollution and wildlife offences. The EEA also expands the authority to deal with environmental offenders by: 1.) specifying aggravating factors such as causing damage to wildlife or wildlife habitat, or causing damage that is extensive, persistent or irreparable; 2.) providing fine ranges that are higher for corporate offenders than for individuals; 3.) doubling fine ranges for repeat offenders; 4.) authorizing the suspension and cancellation of licenses, permits or other authorizations upon conviction; 5.) requiring corporate offenders to report convictions to shareholders; and 6.) mandating the reporting of corporate offences on a public registry.

Our Company currently has two prime subcontractors and three full-time employees. For further information on our subcontractors see “Compensation Arrangements for Executive Officers” under Item 11 “Executive Compensation”. We expect to hire from time to time more employees, independent consultants, and contractors during the stages of implementing our plans.

ITEM 1A.

RISK FACTORS

An investment in our common stock is speculative and involves a high degree of risk and uncertainty. You should carefully consider the risks described below, together with the other information contained in our reports filed with the SEC, including the consolidated financial statements and notes thereto of our Company before deciding to invest in our common stock. The risks described below are not the only ones facing our Company. Additional risks not presently known to us, or that we presently consider immaterial may also adversely affect our Company. If any of the following risks occur, our business, financial condition and results of operations and the value of our common stock could be materially and adversely affected.

Any Development ofOf Our Resources Will Be Subject To Crown Royalties. The royalty regime of Alberta is a significant factor in the profitability of oil and natural gas production in Alberta, Canada. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production with the royalty rate dependent in part upon prescribed reference prices, well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the governments of Canada and Alberta have established incentive programs such as royalty rate reductions, royalty holidays, tax credits, ~~and more recently~~ drilling royalty credits and ~~a new~~ well incentive ~~program, which provides a maximum five percent royalty rate for all new wells that begin producing conventional oil and natural gas between April 1, 2009 and March 31, 2011.~~programs. These incentives are for the purpose of encouraging oil and natural gas exploration or enhanced recovery projects. These incentives generally increase cash flow. Penalties and interest may be charged to us if we fail to remit royalties on our production to the Crown as prescribed in the regulation.

We Are An Exploration Stage Company Implementing A New Business Plan. We are an exploration stage Company with only a limited operating history upon which to base an evaluation of our current business and future prospects, and we have just begun to implement our business plan. Since our inception, we have suffered recurring losses from operations and have been dependent on new investment to sustain our operations. During the years ended September 30, ~~2010, 2009~~2011 and ~~2008~~2010 we reported net losses of $1,1,689,351and $1,331,552 ~~$2,167,343 and $2,796,055~~ respectively.

The Successful Implementation Of Our Business Plan Is Subject To Risks Inherent In The Heavy Oil Business. Our heavy oil operations are subject to the economic risks typically associated with exploration, development and production activities, including the necessity of significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the cost and timing of drilling, completing and operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and production activities to be unsuccessful. This could result in a total loss of our investment in a particular property. If exploration efforts are unsuccessful in establishing proven reserves and exploration activities cease, the amounts accumulated as unproven costs will be charged against earnings as impairments. Our exploitation and development of oil and gas reserves depends upon access to the areas where our operations are to be conducted. We conduct a portion of our operations in regions where we are only able to do so on a seasonal basis. Unless the surface is sufficiently frozen, we are unable to access our properties, drill or otherwise conduct our operations as planned. In addition, if the surface thaws earlier than expected, we must cease our operations for the season earlier than planned. Our operations are affected by road bans imposed from time to time during the break-up and thaw period in the ~~Spring.~~spring. Road bans are also imposed due to spring-break up, heavy rain, mud, rock slides and periods of high water, which can restrict access to our well sites and potential production facility sites. Our inability to access our properties or to conduct our operations as planned will result in a shutdown or slow down of our operations, which will adversely affect our business.

We Rely On Independent Experts And Technical Or Operational Service Providers Over Whom We May Have Limited Control. The success of our business is dependent upon the efforts of various third parties that we do not control. We rely upon various companies to assist us in identifying desirable oil prospects to acquire and to provide us with technical assistance and services. We also rely upon the services of geologists, geophysicists, chemists, engineers and other scientists to explore and analyze oil prospects to determine a method in which the oil prospects may be developed in a cost-effective manner. In addition, we rely upon the owners and operators of oil drilling equipment to drill and develop our prospects to production. Although we have developed relationships with a number of third-party service providers, we cannot assure that we will be able to continue to rely on such persons. If any of these relationships with third-party service providers are terminated or are unavailable on commercially acceptable terms, we may not be able to execute our business plan. Our limited control over the activities and business practices of these third parties, any inability on our part to maintain satisfactory commercial relationships with them or their failure to provide quality services could materially and adversely affect our business, results of operations and financial condition.

Our Interests Are Held In The Form Of Leases That We May Be Unable To Retain. Our ~~Swan~~Sawn Lake property is held under leases and working interests in leases. These leases we are a party to are for a fixed term of 15 years, but contain a provision that allows us to extend the term of the lease so long as we meet the minimum level of evaluation as set out by the Government of Alberta tenure guidelines. If we or the holder of a lease fails to meet the specific requirements of the lease regarding delay or non-payment of rental payments or we or the holder of the lease fail to meet the minimum level of evaluation some or all of our leases may terminate or expire. There can be no assurance that any of the obligations required to maintain each lease will be met. The termination or expiration of our leases or the working interests relating to leases may reduce our opportunity to exploit a given prospect for oil production and thus have a material adverse effect on our business, results of operations and financial condition.

We Expect Our Operating Expenses To Increase Substantially In The Future And We May Need To Raise Additional Funds. We have a history of net losses and expect that our operating expenses will increase substantially over the next 12 months as we continue to implement our business plan. In addition, we may experience a material decrease in liquidity due to unforeseen capital calls or other events and uncertainties. As a result, we may need to raise additional funds, and such funds may not be available on favourable terms, if at all. If we cannot raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, results of operations and financial ~~condition..~~condition.

Our Ability To Produce Sufficient Quantities Of Oil From Our Properties May Be Adversely Affected By A Number Of Factors Outside Of Our Control. The business of exploring for and producing oil and gas involves a substantial risk of investment loss. Drilling oil wells involves the risk that the wells may be unproductive or that, although productive, the wells may not produce oil in economic quantities. Other hazards such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic due to pressure depletion, water encroachment, mechanical difficulties, etc., which impair or prevent the production of oil and/or gas from the well. There can be no assurance that oil will be produced from the properties in which we have interests. Marketability of any oil that we acquire or discover may be influenced by numerous factors beyond our control. The marketability of our production will depend on the proximity of our reserves to and the capacity of, third party facilities and services, including oil and natural gas gathering systems, pipelines, trucking or terminal facilities, and processing facilities. The unavailability or insufficient capacity of these facilities and services could force us to shut-in producing wells, delay the commencement of production, or discontinue development plans for some of our properties, which would adversely affect our financial condition and performance. There may be periods of time when pipeline capacity is inadequate to meet our oil transportation needs. During periods when pipeline capacity is inadequate, we may be forced to reduce production or incur additional expense as existing production is compressed to fit into existing pipelines. Other risk factors include availability of drilling and related equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. We cannot predict how these factors may affect our business.

We Do Not Control All Of Our Operations. We do not operate all of our properties and we therefore have limited influence over the testing, drilling and production operations of those properties. Andora currently operates 12 of our 68 ~~oil~~ sections in which we have a working interest. Currently, ~~our Company~~Deep Well, through its subsidiaries, Northern and Deep Well Alberta, has an 80% working interest in 56 contiguous sections ofon seven oil sands ~~development~~ leases where we are the operator, and a 40% working interest in an additional 12 contiguous sections ofon two oil sands ~~development~~ leases that Andora operates. These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares) with Deep Well having 31,376 net acres (12,698 net hectares). All nine oil sands leases are located in the Peace River oil sands area of Alberta, Canada. ~~Our oil sands leases cover 43,015 gross acres (17,408 gross hectares).~~ Our lack of control of the 12 sections Andora currently operates could result in the following:

Andora might initiate exploration or development on a faster or slower pace than we prefer;

Andora might propose to drill more wells or build more facilities on a project than we have funds for or that we deem appropriate, which could mean that we are unable to participate in the project or share in the revenues generated by the project;

If Andora refuses to initiate a project on these 12 sections, we might be unable to pursue the project.

Any of these events could materially reduce the value of those properties affected.

We Are Party To Some Lawsuits And Will Be Adversely Affected If We Are Found To Be Liable In Connection With Any Legal Proceedings. We are party to some lawsuits described in this annual report Form 10-K under the heading “Legal Proceedings”. We intend to vigorously defend ourselves against the claims made in the lawsuits, ~~but~~and while we believe that the likelihood of an adverse outcome is remote we cannot predict the outcome of these proceedings, the commencement or outcome of any future proceedings against us, or whether any such proceeding would lead to monetary damages that would have a material adverse effect on our financial position.

Aboriginal Peoples May Make Claims Regarding The Lands On Which Our Operations Are Conducted. Aboriginal peoples have claimed aboriginal title and rights to a substantial portion of western Canada. Since aboriginal peoples have filed a claim claiming aboriginal title or rights to the lands on which some of our properties are located, and if such a claim is successful, it could have a material adverse effect on our operations.

The ~~ERCB~~Energy Resources Conservation Board (hereinafter referred to as “the ERCB”) governs our operations in Alberta, Canada and they have implemented a new directive (Directive 056) that the Alberta Government issued its First Nations Consultation Policy on Land Management and Resource Development on May 16, 2005. The ERCB expects that all industry applicants must adhere to this policy and the consultation guidelines. These requirements and expectations apply to the licensing of all new energy developments and all modifications to existing energy developments, as covered in Directive 056. In the policy, the Alberta Government has developed consultation guidelines to address specific questions about how consultation for land management and resource development should occur in relation to specific activities. Prior to filing an application, the applicant must address all questions, objections, and concerns regarding the proposed development project and attempt to resolve them. This includes concerns and objections raised by members of the public, industry, government representatives, First Nations, Métis, and other interested parties. This process can cause significant delays in obtaining a drilling permit for exploration and/or a production well license for both oil and gas.

Our Operations Are Subject To A Wide Range of Environmental Legislation and Regulation From All Levels Of Government Of Which We Have No Control. Environmental legislation imposes, among other things, restrictions, liabilities and obligations in connection with the generation, handling, storage, transportation, treatment and disposal of hazardous substances and waste and in connection with spills, releases and emissions of various substances to the environment. As well, environmental regulations are imposed on the qualities and compositions of the products sold and imported. Environmental legislation also requires that wells, facility sites and other properties associated with our operations be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. In addition, certain types of operations, including exploration and development projects and significant changes to certain existing projects, may require the submission and approval of environmental impact assessments. Compliance with environmental legislation can require significant expenditures, and failure to comply with environmental legislation may result in the imposition of fines and penalties and liability for clean up costs and damages. We cannot assure that the costs of complying with environmental legislation in the future will not have a material adverse effect on our financial condition or results of operations. We anticipate that changes in environmental legislation may require, among other things, reductions in emissions to the air from its operations and result in increased capital expenditures. Future changes in environmental legislation could occur and result in stricter standards and enforcement, larger fines and liability, and increased capital expenditures and operating costs, which could have a material adverse effect on our results of operations and financial ~~condition..~~condition.

Market Fluctuations In The Prices Of Oil Could Adversely Affect Our Business. Prices for oil tend to fluctuate significantly in response to factors beyond our control. These factors include, but are not limited to, the continued threat of war in the Middle East and actions of the Organization of Petroleum Exporting Countries and its maintenance of production constraints, the U.S. economic environment, weather conditions, the availability of alternate fuel sources, transportation interruption, the impact of drilling levels on crude oil and natural gas supply, and the environmental and access issues that could limit future drilling activities for the industry.

Changes in commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our ability to estimate the value of producing properties for acquisition and divestiture and often cause disruption in the market for oil producing properties, as buyers and sellers have difficulty agreeing on the value of the properties. Price volatility also makes it difficult to budget for and project the return on acquisitions and development and exploitation of projects. We expect that commodity prices will continue to fluctuate significantly in the future.

Our Stock Price Could Decline. Our common stock is traded on the OTCQB marketplace. There can be no assurance that an active public market will continue for ~~the~~our common stock or that the market price for ~~the~~our common stock will not decline below its current price. Such price may be influenced by many factors, including but not limited to, investor perception of us and our industry and general economic and market conditions. The trading price of ~~the~~our common stock could be subject to wide fluctuations in response to announcements of our business developments or our competitors, quarterly variations in operating results, and other events or factors. In addition, stock markets have experienced extreme price volatility in recent years. This volatility has had a substantial effect on the market prices of companies, at times for reasons unrelated to their operating performance. Such broad market fluctuations may adversely affect the price of our common stock. Our stock price may decline as a result of future sales of our shares or the perception that such sales may occur.

We Could Be Subject toTo SEC Penalties If We Do Not File All Of Our SEC Reports. Although we are presently up to date in our filings, in the past we have not filed all of our annual and quarterly reports required to be filed by us with the SEC, in a timely manner. It is possible that the SEC could take enforcement action against us, including potentially the de-registration of our securities, if we fail to file our annual and quarterly reports in a timely manner as required by the SEC. If the SEC were to take any such actions, it could adversely affect the liquidity of trading in our common stock and the amount of information about our Company that is publicly available.

Broker-Dealers Are Not Permitted To Solicit Trades In Our Common Stock. Our common stock is considered to be a “penny stock” because it meets one or more of the definitions of “penny stock” in the Exchange Act Rule 3a51-1. The principal result or effect of being designated a “penny stock” is that securities broker-dealers cannot recommend the stock and may only trade in it on an unsolicited basis.

Risks Related toTo Broker-Dealer Requirements Involving Penny Stocks / Risks Affecting Trading and Liquidity. Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor’s account. These rules may have the effect of reducing the level of trading activity in the secondary market, if and when one develops.

Potential investors in our common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be “penny stock.” Moreover, SEC Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Pursuant to the Penny Stock Reform Act of 1990, broker-dealers are further obligated to provide customers with monthly account statements. Compliance with the foregoing requirements may make it more difficult for investors in our stock to resell their shares to third parties or to alternatively dispose of them in the market or otherwise.

~~ITEM 1B.~~

ITEM 1B. UNRESOLVED STAFF COMMENTS

~~ITEM 2.~~

ITEM 2. PROPERTIES

We lease and maintain office space in Edmonton, Alberta for corporate and administrative operations; the lease expires on December 31, 2013. We also lease and maintain office space in Calgary, Alberta; this lease expires on November 30, 2012.

Oil and Gas Properties

Currently, ~~we own~~Deep Well, through its subsidiaries, Northern and Deep Well Alberta, has an 80% working interest in 56 contiguous sections ofon seven oil sands ~~development~~ leases, and a 40% working interest in an additional 12 contiguous sections ofon two oil sands leases in the Peace River oil sands area ~~in North Central Alberta. The~~of Alberta, Canada. These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares). Of the 68 contiguous sections ofon nine oil sands leases, Andora is the operator of 12 sections on two oil sands leases in which we have a 40% working interest, and we are the operator on 56 sections on seven leases where we have an 80% working interest.

In conjunction with our 2008/2009 winter drilling program, and effective December 1, 2008, we acquired 12 km of existing road infrastructure from Paramount Resources Ltd. (hereinafter referred to as “Paramount”) through a transfer of title. Along with this transfer of title we acquired 2 vertical wells, 1 of which is located on our Sawn Lake oil sands lease and the other located approximately 2.5 miles north of our Sawn Lake oil sands lease.

~~Effective February 1, 2009, we also acquired from Penn West Petroleum Ltd. an LOC that totalled 8.7 km of an existing road on our Sawn Lake property.~~

On April 30, 2009, the Alberta Department of Energy approved our application to convert 5 sections of our oil sands permit to a 15-year primary lease. By drilling on these lands where the permits were set to expire, we have preserved title to 5 sections and now have a primary lease, which is valid for an additional 15 years.

The following table summarizes our gross and net developed and undeveloped oil and natural gas rights under lease as of September 30, ~~2010.~~

OIL SANDS RIGHTS as of September 30, 2010

Gross
Hectares

Net
Hectares

Gross
Acres

Net
Acres

Oil Sands Developed Acreage
Sawn Lake – Peace River oil sands area, Alberta, Canada None None None None
Total None None None None

Oil Sands Undeveloped Acreage
Sawn Lake – Peace River oil sands area, Alberta, Canada
56 sections (1)
14,336 11,469 35,425 28,340
12 sections (2)
3,072 1,229 7,591 3,036
Total 17,408 12,698 43,015 31,376

TOTAL HECTARES/ACRES 17,408 12,698 43,015 31,376

(1) 80% working interest.

(2) 40% working interest.

2011.

OIL SANDS RIGHTS as of September 30, 2011
	Gross Hectares		Net Hectares		Gross Acres		Net Acres
Oil Sands Developed Acreage
Sawn Lake – Peace River oil sands area, Alberta, Canada	None		None		None		None
Total	None		None		None		None

Oil Sands Undeveloped Acreage
Sawn Lake – Peace River oil sands area, Alberta, Canada
56 sections (1)		14,336		11,469		35,425		28,340
12 sections (2)		3,072		1,229		7,591		3,036
Total		17,408		12,698		43,015		31,376

TOTAL HECTARES/ACRES		17,408		12,698		43,015		31,376

(1) 80% working interest.

(2) 40% working interest.

A developed acre is considered to mean those acres spaced or assignable to productive wells; a gross acre is an acre in which a working interest is owned, and a net acre is the result that is obtained when fractional ownership working interest is multiplied by gross acres. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof.

Undeveloped acreage is considered to be those lease acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil or natural gas, regardless of whether or not that acreage contains proven reserves, but does not include undrilled acreage held by production under the terms of a lease. As is customary in the oil and gas industry, we can generally retain our interest in undeveloped acreage by drilling activity that establishes commercial production sufficient to maintain the leases, or by paying delay rentals during the remaining primary term of such a lease. The oil ~~and natural gas~~sands leases in which we have an interest are for ~~varying~~a primary ~~terms,~~term of 15 years, and if ~~production continues from our developed lease acreage~~we meet the minimum level of evaluation as set out by the Alberta Government oil sands tenure guidelines we can continue these leases beyond ~~the~~their primary term ~~we are entitled to hold the lease~~ for ~~as long as oil or natural gas is produced.~~an indefinite period.

Reserves, Production and Delivery Commitments

We did not engage in any sustained production activities during the years ending September 30, 2011, 2010 ~~2009~~ and ~~2008~~2009 nor did we have any proven ~~or probable~~ reserves at the end of such ~~periods and thus were not required to provide any of the production data required by Statement of Financial Accounting Standards No. 69.~~periods. We do not have any obligations under existing delivery commitment contracts or agreements calling for the provision of fixed and determinable quantities of oil and gas over the next three years, and have therefore not filed any information or reports with any federal authority or agency containing estimates of total, proven developed or undeveloped net oil or gas reserves.

1614

Drilling Activity

The following tables summarize the results of our drilling activities in the ~~Sawn Lake~~Peace River oil sands area of Alberta during the years ended September 30, 2011, 2010 ~~2009~~ and ~~2008.~~2009.

Exploratory Wells

2010

2009

2008

2011

2010

2009

year ended September 30

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gas

–

Oil

–

Oil/Gas

–

Evaluating

–

Drilling at end of year

–

Suspended

–

4.8

Abandoned

–

0.8

Total Exploratory Wells

–

5.6

*80% working interest

Development Wells

2010

2009

2008

2011

2010

2009

year ended September 30

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gross

Net

Gas

–

Oil

–

Oil/Gas

–

Evaluating

–

Drilling at end of year

–

Suspended

–

4.8

–

Abandoned

–

0.8

–

Total Development Wells

–

5.6

–

*40% working interest

**80% working interest

Present Activities

Currently we have in place a few joint operating agreements with two other joint interest partners to manage our joint oil sands leases, all of which are based on the 1990 Canadian Association of Petroleum Landmen (“CAPL”) Operating Procedure. We are currently working with our joint venture partner toward developing a more comprehensive joint operating agreement to govern all of our joint properties. Under these agreements our joint oil sands leases were evaluated seismically, geologically and by drilling to establish the continuity and the distribution of the crude bituminous-bearing Bluesky reservoir zone across our joint lands.

Previously, we entered into a service agreement with an independent engineering and constructors firm to provide project management services to us for our 2008/2009 winter drilling program. During our winter drilling season of 2008/2009 we successfully completed a drilling program and met our objectives by drilling six vertical wells, three of which were drilled on our oil sands permit in order to provide technical data to support the required Alberta Department of Energy regulation to convert our 5-year oil sands permit into a 15-year primary lease. The other three wells were drilled further to the North and continued the delineation of the main reservoir trend and confirmed that the main reservoir continues to the northwest. These wells were drilled to a depth of approximately 700 meters each. Along with the acquisition of road infrastructure on our properties, we acquired a well on our oil sands lease that was previously drilled and cased by an unrelated third party for heavy oil production in the Bluesky reservoir zone. In addition, we have a 40% working interest in three horizontal wells, which were previously drilled by our former farmout partner and are pending further evaluation and the development of an exploitation plan with our joint interest partner Andora. All of our exploratory wells were logged, cored and analyzed by independent service providers and are currently being evaluated for in-situ recovery methods.

In September of 2009, we submitted an application to the ERCB for a commercial bitumen recovery scheme to evaluate one of our wells for potential development using CSS and over a year later in October of 2010, this application was approved by the ERCB. We have since put together a team of reservoir and completions engineers, project management and environmental consultants to assist us with determining the best methods to develop our properties and to embark on a pilot project using in-situ recovery technology. The CSS process involves steam injection into a well for a period of up to 30 days, potentially a “soaking” period, followed by production of heavy oil for up to 50 days or more. This CSS thermal recovery scheme is not only for the production of heavy oil from the Bluesky reservoir zone of our Sawn Lake project but it will also aid in quantifying proven and probable reserves of oil.

In July 2010 and June 2011, it was determined through two separate independent reservoir engineering firms that our exploratory wells have found sufficient quantities of heavy oil in place to justify the completion of our wells for future production. It was also confirmed that our properties are suitable for employing thermal recovery methods on them. In addition, another hydrocarbon bearing zone was identified up-hole from the Bluesky reservoir zone presently being concentrated on by our Company. This secondary heavy oil zone is in the Peace River formation. We intend to continue the development of the larger Bluesky reservoir and at the same time we intend to evaluate this newly discovered reservoir by coring future wells where they insect this zone. In December of 2010 and January of 2011, two separate independent reservoir engineering firms prepared National Instrument 51-101 (a Canadian evaluation engineering standard) compliant resource appraisal reports for one of our joint venture partners. These reports evaluated the resource of some of our Sawn Lake joint properties and included a complete geological and economic evaluation of the oil sands leases in the Sawn Lake area based on using thermal recovery to exploit the resource.

We are currently evaluating the options for production available to us to determine the preferable course of action for our Sawn Lake project. Drilling on 80% owned lands has opened new avenues for testing and further development of our Sawn Lake project. We are currently working with an independent reservoir engineering company to prepare a reservoir modeling stimulation study to determine the optimum method for us to develop our reservoir. Following this reservoir model evaluation, it is anticipated that we will develop a thermal pilot project on our properties, followed by a commercial expansion project. In 2011, we engaged environmental consultants to proceed with the environmental studies mandated by Alberta environmental regulations before we can embark on our proposed thermal pilot project. The development progress of our properties is governed by several factors such as federal and provincial governmental regulations. Long lead times in getting regulatory approval for thermal recovery projects are commonplace in our industry. Road bans, winter access only roads and environmental regulations can and often delay development of our projects. Because of these and other factors, our oil sands project can take significantly longer to complete than regular conventional drilling programs for lighter oil. To date our geological, engineering and economic studies lead us to believe that our working interest can support full profitable commercial production.

Past Activities

On April 26, 2004, Northern (now a 100% owned subsidiary of Deep Well) signed a Joint Operating Agreement with Pan Orient to provide for the manner of conducting operations on three Peace River oil sands leases for a total of 32 sections covering 20,243 gross acres (8,192 gross hectares). The 32 sections were acquired jointly on April 23, 2004, with Northern having an 80% working interest and Pan Orient having a 20% working interest in the joint lands.

On August 18, 2004, Deep Well and Pan Orient jointly participated in a public offering of Crown Oil Sands Rights held by the Alberta Department of Energy, in which the joint parties successfully bid on three Peace River oil sands leases for a total of 31 sections covering 19,610 gross acres (7,936 gross hectares). Deep Well acquired an undivided 80% working interest and Pan Orient acquired an undivided 20% working interest in the joint property.

On December 9, 2004, Deep Well signed Joint Operating Agreements with 1132559 Alberta Ltd. (hereinafter referred to as “1132559”) under which 1132559 acknowledged the terms under which their 10% working interest acquired from Pan Orient in the joint lands acquired on August 18, 2004, would be governed.

On February 25, 2005, as previously disclosed in this annual report on Form 10-K, Deep Well and Northern entered into a Farmout Agreement with Surge. This Farmout Agreement allowed Surge (previously known as Signet and now known as Andora) to earn up to a 40% working interest in the farmout lands (50% of our share). And on November 26, 2007, pursuant to the Minutes of Settlement between us, Andora and Signet, Signet acquired 40% of our working interest in 12 sections on two oil sands leases. As part of the 40% working interest transfer to Signet, two of the original oil sands leases previously acquired on April 26, 2004, were split into four oil sands leases.

On March 3, 2005, Deep Well, Northern and Surge mutually agreed by an amending agreement to extend the payment date of the prospect fee under Article 13 of the Farmout Agreement dated February 25, 2005, whereby Surge was granted an extension for payment of the prospect fee to the closing date of March 18, 2005.

On March 10, 2005, Deep Well, Northern and Surge mutually agreed by an amending agreement that Surge US is only a party to the Farmout Agreement for the purposes of Article 14 of the Farmout Agreement dated February 25, 2005. In addition, all three parties mutually agreed by an amending agreement to establish a procedure whereby Signet is to be appointed as the operator under the existing Joint Operating Agreements in respect of all Farmout Lands in which Signet earns an interest pursuant to Article 7 of the Farmout Agreement dated February 25, 2005.

On July 14, 2005, our Company and Surge mutually agreed to amend the Farmout Agreement dated February 25, 2005 in order to extend the date to spud the first well until September 25, 2005.

On September 21, 2005, Signet was granted a permit by the ERCB for a test well, and on September 28, 2005, Signet began drilling our first well 1-36-091-13W5 (hereinafter referred to as “1-36”) on our Sawn Lake project located in the Peace River oil sands of Alberta, Canada. Signet did not spud the first well by the 25th of September 2005 and we noted them in default of the Farmout Agreement.

On November 15, 2005, as part of a settlement agreement, we agreed to amend the Farmout Agreement signed on February 25, 2005 between our Company and Surge that had previously been terminated by Deep Well (as previously disclosed on Form 8-K on September 29, 2005). The amendments to the agreement provided that: 1.) all current conditions of the Farmout Agreement will be deemed to have been satisfied as at September 25, 2005; 2.) the earning period (the period during which Signet has to drill 10 wells) under the agreement will be extended until February 25, 2008; 3.) Signet will have until September 25, 2006 to drill an option well (the second well); 4.) an additional 6.5 sections of land will be added to the land subject to the agreement; 5.) Signet will pay Deep Well $1,000,000 on November 15, 2005 in satisfaction of the prospect fee outstanding instead of after drilling the second well as stated in the Farmout Agreement; and 6.) no shares of Surge US would be issued to Deep Well or Northern, but rather we would receive 7,550,000 common shares of Signet (now known as Andora), a private subsidiary company of Surge US.

On July 17, 2006, Signet had received the required licenses by the Government of Alberta to drill the next three horizontal wells in the Bluesky Formation of our Sawn Lake oil sands project. The next 3 wells drilled were within less than one mile (1.6 km) of the first test well that was already drilled. These surface locations were 4-32-091-12W5 (hereinafter referred to as “4-32”), 7-30-091-12W5 (hereinafter referred to as “7-30”) and 13-29-091-12W5 (hereinafter referred to as “13-29”). Seismic and reservoir mapping were undertaken to be used to support and progress work on near and long-term plans of development for our Sawn Lake oil sands project.

In October 2006, the 4-32 and 7-30 wells along with the 1-36 well were suspended. Signet (now known as Andora) had undertaken a mapping of the reservoir to assist in its delineation for any future development of our Sawn Lake property. The first three wells were drilled in the most heavily documented portion of the Sawn Lake lands. Although, as determined by Signet, the preliminary results from the last two wells indicated a lack of cold flow production from wells 4-32 and 7-30, the compartmentalized nature of the reservoir and varying characteristics of these compartments may show different results with further evaluation. Our Company felt that the level of testing on these wells to determine their complete potential was incomplete.

In late 2006, our joint venture partner acquired over 200 km of reprocessed seismic and aeromagnetic studies on our joint properties.

On November 26, 2007, we entered into mediation with Signet (now known as Andora) and resolved our differences and certain collateral matters. The settlement included but is not limited to:

the Farmout Agreement dated February 25, 2005, being effectively terminated concurrently with the execution of the settlement agreement; and

Signet being regarded as having earned the two sections on which the option wells were drilled and 4 additional sections as set out in the Settlement; and

Signet being required to reconvey registered title to 57.5 unearned sections of the Farmout Lands, as defined in the Farmout Agreement, back to us; and

our Company having the right to retest, at no cost to Signet, the option wells previously drilled.

Andora has acknowledged that Deep Well is not responsible for any potential royalty assumed by Deep Well on behalf of Signet in the Farmout Agreement.

On September 10, 2008, the ERCB granted us well licenses to drill 6 wells on our Sawn Lake oil sands properties.

On December 1, 2008, in conjunction with our 2008/2009 winter drilling program, we acquired two vertical wells they previously drilled along with existing road infrastructure. Of the two wells we acquired, one was drilled to a vertical depth of 737 meters on our existing oil sands lease and was cased for Bluesky heavy oil production. The casing of this well was perforated at intervals from 681.5m to 684.5m and 684.5m to 685.0m. This well’s status is drilled and cased for future bitumen production. The existing roads we acquired totalled 12km of access on our Sawn Lake properties.

On December 4, 2008, we successfully spudded the first well of six wells to be drilled in our 2008/2009 Sawn Lake winter drilling program in the Peace River oil sands area of Alberta. By early February of 2009, we successfully drilled all planned six wells of our Sawn Lake oil sands project. All of our exploratory wells were logged, cored and analyzed by independent service providers and are currently being evaluated for in-situ recovery methods.

On February 1, 2009, we acquired additional existing access roads on our Sawn Lake properties from Penn West Petroleum Ltd., adding 8.7 km of roads to our Sawn Lake infrastructure.

In September 2009, we submitted an application to the ERCB for a commercial bitumen recovery scheme to evaluate the 12-14-092-13W5 well for potential development using CSS and later we added the 6-22-092-13W5 well to the ~~application.~~

~~On October 14,~~application, and in late 2010 ~~our CSS Application~~this application was approved by the ERCB to ~~conduct one CSS production~~ test on one of the wells ~~to evaluate the oil sands resource~~ using this secondary recovery technology. The Company has appointed Asher Engineering Ltd. to manage the CSS project and construction, including procurement of all required equipment. The CSS process involves steam injection into a well for a period of up to 30 days, potentially a ”soaking” period, followed by production of heavy oil for up to 50 days or more. This CSS production test is not only for the production of heavy oil from the Blue Sky zone of the Sawn Lake project but it will also aid in quantifying proven reserves of oil.

~~Past Activities~~

A total of three horizontal wells were successfully drilled and cased by Signet (now known as Andora Energy Corporation), our former farmout partner, on the Sawn Lake Property during 2005 and 2006, and a fourth location was prepared for drilling. These wells are pending further evaluation and the development of an exploitation plan with our joint interest Andora Energy Corporation.

We successfully completed our 2008/2009 winter drilling program and met our objectives by drilling 6 wells, 3 of which were drilled on our oil sands permit in order to provide technical data to support the required Department of Energy regulation to convert our 5-year oil sands permit into a 15-year primary lease. In addition, three wells were drilled further to the North of the above-mentioned 3 wells. These three northern wells, drilled by us, continued the delineation of the main reservoir trend and confirmed that the main reservoir continues north. We are evaluating the many options for production now available to us to decide the best course of action. Drilling on these 80% owned lands has opened new avenues for testing and further development of the Sawn Lake project. The focus of our Company’s operations is to define the heavy oil reservoir to establish reserves and to determine the best technology under which oil can be produced from the Sawn Lake project in order to initiate production and generate a cash flow.injection.

~~On December 1, 2008, we acquired from Paramount 2 wells they previously drilled. Of~~In July 2010, Chapman Petroleum Engineering Ltd. performed an independent technical evaluation of the ~~2 wells, one was drilled to a vertical depth of 737 meters on our existing oil sands lease and was cased for bluesky~~ heavy oil ~~production.~~properties on some of our Sawn Lake properties. The ~~casing~~report confirmed the suitability of ~~this well was perforated at intervals~~the properties for employing thermal recovery methods on them. In addition, Chapman Petroleum Engineering Ltd. identified a new hydrocarbon bearing zone up-hole from ~~681.5m to 684.5m and 684.5m to 685.0m.~~the Bluesky zone presently being concentrated on by our Company. This ~~well’s status is drilled and cased for future bitumen production.~~

On December 4, 2008, as operator, we successfully spudded the first well of six wells to be drilled in our 2008/2009 winter drilling program. This well is located at 12-14-092-13W5 in North Central Alberta and was drilled to a vertical depth of 680 meters. The well was logged, cased, and completed for blueskysecondary heavy oil ~~production, with perforated intervals from 644.5m~~zone is in the Peace River formation. It is a clastic unit of lower cretaceous age found at a shallower depth than the Bluesky zone. It is approximately 35 meters thick and is a massive, very fine to ~~649.5m.~~medium grain sandstone conformably deposited on the Harmon Shale. We ~~submitted an application with~~intend to continue the ~~Energy Resources Conservation Board for a commercial bitumen recovery scheme to evaluate the 12-14-092-13W5 well for potential~~ development ~~using Cyclic Steam Stimulation. This well is suspended pending the results of testing.~~

On December 15, 2008, as operator, we successfully spudded the second well of our six well 2008/2009 winter drilling program. This well is located at 9-16-092-13W5 in North Central Alberta and was drilled to a vertical depth of 680 meters. The well was logged, cased, and completed for bluesky heavy oil production, with perforated intervals from 638.5m to 643.5m. This well is suspended pending the results of testing.

On January 8, 2009, as operator, we successfully spudded the third well of our six well 2008/2009 winter drilling program. This well is located at 10-33-091-13W5 in North Central Alberta and was drilled to a vertical depth of 708 meters. This well determined the south western edge of the Bluesky reservoir ~~of our Sawn Lake Project.~~and at the same time we intend to evaluate this newly discovered reservoir by coring future wells within this zone.

On January 16, 2009, as operator, we successfully spudded the fourth well of our six well 2008/2009 winter drilling program. This well is located at 7-5-092-13W5 in North Central Alberta and was drilled to a vertical depth of 718 meters. The well was logged and cased for bluesky heavy oil production, and is pending further evaluation and the development of an exploitation.

On January 25, 2009, as operator, we successfully spudded the fifth well of our six well 2008/2009 winter drilling program. This well is located at 8-4-092-13W5 in North Central Alberta and was drilled to a vertical depth of 725 meters. The well was logged and cased for bluesky heavy oil production, and is pending further evaluation and the development of an exploitation plan.

On February 2, 2009, as operator, we successfully spudded the sixth well of our six well 2008/2009 winter drilling program. This well is located at 6-22-092-13W5 in North Central Alberta and was drilled to a vertical depth of 660 meters. The well was logged and cased for bluesky heavy oil production. We also added the 6-22-092-13W5 well to the CSS Application.

ITEM 3.

LEGAL PROCEEDINGS

I.G.M. Resources Corp. vs. Deep Well Oil & Gas, Inc., et al

On March 10, 2005, I.G.M. Resources Corp. (hereinafter referred to as “IGM”) filed against Classic Energy Inc., 979708 Alberta Ltd. (hereinafter referred to as “979708”), Deep Well Oil & Gas, Inc., Nearshore Petroleum Corporation, Steven P. Gawne, Rebekah Gawne, Gawne Family Trust, 1089144 Alberta Ltd., John F. Brown, Diane Lynn McClaflin, Cassandra Doreen Brown, Elissa Alexandra Brown, Brown Family Trust, Priority Exploration Ltd., Northern Alberta Oil Ltd. and Gordon Skulmoski ~~(the~~(hereinafter referred to as the “Defendants”) a Statement of Claim in the Court of Queen’s Bench of Alberta Judicial District of Calgary. This suit is part of a series of lawsuits or actions undertaken by IGM against some of the other above-named Defendants.

IGM was a minority shareholder of 979708. 979708 was purportedly in the business of discovering, assembling and acquiring oil &and gas prospects. In 2002 and 2003, 979708 acquired oil and gas prospects in the Sawn Lake area of Alberta. On or about ~~the 14~~ththe14th of July 2003, all or substantially all the assets of 979708 were sold to Classic Energy Inc. IGM claims the value of the assets sold was far in excess of the value paid for those assets. On April 23, 2004, Northern purchased some of Classic Energy Inc.’s assets, including some of which are under dispute by IGM. On June 7, 2005, Deep Well acquired all of the common shares of Northern thereby giving Deep Well an indirect beneficial interest in the assets IGM is claiming an interest in.

IGM seeks an order setting aside the transaction between 979708 and Classic Energy Inc. and returning the assets to 979708, compensation in the amount of $15,000,000 Cdn, and a declaration of trust declaring that Northern and Deep Well hold all of the assets acquired from 979708 and any property acquired by use of such assets or confidential information of 979708, in trust for IGM.

This lawsuit has been stayed pending the outcome of the other litigation by IGM against some of the above ~~defendants~~Defendants other than Deep Well and Northern. The Company believes the claims are without merit and will vigorously defend against them. As of September 30, ~~2010,~~2011, no contingent liability has been recorded, as we believe a successful outcome for ~~the Plaintiff~~IGM is ~~unlikely.~~

remote.

Hardie & Kelly vs. Brown, et al

On June 2, 2006, Hardie and Kelly (the “Plaintiff”), Trustee of the Estate of John Forbes Brown, filed against John Forbes Brown, a bankrupt, Diane Lynn McClaflin, 1089144 Alberta Ltd., and Deep Well (the “Defendants”) an Amended Statement of Claim filed in the Court of Queen’s Bench of Alberta Judicial District of Calgary. John Forbes Brown was a former officer and then sub-contractor of Deep Well before and at the time he was assigned into bankruptcy on July 12, 2004. The Plaintiff claims, in addition to other issues unrelated to Deep Well, that John Forbes Brown received 4,812,500 Deep Well shares as a result of his employment in Deep Well and that John Forbes Brown improperly assigned these shares to the numbered company as a ruse entered into on the eve of insolvency by John Forbes Brown in order to facilitate the hiding of assets from his creditors and the trustee of his bankruptcy. The Plaintiff further claims that on August 23, 2004, John Forbes Brown advised the Plaintiff that he in fact owned the above shares and did not disclose this ownership in his filed bankruptcy statement of affairs.

The Plaintiff further claims that John Forbes Brown would lodge the said shares with his lawyer until such time as these shares could be transferred to the Plaintiff. The Plaintiff further claims that unbeknownst to them John Forbes Brown surreptitiously removed the shares from his lawyer’s office and delivered them to Deep Well so that Deep Well could cancel them. The Plaintiff claims that Deep Well conspired with John Forbes Brown to defraud the creditors of John Forbes Brown by taking receipt and ~~canceling~~cancelling the said shares. The Plaintiff claims that consideration paid by Deep Well for the said shares was invested in the home owned by John Forbes Brown and his wife. The Plaintiff seeks: 1.) An accounting of the proceeds and benefits derived by the dealings of the shares; 2.) The home owned by John Forbes Brown and his wife, to be held in trust on behalf of the Plaintiff, and an accounting of proceeds related to this trust; 3.) Damages from the Defendants because of their actions; 4.) A judgment for $15,612,645 Cdn; 5.) An order to sell John Forbes Brown’s home; and 6.) Interest and costs.

We plan to vigorously defend ourselves against the Plaintiff’s claims. As at September 30, ~~2010,~~2011, no contingent liability has been recorded, as we believe a successful outcome for the Plaintiff is ~~unlikely.~~remote.

Northern Alberta Oil Ltd. vs. 1132559 Alberta Ltd.

On June 27, 2008, our subsidiary, Northern Alberta Oil Ltd. (hereinafter referred to as “Northern”), filed a Statement of Claim in the Court of Queen’s Bench of Alberta Judicial District of Edmonton against 1132559 Alberta Ltd. (hereinafter referred to as “113”). Northern claims that 113 has not paid their share of the incurred operating costs for the Sawn Lake project. Northern further claims that they paid the operating expenses required on behalf of 113 and invoiced 113 for the amounts and that 113 refused or neglected to reimburse their proportionate share of the operating costs. Northern seeks: 1.) Payment in full in the amount of $74,470.71 in Canadian funds for the amounts invoiced to 113; 2.) Interest pursuant to section 106 of the PASC (“Petroleum Accountants Society of Canada”) 1996 Accounting Procedure; and 3.) Costs of the action.

On August 30, 2010, our subsidiary, Northern, filed an additional Statement of Claim in the Court of Queen’s Bench of Alberta Judicial District of Edmonton against 113. Northern claims that 113 has neglected and refused to pay the cash calls pursuant to two AFEs (“Authority for Expenditure”) that were approved and signed by 113. Northern seeks: 1.) Payment in full in the amount of $70,584.50 in Canadian funds being the balance owing, exclusive of interest, for 113’s proportionate share of the cash calls. 2.) Interest pursuant to section 505(b)(i) of the 1990 CAPL Operating Agreement; and 3.) Costs of the action.

ITEM 4.

(REMOVED AND RESERVED)

PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market ~~Price~~ Information ~~for Common Stock~~

Deep Well’s stock is currently quoted on the OTCQB marketplace under the trading symbol DWOG. The following table sets forth the high and low sales prices for Deep Well common stock as reported on the OTCQB marketplace for the periods indicated ~~below since~~below. Since April 4, 2010, all other prior sales prices are quoted on the pink sheets. These over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions:

	High		Low		High		Low

Fiscal September 30, 2006
First Quarter	$	1.31	$	0.37
Second Quarter	$	2.98	$	1.15
Third Quarter	$	2.85	$	1.45
Fourth Quarter	$	1.76	$	0.57

Fiscal September 30, 2007
First Quarter	$	0.66	$	0.33
Second Quarter	$	0.56	$	0.23
Third Quarter	$	1.05	$	0.35
Fourth Quarter	$	0.84	$	0.45

Fiscal September 30, 2008
First Quarter	$	0.58	$	0.45	$	0.58	$	0.45
Second Quarter	$	0.63	$	0.31	$	0.63	$	0.31
Third Quarter	$	0.73	$	0.42	$	0.73	$	0.42
Fourth Quarter	$	0.58	$	0.20	$	0.58	$	0.20

Fiscal September 30, 2009
First Quarter	$	0.39	$	0.13	$	0.39	$	0.13
Second Quarter	$	0.29	$	0.14	$	0.29	$	0.14
Third Quarter	$	0.19	$	0.14	$	0.19	$	0.14
Fourth Quarter	$	0.20	$	0.13	$	0.20	$	0.13

Fiscal September 30, 2010
First Quarter	$	0.18	$	0.11	$	0.18	$	0.11
Second Quarter	$	0.17	$	0.08	$	0.17	$	0.08
Third Quarter	$	0.12	$	0.03	$	0.12	$	0.03
Fourth Quarter	$	0.07	$	0.03	$	0.07	$	0.03

Fiscal September 30, 2011
First Quarter					$	0.17	$	0.03
Second Quarter					$	0.17	$	0.06
Third Quarter					$	0.16	$	0.07
Fourth Quarter					$	0.10	$	0.05

Holders of Record

As of November ~~26, 2010,~~10, 2011, we had approximately 172 holders of record of our shares of common stock. Our Company estimates that investment dealers and other nominees are the record holders for approximately ~~2,553~~2,396 beneficial holders.

Dividends

We have not paid cash dividends since inception. We intend to retain all of our earnings, if any, for use in our business and do not anticipate paying any cash dividends in the foreseeable future. The payment of any future dividends will be at the discretion of the Board of Directors and will depend upon a number of factors, including future earnings, the success of our business activities, capital requirements, the general financial condition and our future prospects, general business conditions and such other factors as the Board of Directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation ~~Plan~~Plans

The following table provides information as of September 30, ~~2010~~2011 with respect to shares of Deep Well’s common stock that may be issued under our existing equity compensation plans.

Equity Compensation Plan Category

(a)

Number of Securities
to be issued upon
exercise of
outstanding options,
warrants and rights

(b)

Weighted-average
exercise price of
outstanding
options, warrants
and rights

(c)
Number of Securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a))

Equity compensation plans approved by security holders 3,378,500 $ 0.69 7,298,926 *

Equity compensation plans not approved by security holders None None None

Total 3,378,500 $ 0.69 7,298,926 *

* Based on ~~106,774,258~~ issued and outstanding shares as at September 30, 2010. The maximum number of common shares that may be reserved for issuance under the Stock Option Plan may not exceed 10% of our Company’s issued and outstanding common shares.

Equity Compensation Plan as of September 30, 2011

Plan Category

(a)

Number of securities

to be issued upon

exercise of

outstanding options,

warrants and rights

(b)

Weighted-average

exercise price of

outstanding

options, warrants

and rights

(c)

Number of securities

remaining available for future

issuance under equity

compensation plans (excluding

securities reflected in column

(a))

Equity compensation plans approved by security holders

3,351,000

0.23

10,332,997

Equity compensation plans not approved by security holders

None

Total

3,351,000

0.23

10,322,997

* Based on 136,739,971 issued and outstanding shares as at September 30, 2011. The maximum number of common shares that may be reserved for issuance under the Stock Option Plan may not exceed 10% of our Company’s issued and outstanding common shares.

Stock Option Plan

On November 28, 2005, our Board of Directors adopted the Deep Well Oil & Gas, Inc. stock option plan (the “Stock Option Plan”). The Plan was approved by a majority of our stockholders at the February 24, 2010 general meeting of stockholders. The Stock Option Plan, which is administered by the Board of Directors, permits options to acquire shares of Deep Well’s common stock to be granted to our directors, senior officers and employees, as well as certain consultants and other persons providing services to our Company. This Stock Option Plan was adopted to provide an incentive to the retention of our directors, officers and employees as well as consultants that we may wish to retain in the future. The maximum number of common shares that may be reserved for issuance under the Stock Option Plan may not exceed 10% of our issued and outstanding common shares, subject to adjustment as contemplated by the Stock Option Plan. ~~On November 28, 2005, the Board granted 375,000 options~~For further information see Note 13 to acquire common shares vested over three years to each director of Deep Well and granted 187,500 options to acquire common shares to a director of a subsidiary of Deep Well. The exercise price of such options is $0.71 per share. In each case, the vesting of such director options will occur only if the holder of the options continues to provide services to us during the immediate annual period preceding the relevant vesting date. The options will terminate at the close of business five years from the date of grant. In addition, on November 28, 2005, the Board granted 390,000 options to acquire common shares vested over three years to certain corporations providing consulting services to us. Each of such consultant firms is wholly owned by directors of our Company. The exercise price of such options is $0.71 per share. In each case, the vesting of such consultant options will occur only if the holder of the options continues to provide services to us on the relevant vesting date. These options were set to terminate at the close of business five years from the date of grant, and are therefore expired. The Plan was approved by a majority of shareholders at the February 24, 2010 general meeting of stockholders. The Stock Option Plan is administered by the Board and permits options to acquire shares of the Deep Well’s common shares to be granted to directors, senior officers and employees of the Company and its subsidiaries, as well as certain consultants and other persons providing services to the Company or its subsidiaries.consolidated financial statements contained herein.

On September ~~28,~~20, 2007, our Board of Directors granted options under the stock option plan to a certain employee to acquire 36,000 common shares of our Company at the exercise price of $0.47 per common share, of which 8,000 shall be vested immediately and 28,000 shall be vested at a rate of 2,000 common shares per month commencing September 30, 2007, so long as the employee continues to provide employment services on such vesting dates.

On October 1, 2007, we entered into a Consulting Agreement, effective September 20, 2007, with R.N. Dell Energy Ltd. (hereinafter referred to as “Contractor”). On September 28, 2007, under the terms of the Consulting Agreement, our Board of Directors granted options to the Contractor to acquire 240,000 common shares of our Company at the exercise price of $0.47 per common share (being the closing price as of the day before the effective date) which shall be vested at a rate of 20,000 common shares per month commencing October 31, 2007, so long as the Contractor continues to provide consulting services on such vesting dates.

On November 28, 2010, all of the stock options previously granted on November 28, 2005 to Dr. Horst A. Schmid, Portwest Investments Ltd., Mr. Curtis James Sparrow, Concorde Consulting, Trebax Projects Ltd., Mr. Cyrus Spaulding, Mr. Donald E.H. Jones and Mr. Moses Ling, expired unexercised. In total 2,727,500 options granted to directors and former directors and their controlled companies expired.

On March 23, 2011, our Board of Directors approved to decrease the exercise price of the stock options to purchase 36,000 shares of common stock of Deep Well orginally granted to an employee of our Company on September 20, 2007. The exercise price of the stock options were reduced from $0.47 per common share to $0.14 per common share. All other terms and conditions applicable to the options were unchanged. The options expire on September 20, 2012.

On March 23, 2011, our Board of Directors granted its directors, Dr. Horst A. Schmid, Mr. Said Arrata, Mr. Satya Das, Mr. David Roff, Mr. Curtis Sparrow and Mr. Malik Youyou, options to purchase 450,000 shares each of common stock at an exercise price of $0.14 per common share, 150,000 vesting immediately and the remaining vesting one-third on March 23, 2012, and one-third on March 23, 2013, each with a five-year life. The options expire on March 23, 2016.

Performance Graph

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and therefore are not required to provide the information required under this item.

Recent Sales of Unregistered Securities

On August 14, 2008, pursuant to a subscription agreement, our Company completed a private placement to one investor, the first tranche being 10,638,297 units at a price of $0.47 per unit, for total gross proceeds of $5,000,000. Each unit is comprised of one common share, one common share purchase warrant (“Whole Warrant”) and 0.188000015 of one common share purchase warrant (“Additional Fractional Warrant”). Each Whole Warrant entitles the holder to purchase one common share at a price of $0.71 per common share for a period of three years from the date of closing. Each Additional Fractional Warrant entitles the holder to purchase 0.188000015 of one common share at a price of $0.95 for a period of three years from the date of closing. The Whole Warrants and the Additional Fractional Warrants expire on August 14, 2011. The units were issued pursuant to Regulation S under the 1933 Act.

On October 31, 2008, we completed the second tranche of the private placement partially completed on August 14, 2008. In connection with the second trance, we sold to one subscriber 12,500,000 units at a price of $0.40 per unit, for total gross proceeds of $5,000,000. Each unit is comprised of one (1) common share, one (1) common share purchase warrant and 0.16 of one common share purchase warrant (“Additional Fractional Warrant”). Each warrant ~~entitles~~entitled the holder to purchase one (1) common share at a price of $0.60 per common share for a period of three years from the date of closing. Each Additional Fractional Warrant ~~entitles~~entitled the holder to purchase 0.16 of one common share at a price of $0.80 for a period of three years from the date of closing. The warrants and the Additional Fractional Warrants ~~expire~~expired on October 31, ~~2011.~~2011, unexercised. No commission or finder’s fees were payable in connection with this private placement. The units were issued pursuant to Regulation S under the Securities Act of ~~1933.~~1933, as amended.

On November 9, 2010, pursuant to two subscription agreements, our Company completed two private placements to two investors (the “Subscribers”) of an aggregate of 29,285,713 units (“Units”) at a price of $0.07 per Unit, for total gross proceeds of $2,050,000. Each Unit is comprised of one (1) common share and one (1) common share purchase warrant. Each warrant entitles the holder to purchase one (1) common share at a price of $0.105 for a period of three years from the date of closing, provided that if the closing price of the common shares of the Company on the principal market on which our shares trade is equal to or exceeds $1.00 for thirty consecutive trading days, the warrant term shall automatically accelerate to the date which is thirty calendar days following the date that written notice has been given to the warrantholder. No commission or finder’s fees were payable in connection with these private placements. The Units were issued pursuant to Regulation S under the Securities Act of 1933, as amended.

On March 23, 2011, our Board of Directors approved the issuance of 500,000 shares of common stock to Mr. Said Arrata as an incentive for Mr. Arrata to agree join our Board of Directors. The ~~Company intends~~Units were issued pursuant to ~~use the majority~~Section 4(2) of the ~~net proceeds from the private placements to conduct engineering, construction and other operations for its recently approved CSS production test.~~Securities Act of 1933, as amended.

On March 23, 2011, our Board of Directors approved the issuance of 180,000 shares of common stock to a contractor as compensation for services provided to us during the period from April 1, 2010 to March 31, 2011. The Units were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.

ITEM 6.

SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and therefore are not required to provide the information required under this item.

2221

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes. For the purpose of this discussion, unless the context indicates another meaning, the terms: “Deep Well,” “Company,” “we,” “us,” and “our,” refer to Deep Well Oil & Gas, Inc. and its subsidiaries. This discussion includes forward-looking statements that reflect our current views with respect to future events and financial performance that involve risks and uncertainties. Our actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of certain factors including risks discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements” below and elsewhere in this report, and under the heading “Risk Factors” and “Environmental Laws and Regulations” disclosed in this annual report on Form 10-K for the fiscal year ended September 30, ~~2010.~~2011.

Our consolidated financial statements and information are reported in U.S. dollars and are prepared based upon United States generally accepted accounting principles (“US GAAP”).

General Overview

Deep Well Oil ~~and~~& Gas, Inc. ~~(“Deep Well”)~~, along with its subsidiaries through which it conducts business, is an emerging independent junior oil and gas exploration and development company headquartered in Edmonton, Alberta, Canada. Our ~~Company’s~~ immediate corporate focus is to develop the existing land base that we presently control in the Peace River oil sands area in Alberta, Canada. Our principal office is located at Suite 700, 10150 - 100 Street, Edmonton, Alberta, Canada T5J 0P6, our telephone number is (780) 409-8144, and our fax number is (780) 409-8146. Deep Well Oil & Gas, Inc. is a Nevada corporation and trades on the OTCQB marketplace under the symbol DWOG. We maintain a web site at www.deepwelloil.com.

On April 21, 2010, we announced our quotation on the OTCQB marketplace. This graduation from the “Pink Sheets – Current Information” tier recognizes the progress that we have made in meeting our reporting requirements under the Securities Exchange Act of 1934. The OTCQB is a new market that requires companies to be up to date in their filing requirements under the Securities Exchange Act of 1934.

Results of Operations ~~for the Year Ended September 30, 2010~~

~~Deep Well is~~We are an exploration stage company and as such ~~does~~do not have commercial production on any of ~~its~~our properties and, accordingly, itwe currently ~~does~~do not generate cash from operations. Since the inception of our current business plan, our operations have consisted primarily of various exploration and start-up activities relating to our properties, which included acquiring lease holdings by acquisitions and public offerings, seeking investors, locating joint venture partners, acquiring and analyzing seismic data, engaging various firms to comply with leasehold conditions and environmental regulations as well as project management, and developing our long term business strategies. For the year ended September 30, ~~2010,~~2011, and for the comparable period in the prior year, we generated no revenues from operations.

September 10, 2003
Year Ended Year Ended to
September 30, 2010 September 30, 2009 September 30, 2010

Revenue $ – $ – $ –
Expenses
General and Administrative $ 1,119,130 $ 2,068,176 $ 10,515,638
Amortization and Accretion 217,605 146,261 379,906
Share Based Compensation – 5,802 923,142

Net Loss from Operations (1,336,735 ) (2,220,239 ) (11,818,686 )

Other Income and Expenses
Rental and Other Income 160 18,073 18,233
Interest Income 5,023 34,826 206,072
Interest Expense – (3 ) (208,580 )
Forgiveness of Loan Payable – – 287,406
Settlement of Debt – – 24,866
Loss on Disposal of Asset – – (510 )

Net Loss and Comprehensive Loss $ (1,331,552 ) $ (2,167,343 ) $ (11,491,199 )

							September 10, 2003
	Year Ended			Year Ended			to
	September 30, 2011			September 30, 2010			September 30, 2011

Revenue	$	–		$	–		$	–
Expenses
General and Administrative	$	1,536,211		$	1,119,130		$	12,974,991
Depreciation and accretion		162,140			217,605			542,046

Net loss from operations		(1,698,351	)		(1,336,735	)		(13,517,037	)

Other income and expenses
Rental and other income		5,538			160			23,771
Interest income		4,011			5,023			210,083
Interest expense		–			–			(208,580	)
Forgiveness of loan payable		–			–			287,406
Settlement of debt		–			–			24,866
Loss on disposal of assets		348			–			(162	)

Net loss and comprehensive loss	$	(1,688,454	)	$	(1,331,552	)	$	(13,179,653	)

2322

~~Our net loss~~For the year ended September 30, 2011, our general and ~~comprehensive loss~~administrative expenses increased by $417,081 from the prior year, this increase was primarily due to, (i) $294,281 of share-based compensation charged to expense, which was primarily related to vested stock options that were granted to our directors, (ii) $170,044 was written off to bad debt expense for money owed to us from our joint venture co-owners that have not paid us for operation expenses we incurred on our joint properties, and (iii) $163,914 for operations charged to expense primarily for our CSS project and engineering fees to further evaluate our properties. For the year ended September 30, 2011, our general and administrative expenses, excluding share-based compensation expense of $294,281, the write-offs of $170,044 to bad debt expense and $163,914 in operations charged to expense, was $907,972. For the year end September 30, 2010 our general and administrative expenses included, (i) $182,111 written off to bad debt expense for money owed to us from one of our joint venture co-owners that has not paid us for operation expenses we incurred on our joint properties, (ii) no share-based compensation was recorded, (iii) $29,217 for operations charged to expense. For the year ended September 30, 2010, our general and administrative expenses, excluding the write-off of $182,111 to bad debt expense and $29,217 in operations charged to expense, was ~~$1,331,552 compared to a net loss and comprehensive loss of $2,167,343 for the year ended September 30, 2009. This difference was due primarily to a decrease of $949,046 in~~$907,802, based on this analysis our general and administrative costs ~~relating~~remained relatively the same compared to our September 30, 2011 year end. On March 23, 2011, our Board of Directors granted its directors, Dr. Horst A. Schmid, Mr. Said Arrata, Mr. Satya Das, Mr. David Roff, Mr. Curtis James Sparrow and Mr. Malik Youyou, options to purchase 450,000 shares each of common stock at an exercise price of $0.14 per common share, 150,000 vesting immediately and the remaining vesting one-third on March 23, 2012, and one-third on March 23, 2013, with a ~~decrease in operating expenses.~~five-year life.

For the year ended September 30, ~~2010, interest income~~2011, depreciation and accretion expense decreased by ~~$29,803,~~$55,465, which was primarily due to the depreciating value of our assets. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. In compliance with our accounting policy, only half of the depreciation is taken in the year of acquisition. No significant asset purchases were made in the year ending September 30, 2011.

For the year ended September 30, 2011, rental and other income increased by $5,378 compared to the year ended September 30, ~~2009,~~2010, which was primarily due to an increase in income earned from road use fees and subleasing a portion of our office space.

For the year ended September 30, 2011, interest income decreased by $1,012 compared to the year ended September 30, 2010, which was primarily due to ~~not receiving~~a decrease in interest income received from ~~term deposits~~our cash held in banks.

As a result of the ~~Company had in~~above transactions, our net loss and comprehensive loss from operations for the ~~prior year.~~year ended September 30, 2011 increased by $356,902 compared to the year ended September 30, 2010, as discussed above this increase was primarily due to the share-based compensation charged to expense, the write-offs to bad debt expense for money owed to us from our joint venture co-owners and operations charged to expense primarily for our CSS project and engineering fees to further evaluate our properties.

Operations

Deep Well, through its subsidiaries, Northern ~~Alberta Oil Ltd. (“Northern”)~~ and Deep Well ~~Oil & Gas (Alberta) Ltd.,~~Alberta, currently has an 80% working interest in 56 contiguous sections ofon seven oil sands leases where we are the operator and a 40% working interest in an additional 12 contiguous sections ofon two oil sands leases in the Peace River oil sands area of Alberta, Canada. ~~Our~~These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares) with Deep Well having 31,376 net acres (12,698 net hectares).

Currently we have in place a few joint operating agreements with two other joint interest partners to manage our joint oil sands leases, all of ~~land.~~which are based on the 1990 Canadian Association of Petroleum Landmen (“CAPL”) Operating Procedure. We are currently working with our joint venture partner toward developing a more comprehensive joint operating agreement to govern all of our joint properties. Under these agreements our joint oil sands leases were evaluated seismically, geologically and by drilling to establish the continuity and the distribution of the crude bituminous-bearing Bluesky reservoir zone across our joint lands.

Previously, we entered into a service agreement with an independent engineering and constructors firm to provide project management services to us for our 2008/2009 winter drilling program. During our winter drilling season of 2008/2009 we successfully completed a drilling program and met our objectives by drilling six vertical wells, three of which were drilled ~~6 wells.~~on our oil sands permit in order to provide technical data to support the required Alberta Department of Energy regulation to convert our 5-year oil sands permit into a 15-year primary lease. The other three wells were drilled further to the North and continued the delineation of the main reservoir trend and confirmed that the main reservoir continues to the northwest. These wells were drilled to a depth of approximately 700 meters each. Along with the acquisition of road infrastructure on our properties, we acquired a well on our oil sands lease that was previously drilled and cased by an unrelated third party for heavy oil production in the Bluesky reservoir zone. In addition, we have ana 40% working interest in 3three horizontal wells, which were previously drilled by our former farmout partner and ~~an interest in two wells~~are pending further evaluation and the Company acquired. Since then we have been evaluating the options for production available to us to determine the best course of action. Drilling on 80% owned lands has opened new avenues for testing and further development of ~~the Sawn Lake project. The focus~~an exploitation plan with our joint interest partner Andora. All of our ~~drilling program was to define the heavy oil reservoir to establish reserves~~exploratory wells were logged, cored and ~~to determine the best technology under which oil can be produced from the Sawn Lake project in order to initiate production~~analyzed by independent service providers and ~~generate cash flow.~~are currently being evaluated for in-situ recovery methods.

In September of 2009, we submitted an application to the ~~Energy Resources Conservation Board (“ERCB”)~~ERCB for a commercial bitumen recovery scheme to evaluate ~~the 12-14-092-13W5 well~~one of our wells for potential development using ~~Cyclic Steam Stimulation (“CSS”)~~CSS and over a year later ~~added the 6-22-092-13W5 well to the application. On~~in October ~~14,~~of 2010, this application was approved by the ~~ERCB~~ERCB. We have since put together a team of reservoir and completions engineers, project management and environmental consultants to ~~conduct one CSS production test one of~~assist us with determining the ~~wells~~best methods to ~~evaluate the oil sands resource~~develop our properties and to embark on a pilot project using ~~this secondary~~in-situ recovery technology. ~~The Company has appointed Asher Engineering Ltd. to manage the CSS project and construction, including procurement of all required equipment.~~ The CSS process involves steam injection into a well for a period of up to 30 days, potentially a ~~”soaking”~~“soaking” period, followed by production of heavy oil for up to 50 days or more. This CSS ~~production test~~thermal recovery scheme is not only for the production of heavy oil from the ~~Blue Sky~~Bluesky reservoir zone of ~~the~~our Sawn Lake project but it will also aid in quantifying ~~the Company’s oil reserves.~~proven and probable reserves of oil.

In July 2010 ~~Chapman Petroleum Engineering Ltd. performed an~~and June 2011, it was determined through two separate independent ~~technical evaluation~~reservoir engineering firms that our exploratory wells have found sufficient quantities of ~~the~~ heavy oil ~~properties on some~~in place to justify the completion of our ~~Sawn Lake properties. The report~~wells for future production. It was also confirmed ~~the suitability~~that our properties are suitable for employing thermal recovery ~~methods.~~methods on them. In addition, ~~Chapman Petroleum Engineering Ltd. identified a new~~another hydrocarbon bearing zone was identified up-hole from the Bluesky reservoir zone presently being concentrated on by ~~the~~our Company. This secondary heavy oil zone is in the Peace River formation. ~~It is a clastic unit of Lower Cretaceous age found at a shallower depth than the Bluesky. It is approximately 35 meters thick and is a massive, very fine~~We intend to ~~medium grain sandstone conformably deposited on the Harmon shale. The Company will~~ continue the development of the larger Bluesky reservoir and at the same time ~~will~~we intend to evaluate this newly discovered reservoir by coring future ~~wells.~~wells where they insect this zone. In December of 2010 and January of 2011, two separate independent reservoir engineering firms prepared National Instrument 51-101 (a Canadian evaluation engineering standard) compliant resource appraisal reports for one of our joint venture partners. These reports evaluated the resource of some of our Sawn Lake joint properties and included a complete geological and economic evaluation of the oil sands leases in the Sawn Lake area based on using thermal recovery to exploit the resource.

On November 9, 2010, we ~~secured~~completed two private placement financings for aggregate gross cash proceeds of $2,050,000. ~~The Company intends to use~~We have used the majority of ~~the net~~these proceeds from ~~the~~these private placements to conduct engineering, construction and other operations for ~~its~~our recently approved CSS ~~production test.~~

The Company has also appointed Pioneer Land and Environmental to proceed immediately with the environmental studies mandated by Alberta Regulations before the Company can embark on a five to seven well production pilot project as an interim step toward full scale commercial production. The Company’s geological studies lead it to conclude that its working interest can support full commercial production. The Company is fully committed to best practices in environmental stewardship to assure sustainable development of its in-situ heavy oil holdings.project.

Liquidity and Capital Resources

As of September 30, ~~2010,~~2011, our ~~Company’s~~ total assets were ~~$13,923,747~~$14,624,096 compared to ~~$15,083,173~~$13,923,747 as of September 30, ~~2009, and~~2010. The primary increase in our total assets was due to cash received from the November 2010 private placements of our common stock. Our total liabilities as of September 30, ~~2010,~~2011 were ~~$564,410~~$608,932 compared ~~with $392,284~~to $564,410 as of September 30, ~~2009. The decrease in our total assets was due primarily to a decrease in cash and accounts receivable, including an $188,138.54 Cdn allowance for the money owed~~2010. In comparison to the ~~Company by one~~prior year, we had an increase of ~~its joint venture co-owners. The Company is continuing to pursue its remedies to collect these monies. The increase~~$44,522 in our total liabilities, ~~was primarily due to~~which the result of an increase of $115,864 to accrued fees payable to corporations owned by directors for services to our Company that we have not paid; offset by a decrease of $48,555 in ~~our asset retirement obligations~~deposits received from stock subscriptions and a decrease of $23,221 in accounts payable.

Our working capital (current liabilities subtracted from current assets) is as follows.

	September 30, 2011		September 30, 2010
Current Assets	$	809,313	$	386,018
Current Liabilities		221,564		177,476
Working Capital	$	587,749	$	208,542

September 30, 2010 September 30, 2009
Current Assets $ 386,018 $ 2,032,025
Current Liabilities 177,476 34,049
Working Capital $ 208,542 $ 1,997,976

As of September 30, 2011, our Company had working capital of $587,749 compared to our working capital of $208,542 as of September 30, 2010. Our increase in working capital was primarily due to the cash received from the November 2010 private placements of our common stock. Currently we have no long-term debt.

As reported on our Consolidated Statement of Cash Flows under “Operating Activities”, for the year ending September 30, 2011, we incurred an increase of $294,281 in share-based compensation, which was related to (i) the issuance of stock options granted to our directors, (ii) shares issued to an individual as an incentive to join our Board as a director, and (iii) shares issued to a contractor as compensation for services provided to our Company. We did not record any incurred share-based compensation in the year ending September 30, 2010. For further information, see Notes 12 and 13 to our consolidated financial statements included in this annual report on Form 10-K. In the year ending September 30, 2011, we wrote-off $170,044 to bad debt and another $182,111 to bad debt for the year ending September 30, 2010. These write-offs were in respect of money owed to us by two of our joint venture co-owners that have not been paid to us for operating expenses we incurred on our joint properties. We are pursuing our remedies to collect the money owed to us which resulted in these write-offs. For the year ended September 30, 2011, our depreciation and accretion expense decreased by $55,465 from the prior year ended September 30, 2010, which was primarily due to a decrease in depreciation expense on our assets. No significant asset purchases were made in the year ending September 30, 2011 and no significant change incurred for accretion expense. For the year ending September 30, 2011 we had a decrease of $727,465 in net changes in non-cash working capital from the prior year ended September 30, 2010, which was due to a decrease in accounts receivable from a decline in operations and the release of monies owed to us by the Canada Revenue Agency for goods and service tax credits.

As reported on our Consolidated Statement of Cash Flows under “Investing Activities”, we had a decrease of $169,973 in our long term investments for the year ending September 30, 2011 from the comparable year ended September 30, 2010, which was due to the amount of money required to be deposited with the ERCB to be held in trust for each of our ~~Company had working capital of $208,542 compared to our working capital of $1,997,976 as of~~wells. For the year ended September 30, ~~2009. Our working capital~~2011, no additional money was required to be deposited with the ERCB to be held in trust. These investments are required by the ERCB to ensure there are sufficient future cash to meet the expected future asset retirement obligations, and are restricted for this purpose. Also, for the year ended September 30, 2011, we reported a decrease of $63,995 on investment in oil and gas properties from the prior year ended September 30, 2010, which was primarily due ~~primarily~~ to ~~engineering expenses incurred~~decline in our field operations.

As reported on our Consolidated Statement of Cash Flows under “Financing Activities”, we recorded an increase of $2,050,000 in proceeds from the issuance of common stock for ~~operations and general corporate expenditures. Currently~~the year ending September 30, 2011. These cash proceeds were from two private placements we ~~have no long-term debt.~~completed in November 2010, in connection with which we issued an aggregate of 29,285,713 common shares to two investors, at a price of $0.07 per common share, for total gross cash proceeds of $2,050,000, of which we had previously received a $48,555 deposit that was recorded in our consolidated financial statements in respect of our fiscal year ended September 30, 2010.

Our cash and cash equivalents for the year ending September 30, ~~2010~~2011 were ~~$103,550~~$723,766 compared to ~~$945,835~~$103,550 for the ~~comparable~~prior year ~~ending~~ended September 30, ~~2009.~~2010, which was primarily due to the cash we received in the November 2010 private placements. Since March 10, 2005, we have financed our business operations through a loan, fees derived from the farmout of some of our lands, private offerings of our common stock and other securities, and the sale of our common stock upon the exercise of certain warrants, realizing gross proceeds of approximately $21.6 ~~million.~~million in cash. In some of these offerings, we sold units comprised of common stock and warrants to purchase additional common stock, and as a result of these offerings, we ~~currently~~ have an aggregate of ~~57,462,810~~30,324,513 warrants outstanding as of November 30, 2011, with exercise prices ranging from $0.105 to $1.20. These warrants’ expiration dates range from ~~August 14, 2011~~June 22, 2012 to November 9, 2013. If all of these warrants are exercised we may realize aggregate proceeds of approximately ~~$22.9~~$4.3 million. However, the warrant holders have complete discretion as to when orand if the warrants are exercised before they expire and we cannot guarantee that the warrant holders will exercise any of the warrants.

For our long-term operations, we anticipate that, among other alternatives, we may raise funds during the next twenty-four months through sales of our ~~common stock.~~equity securities. We also note that if we issue more shares of our common stock, our stockholders may experience dilution in the percentage of their ownership of common stock. We may not be able to raise sufficient funding from stock sales for long-term operations and if so, we may be forced to delay our business plans until adequate funding is obtained. We believe debt financing will not be an alternative for funding our operations, as we are an exploration stage Company, and due to the risky nature of our business.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Cautionary Note Regarding Forward-Looking Statements ~~for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act~~

This annual report on Form 10-K, including all referenced exhibits, contains “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than statements of historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our future financial position, business strategy, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words "may," "believe," "intend," "will," "anticipate," "expect," "estimate," "project," "future," "plan," "strategy" or "continue," and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters, often identify forward-looking statements. For these statements, Deep Well claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this annual report on Form 10-K include, among others, statements with respect to:

·	our current business strategy;

·	our future financial position and projected costs;

·	our projected sources and uses of cash;

·	our plan for future development and operations;

·	our drilling and testing plans;

·	our proposed enhanced oil recovery test well project;

·	the sufficiency of our ~~working~~ capital in order to execute our business plan;

·	resource estimates;

·	the timing and sources of our future funding.

Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which may cause the actual results to differ materially from the anticipated future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forward in the forward-looking statements include, but are not limited to:

·	changes in general business or economic conditions;

·	changes in legislation or regulation that affect our business;

·	our ability to obtain necessary regulatory approvals and permits;

·	our ability to receive approvals from the ERCB for additional tests to further evaluate ~~or produce~~ the wells on our lands;

·	opposition to our regulatory requests by various third parties;

·	actions of aboriginals, environmental activists and other industrial disturbances;

·	the costs of environmental reclamation of our lands;

·	availability of labor or materials or increases in their costs;

·	the availability of sufficient capital to finance our business plans on terms satisfactory to us;

·	adverse weather conditions and natural disasters;

·	risks associated with increased insurance costs or unavailability of adequate coverage;

·	volatility of oil and natural gas prices;

·	competition;

·	changes in labor, equipment and capital costs;

·	future acquisitions or strategic partnerships;

·	the risks and costs inherent in litigation;

·	imprecision in estimates of reserves, resources and recoverable quantities of oil and natural gas;

·	product supply and demand;

·	fluctuations in currency and interest rates; and

·	the additional risks and uncertainties, many of which are beyond our control, referred to elsewhere in this annual report on Form 10-K and in our other SEC filings.

The preceding bullets outline some of the risks and uncertainties that may affect our forward-looking statements. For a full description of risks and uncertainties, see the sections elsewhere in this annual report on Form 10-K entitled “Risk Factors” and “Environmental Laws and Regulations”. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Any forward-looking statement speaks only as of the date on which it was made and, except as required by law, we disclaim any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q, 8-K and any other SEC filing or amendments thereto should be consulted.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 under the Exchange Act and therefore are not required to provide the information required under this item.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MADSEN & ASSOCIATES, CPA’S INC.	684 East Vine St. Suite 3
Certified Public Accountants and Business Consultants	Murray, Utah 84107
	Telephone 801-268-2632
	Fax 801-262-3978

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Deep Well Oil & Gas, Inc. and Subsidiaries (an Exploration Stage Company)

To the Board of Directors and Stockholders of Deep Well Oil & Gas, Inc. and Subsidiaries (an Exploration Stage Company) We have audited the accompanying consolidated balance sheets of Deep Well Oil & Gas, Inc. and Subsidiaries (an Exploration Stage Company) (the Company) as of September 30, ~~2010~~2011 and ~~2009,~~2010, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the ~~three-year~~two-year period ended September 30, ~~2010,~~2011, and for the period from September 10, 2003 (date of inception) to September 30, ~~2010.~~2011. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Deep Well Oil & Gas, Inc. and Subsidiaries (an Exploration Stage Company) as of September 30, ~~2010~~2011 and ~~2009,~~2010, and the consolidated results of its operations and its cash flows for each of the years in the ~~three-year~~two-year period ended September 30, ~~2010,~~2011, and for the period from September 10, 2003 (date of inception) to September 30, ~~2010~~2011 in conformity with accounting principles generally accepted in the United States of America.

Madsen & Associates CPA’s, Inc.

Murray, UT

December ~~23, 2010~~28, 2011

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

Consolidated Balance Sheets

September 30, ~~2010~~2011 and September 30, ~~2009~~2010

	September 30, 2010			September 30, 2009			September 30, 2011			September 30, 2010

ASSETS
Current Assets
Cash and cash equivalents	$	103,550		$	945,835		$	723,766		$	103,550
Accounts receivable		195,751			990,239
Accounts receivable net of allowance of $350,298 (2010 – $182,201)								34,727			195,751
Accounts receivable – related party (Note 9)								2,522			–
Prepaid expenses		86,717			95,951			48,298			86,717

Total Current Assets		386,018			2,032,025			809,313			386,018

Long Term Investments (Note 5)		247,473			77,036
Long term investments (Note 8)								247,937			247,473
Oil and gas properties (Note 3)		12,726,396			12,221,352			13,140,951			12,726,396
Property & equipment net of depreciation (Note 4)		563,860			752,760
Property and equipment net of depreciation (Note 7)								425,895			563,860

TOTAL ASSETS	$	13,923,747		$	15,083,173		$	14,624,096		$	13,923,747

LIABILITIES
Current Liabilities
Accounts payable	$	42,147		$	34,049		$	18,926		$	42,147
Accounts payable – related parties (Note 6)		86,774			–
Deposits on stock subscription (Note 7)		48,555
Accounts payable – related parties (Note 9)								202,638			86,774
Deposits on stock subscription (Note 10)								–			48,555

Total Current Liabilities		177,476			34,049			221,564			177,476

Asset retirement obligations (Note 8)		386,934			358,235
Asset retirement obligations (Note 11)								387,368			386,934

TOTAL LIABILITIES		564,410			392,284			608,932			564,410

SHAREHOLDERS’ EQUITY
Common stock: (Note 9)
Common stock: (Note 12)
Authorized: 300,000,000 shares at $0.001 par value
Issued and outstanding: 106,774,258 shares
(September 2009 – 106,774,258 shares) (Note 9)		106,773			106,773
Issued and outstanding: 136,739,971 shares
(September 30, 2010 – 106,774,258 shares) (Note 12)								136,739			106,773
Additional paid in capital		24,743,763			24,743,763			27,058,078			24,743,763
Deficit accumulated during exploration stage		(11,491,199	)		(10,159,647	)		(13,179,653	)		(11,491,199	)

Total Shareholders’ Equity		13,359,337			14,690,889			14,015,164			13,359,337

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	13,923,747		$	15,083,173		$	14,624,096		$	13,923,747

See accompanying notes to the consolidated financial statements

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended September 30, 2011, 2010 ~~2009 and 2008~~ and the Period from September 10, 2003 (Inception of

~~(Inception of~~ Exploration Stage) to September 30, ~~2010~~2011

	2011			2010			September 10, 2003 to September 30, 2011

Revenue	$	–		$	–		$	–

Expenses
General & Administrative		1,536,211			1,119,130			12,974,991
Depreciation and accretion		162,140			217,605			542,046

Net loss from operations		(1,698,351	)		(1,336,735	)		(13,517,037	)

Other income and expenses
Rental and other income		5,538			160			23,771
Interest income		4,011			5,023			210,083
Interest expense		–			–			(208,580	)
Forgiveness of loan payable		–			–			287,406
Settlement of debt		–			–			24,866
Gain/Loss on disposal of assets		348			–			(162	)

Net loss and comprehensive loss	$	(1,688,454	)	$	(1,331,552	)	$	(13,179,653	)

Net loss per common share
Basic and Diluted	$	(0.01	)	$	(0.01	)

Weighted Average Outstanding Shares (in thousands)
Basic and Diluted		136,412			106,774

2010 2009 2008
September 10,
2003 to
September 30,
2010

Revenue $ – $ – $ – $ –

Expenses
General and Administrative 1,119,130 2,068,176 2,769,379 10,515,638
Depreciation and accretion 217,605 146,261 13,706 379,906
Share based compensation – 5,802 111,815 923,142

Net loss from operations (1,336,735 ) (2,220,239 ) (2,894,900 ) (11,818,686 )

Other income and expenses ��
Rental and other income 160 18,073 – 18,233
Interest income 5,023 34,826 100,070 206,072
Interest expense – (3 ) (715 ) (208,580 )
Forgiveness of loan payable – – – 287,406
Settlement of debt – – – 24,866
Loss on disposal of asset – – (510 ) (510 )

Net loss and comprehensive loss $ (1,331,552 ) $ (2,167,343 ) $ (2,796,055 ) $ (11,491,199 )

Net loss per common share
Basic and Diluted $ (0.01 ) $ (0.02 ) $ (0.03 )

Weighted Average Outstanding Shares (in thousands)
Basic and Diluted 106,774 105,713 85,002

See accompanying notes to the consolidated financial statements

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Period from September 10, 2003 (Inception of Exploration Stage) to September 30, ~~2010~~2011

										Capital																	Capital
							Additional			Stock														Additional			Stock
	Common Shares						Paid in			Subscriptions		Accumulated						Common Shares						Paid in			Subscriptions		Accumulated
	Shares			Amount			Capital			Received		Deficit			Total			Shares			Amount			Capital			Received		Deficit			Total

Balance at September 10, 2003		991,918		$	992		$	(992	)	$	–	$	–		$	–
Balance at
September 10, 2003																			991,918		$	992		$	(992	)	$	–	$	–		$	–

Issuance of common stock pursuant to bankruptcy agreement September 10, 2003		36,019,556			36,019			13,981			–		–			50,000
Issuance of common stock
pursuant to bankruptcy
agreement September 10, 2003																			36,019,556			36,019			13,981			–		–			50,000

Net operating loss for the period September 10 to September 30, 2003		–			–			–			–		(50,000	)		(50,000	)
Net operating loss for
the period September 10
to September 30, 2003																			–			–			–			–		(50,000	)		(50,000	)

Balance at September 30, 2003		37,011,474			37,011			12,989			–		(50,000	)		–			37,011,474			37,011			12,989			–		(50,000	)		–

Return and cancellation of common shares		(5,775,000	)		(5,775	)		5,775			–		–			–
Return and cancellation
of common shares																			(5,775,000	)		(5,775	)		5,775			–		–			–

Net operating loss for the year ended September 30, 2004		–			–			–			–		(525,754	)		(525,754	)
Net operating loss for the
year ended September 30, 2004																			–			–			–			–		(525,754	)		(525,754	)

Balance at September 30, 2004		31,236,474			31,236			18,764			–		(575,754	)		(525,754	)
Balance at
September 30, 2004																			31,236,474			31,236			18,764			–		(575,754	)		(525,754	)

Issuance of common stock
Private placement March 10, 2005
- Shares		1,875,000			1,875			527,940			–		–			529,815			1,875,000			1,875			527,940			–		–			529,815
- Warrants (787,500)		–			–			205,185			–		–			205,185			–			–			205,185			–		–			205,185
Share exchange June 7, 2005
- Shares		18,208,875			18,209			2,476,497			–		–			2,494,706			18,208,875			18,209			2,476,497			–		–			2,494,706
- Conversion rights of preferred shares of subsidiary		–			–			–			1,777,639		–			1,777,639
- Conversion rights of preferred
shares of subsidiary																			–			–			–			1,777,639		–			1,777,639
Private placement August 12, 2005
- Shares		710,946			711			151,638			–		–			152,349			710,946			711			151,638			–		–			152,349
- Warrants (710,946)		–			–			132,030			–		–			132,030			–			–			132,030			–		–			132,030

Common stock subscription received		–			–			–			250,000		–			250,000			–			–			–			250,000		–			250,000

Net operating loss for the year ended September 30, 2005		–			–			–			–		(1,262,549	)		(1,262,549	)
Net operating loss for the
year ended September 30, 2005																			–			–			–			–		(1,262,549	)		(1,262,549	)

Balance at September 30, 2005		52,031,295			52,031			3,512,054			2,027,639		(1,838,303	)		3,753,421			52,031,295			52,031			3,512,054			2,027,639		(1,838,303	)		3,753,421

See accompanying notes to the consolidated financial statements

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)

For the Period from September 10, 2003 (Inception of Exploration Stage) to September 30, ~~2010~~2011

Balance carried forward at September 30, 2005

Net operating loss for the year ended September 30, 2006

See accompanying notes to the consolidated financial statements

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)

For the Period from September 10, 2003 (Inception of Exploration Stage) to September 30, ~~2010~~2011

- Share value transferred from warrants

- Warrants cancelled (500,000)

- Share value transferred from warrants

year ended September 30, 2007

- Warrants expired (3,150,000) (Note 8)

- Warrants (12,500,000) (Note 8)

- Special warrants (2,000,000) (Note 8)

- Warrants expired (73,000) (Note 8)

Net operating loss for the year ended September 30, 2009

See accompanying notes to the consolidated financial statements

DEEP WELL OIL & GAS, INC. (AND SUBSIDIARIES)

(Exploration Stage Company)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)

For the Period from September 10, 2003 (Inception of Exploration Stage) to September 30, ~~2010~~2011

- Warrants expired (984,375) (Note 8)

- Warrants expired (5,000,000) (Note 8)

Year ending September 30,	2010		2009		2008		2007		2011		2010		2009		2008

Rate at end of year	$	1.0298	$	1.0722	$	1.0599	$	0.9963	$	0.9626	$	1.0298	$	1.0722	$	1.0599
Average rate for the year	$	1.0407	$	1.1804	$	1.0092	$	1.1132	$	0.9866	$	1.0407	$	1.1804	$	1.0092

2011	$	45,158
2012	$	45,158	$	45,158
2013	$	45,158	$	45,158
2014	$	45,158	$	45,158
2015	$	45,158	$	45,158
2016	$	45,158	$	45,158
Subsequent	$	134,042	$	134,042

	2011			2010

Unproved Oil and Gas Properties	$	13,165,546		$	12,743,184
Proved Oil and Gas Properties		–			–
Accumulated Depreciation		(24,595	)		(16,788	)

Net Capitalized Cost	$	13,140,951		$	12,726,396

	September 30, 2010						September 30, 2011
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Depreciation		Value		Cost		Depreciation		Value

Computer Equipment	$	31,460	$	25,607	$	5,853
Computer equipment							$	30,655	$	28,060	$	2,595
Office furniture and equipment		33,476		14,580		18,896		33,199		18,141		15,058
Software		5,826		5,826		–		5,826		5,826		–
Leasehold improvements		4,935		1,612		3,323		4,936		2,277		2,659
Portable work camp		170,580		69,085		101,495		170,580		99,533		71,047
Vehicles		38,077		15,421		22,656		38,077		22,218		15,859
Oilfield equipment		154,713		42,175		112,538		154,713		64,682		90,031
Road Mats		364,614		147,669		216,945
Road mats								364,614		212,752		151,862
Wellhead								3,254		407		2,847
Tanks		96,085		13,931		82,154		96,085		22,148		73,937
	$	899,766	$	335,906	$	563,860	$	901,939	$	476,044	$	425,895

	September 30, 2009						September 30, 2010
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Depreciation		Value		Cost		Depreciation		Value

Computer Equipment	$	31,460	$	18,552	$	12,908	$	31,460	$	25,607	$	5,853
Office furniture and equipment		33,476		9,856		23,620		33,476		14,580		18,896
Software		5,826		5,826		–		5,826		5,826		–
Leasehold improvements		4,935		781		4,154		4,935		1,612		3,323
Portable work camp		170,580		25,587		144,993		170,580		69,085		101,495
Vehicles		38,077		5,712		32,365		38,077		15,421		22,656
Oilfield equipment		148,352		14,835		133,517		154,713		42,175		112,538
Road Mats		364,614		54,692		309,922
Road mats								364,614		147,669		216,945
Tanks		96,085		4,804		91,281		96,085		13,931		82,154
	$	893,405	$	140,645	$	752,760	$	899,766	$	335,906	$	563,860

Equity Compensation Plan Category	(a) Number of Securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted-average exercise price of outstanding options, warrants and rights		(c) Number of Securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders		3,378,500	$	0.69		7,298,926	*

Equity compensation plans not approved by security holders	None		None		None

Total		3,378,500	$	0.69		7,298,926	*

	2011		2010

Acquisition of Properties:
Proved	$	–	$	–
Unproved		422,362		513,438
Exploration costs		163,914		29,217
Development costs		–		–

	Shares Underlying Options Outstanding						Shares Underlying Options Exercisable
Range of Exercise Prices	Shares Underlying Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Shares Underlying Options Exercisable		Weighted Average Exercise Price

$0.47 at September 30, 2010		276,000		1.97	$	0.47		276,000	$	0.47
$0.71 at September 30, 2010		3,102,500		0.27		0.71		3,102,500		0.71

		3,378,500		0.41	$	0.69		3,378,500	$	0.69

	Number of Shares		Weighted Average Exercise Price		Weighted Average Fair Market Value

Balance, September 30, 2008, 2009 and 2010		3,378,500	$	0.69	$	0.27

Exercisable, September 30, 2010		3,378,500	$	0.69	$	0.27

	Non-Vested Options
	Number of Shares			Weighted Average Exercise Price
Non-vested at September 30, 2010 and 2009		–		$	–
Options issued March 23, 2011		2,700,000			0.14
Options vested at September 30, 2011		(900,000	)		0.14

Non-vested at September 30, 2011		1,800,000		$	0.14

									September			September
	2010		2009			2008			30, 2011			30, 2010

Accounts receivable	$	612,378	$	(584,413	)	$	(325,744	)	$	(11,542	)	$	612,378
Prepaid expenses		9,234		110,879			(33,387	)		38,419			9,234
Accounts payable		94,872		(929,197	)		656,090			92,643			94,872

	$	716,484	$	(1,402,731	)	$	296,959		$	119,520		$	716,484

	Year Ended September 30, 2011			Year Ended September 30, 2010

Statutory and effective tax rate
Domestic
Statutory U.S. federal rate		35.00	%		35.00	%
Foreign		26.50	%		29.00	%

	Year Ended September 30, 2010			Year Ended September 30, 2009			Year Ended September 30, 2011			Year Ended September 30, 2010

Statutory and effective tax rate
Domestic
Statutory U.S. federal rate		35.00	%		35.00	%
Foreign		29.00	%		29.00	%

Income taxes recovered at the statutory and effective tax rate
Domestic
Statutory U.S. federal rate	$	59,360		$	289,500		$	149,187		$	59,360
Foreign		336,966			388,658			292,549			336,966

Timing differences:
Non-deductible expenses		(62,102	)		(115,775	)		(120,107	)		(62,102	)
Financing fees		497			801			–			497
Other deductible charges		2,474			2,067			2,188			2,474
Benefit of tax losses not recognized in the year		(337,195	)		(565,251	)		(323,817	)		(337,195	)

Income tax recovery (expense) recognized in the year	$	–		$	–		$	–		$	–

2011	$	71,546
2012	$	73,380	$ 73,380
2013	$	47,647	$ 47,647
2014	$	10,625	$ 10,625

As at September 30, ~~2010~~2011
Name	Age	Position/Office

Dr. Horst A. Schmid	7778	Director and Chairman of the Board, President and Chief Executive Officer
Mr. Said Arrata	71	Director
Mr. Satya Brata Das	55	Director
Mr. David Roff	3940	Director
Mr. Curtis James Sparrow	5354	Director and Chief Financial Officer, Secretary and Treasurer
Mr. Malik Youyou	5758	Director

As at September 30, ~~2010~~			2011
Name	Year When First Appointed as Director

Dr. Horst A. Schmid	2004	Non-independent director
Mr. Said Arrata	2011	Independent director
Mr. Satya Brata Das	2011	Independent director
Mr. David Roff	2006	Non-independent director
Mr. Curtis James Sparrow	2004	Non-independent director
Mr. Malik Youyou	2008	Independent director

Executive Compensation Summary	Executive Compensation Summary																					Executive Compensation Summary

Name and Principal Position		Fiscal Year Sept. 30	Fee ($Cdn)			Bonus $		Stock Awards $		Option Awards $			Non-Equity Incentive Plan Compen- sation $		Non- qualified Deferred Compen- sation Earnings $		All Other Compen- sation $			Total ($US)			Fiscal Year Sept. 30	Fee ($Cdn)			Bonus $		Stock Awards $		Option Awards $			Non-Equity Incentive Plan Compensation $		Non-qualified Deferred Compensation Earnings $		All Other Compensation $			Total ($US)

Dr. Horst A. Schmid (1)		2010	$	150,000	(2)	$	–	$	–	$		(3)	$	–	$	–	$	4,000	(4)	$	149,665		2011	$	150,000	(2)	$	–	$	–	$	32,958	(3)	$	–	$	–	$	2,000	(4)	$	179,348
President and		2009		150,000	(2)		–		–		–			–		–		3,000	(4)		142,905		2010		150,000	(2)		–		–		–			–		–		4,000	(4)		149,665
Chief Executive Officer

Mr. Curtis James Sparrow (5)		2010	$	180,000	(6)	$	–	$	–	$		(7)	$	–	$	–	$	2,000	(8)	$	176,798		2011	$	180,000	(6)	$	–	$	–	$	32,958	(7)	$	–	$	–	$	1,000	(8)	$	207,226
Chief Financial Officer		2009		180,000	(6)		–		–		–			–		–		1,500	(8)		169,386		2010		180,000	(6)		–		–		–			–		–		2,000	(8)		176,798

Mr. David Roff (9)		2010	$	–		$	–	$	–	$	–		$	–	$	–	$	2,000	(12)	$	2,000
Consultant		2009		144,000	(10)		–		–		5,713	(11)		–		–		1,500	(12)		141,522

Mr. Edward Howard (13)		2010	$	–		$	–	$	–	$	–	(15)	$	–	$	–	$	–		$	–
Geologist		2009		194,700	(14)		–		–		–			–		–		–			181,597

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS As of September 30, 2011
Name and Address of Beneficial Owner	Title of Class	Number of Shares Beneficially Owned (1) (2)		Percentage of Class Beneficially Owned			Nature of Ownership

Malik Youyou Director Sadovnicheskeya nab 69 Moscow 115035, Russia	Common		112,098,109		61.95	% (3)	Direct and Indirect

LB (Swiss) Private Bank Ltd. Beneficial Owner of 5% or more Boersenstrasse 16 Postfach Zurich CH-8022, Switzerland	Common		12,115,276		8.86	(4)	Direct

Dr. Horst A. Schmid Director and Chairman of the Board, President and Chief Executive Officer Suite 700, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada	Common		2,100,000		1.53	%(5)	Direct and Indirect

Mr. Satya Brata Das Director Suite 710, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada	Common		1,847,370		1.34	% (6)	Direct and Indirect

Mr. Said Arrata Director Suite 2320, 255 – 5 Avenue S.W. Calgary, Alberta T2P 3G6 Canada	Common		650,000		*	(7)	Direct

Mr. David Roff Director 27 Chicora Avenue Toronto, Ontario M5R 1W7 Canada	Common		604,886		*	(8)	Direct

Mr. Curtis James Sparrow Director, Chief Financial Officer, Corporate Secretary and Treasurer Suite 700, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada	Common		150,000		*	(9)	Direct

All Officers and Directors as a Group	Common		117,450,365		64.24	%	Direct and Indirect

Fee Category	Fiscal 2010 Fees		Fiscal 2009 Fees		Fiscal 2011 Fees		Fiscal 2010 Fees

Audit Fees	$	13,300	$	10,950	$	21,675	$	19,275
Audit Related Fees		5,775		5,550		–		–
Tax Fees	Nil		Nil			–		–
All Other Fees	Nil		Nil			–		–
Total Fees	$	19,075	$	16,500	$	21,675	$	19,075

Exhibit No.		Description
2.1		Liquidating Plan of Reorganization of Allied Devices Corporation, now known as Deep Well Oil & Gas, Inc., (incorporated by reference to exhibit 2.1 to our Form 10-K/A filed on January 28, 2004).

2.2		Order and Plan of Reorganization of the U.S. Bankruptcy Court in and for the Eastern District of New York, In re: Allied Devices Corporation, Chapter 11, Case No. 03-80962-511, dated September 10, 2003, (incorporated by reference to exhibit 2.2 to our Form 10-K/A filed on January 28, 2004).

3.1		Restated and Amended Articles of Incorporation filed with and accepted by the Secretary of State of Nevada on October 22, 2003, changing the name to “Deep Well Oil and Gas, Inc.” and otherwise implementing the Plan, (incorporated by reference to exhibit 3.1 to our Form 10-K/A filed on January 28, 2004).

3.2		Amended Articles of Incorporation filed with the State of Nevada on February 27, 2004, reflecting our two (2) shares for one (1) share forward stock split, (incorporated by reference to exhibit 3.1 to our Form 8-K filed on March 5, 2004).

3.3		Amended Articles of Incorporation filed with the State of Nevada on May 5, 2004, reflecting our three (3) shares for one (1) share forward stock split, (incorporated by reference to exhibit 3.2 to our Form 8-K filed on May 7, 2004).

3.4		Registrant’s By-laws, filed with Form 10-KSB on February 23, 2007, (incorporated by reference to exhibit 3.4 to our Form 10-KSB filed on February 23, 2007).
3.5		Registrant’s Amended and Restated By-laws, filed with Form 8-K on September 3, 2009, (incorporated by reference to exhibit 3.1 to our Form 8-K filed on September 3, 2009).
~~4.1~~		Form of Warrant issued pursuant to the Subscription Agreement dated August 14, 2008 by and among our Company with one investor related to the Private Placement offering, (incorporated by reference to exhibit 4.2 to our Form 8-K filed on August 15, 2008).
~~4.2~~		Form of Fractional Warrant issued pursuant to the Subscription Agreement dated August 14, 2008 by and among our Company with one investor related to the Private Placement offering, (incorporated by reference to exhibit 4.3 to our Form 8-K filed on August 15, 2008).
~~4.3~~4.1		Form of Fractional Warrant issued pursuant to the Subscription Agreement dated October 31, 2008 by and among our Company with one investor related to the Private Placement offering, (incorporated by reference to exhibit 4.2 to our Form 8-K filed on November 7, 2008).
~~4.4~~
4.2		Form of Fractional Warrant issued pursuant to the Subscription Agreement dated October 31, 2008 by and among our Company with one investor related to the Private Placement offering, (incorporated by reference to exhibit 4.3 to our Form 8-K filed on November 7, 2008).


4.5		Form of Warrant issued pursuant to two Subscription Agreements dated November 9, 2010 by and among our Company with two investors related to two Private Placement offerings, (incorporated by reference to exhibit 4.2 to our Form 8-K filed on November 15, 2010).

10.1*		Consulting agreement by and between Northern and Portwest Investments Ltd., dated July 1, 2005, (incorporated by reference to exhibit 10.16 to our Form 10-KSB filed on February 23, 2007).

10.2*		Consulting agreement by and between Northern and Concorde Consulting, dated July 1, 2005, (incorporated by reference to exhibit 10.17 to our Form 10-KSB filed on February 23, 2007).

~~10.3~~10.3*		Deep Well Oil & Gas, Inc. Stock Option Plan (“The Plan”), effective November 28, 2005, (Form 8-K filed on March 3, 2006).

10.4*		Sample Stock Option Agreements with all Directors, (incorporated by reference to exhibit 10.25 to our Form 10-KSB filed on February 23, 2007).

10.5*		Sample Stock Option Agreements with all Contractors, (incorporated by reference to exhibit 10.26 to our Form 10-KSB filed on February 23, 2007).

10.6		Sample Indemnity Agreement with all Directors, (incorporated by reference to exhibit 10.27 to our Form 10-KSB filed on February 23, 2007).

10.7		Non-Qualified Stock Option Agreement issued to R.N. Dell Energy Ltd. effective September 20, 2007, (incorporated by reference to exhibit 10.9 to our Form 10-QSB filed on October 30, 2007).

10.8		Non-Qualified Stock Option Agreement issued to Employee, effective September 20, 2007,(incorporated by reference to exhibit 10.10 to our Form 10-QSB filed on October 30, 2007).

10.9		Form of Subscription Agreement dated August 14, 2008 by and among our Company with one investor, (incorporated by reference to exhibit 4.1 to our Form 8-K filed on August 15, 2008).

10.10		Form of Subscription Agreement dated October 31, 2008 by and among our Company with one investor, (incorporated by reference to exhibit 4.4 to our Form 8-K filed on August 15, 2008).

10.11		Form of Subscription Agreement dated November 9, 2010 by and among our Company with two investors, (incorporated by reference to exhibit 4.1 to our Form 8-K filed on November 15, 2010).

21.1		Subsidiaries of Registrant, filed herewith.

31.1		Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a), filed herewith.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a), filed herewith.

32.1		Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, filed herewith.

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, filed herewith.

101		Interactive Data Files

	DEEP WELL OIL & GAS, INC.

	By	/s/ Dr. Horst A. Schmid
		Dr. Horst A. Schmid
		Chairman of the Board

	Date	December ~~23, 2010~~29, 2011

	By	/s/ Dr. Horst A. Schmid
		Dr. Horst A. Schmid
		Chief Executive Officer and President
		(Principal Executive Officer)

	Date	December ~~23, 2010~~29, 2011

	By	/s/ Curtis James Sparrow
		Mr. Curtis James Sparrow
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

	Date	December ~~23, 2010~~29, 2011