Sawn Lake oil sands properties. our Former Farmout Partner. 2011. 2013. section. Project. exploit the resource. We are currently updating our reserves report. 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 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 $15,612,645 Cdn; 5.) An order to sell John Forbes Brown’s home; and 6.) Interest and costs. against Deep Well as set out in the Plaintiffs Amended Statement of Claim as described above. And on October 10, 2013, the expiry date of the warrants was extended, by way of an amending agreement, to November 23, 2015, as approved by our Board of Directors. 2013. References in this Form 10-K to “$” are to United States dollars and references to “Cdn $” are to Canadian dollars. On December 31, 2013, the noon rate of exchange for Canadian dollars expressed in US $ was Cdn $1.00 = US $0.9402, as reported by the Bank of Canada. Effective December 3, 2012, we entered into and Company. Also, on July 31, 2013, we completed another private placement financing with one investor for aggregate gross cash proceeds of $22,000,000. Also as disclosed above, on July 30, 2013 our Company entered into a Farmout Agreement dated July 31, 2013 to fund our Company’s share of a recently AER approved SAGD Demonstration Project. notes to the consolidated financial statements for further information. Company’s wellsites. our transfer agent. conformity with U.S. generally accepted accounting principles. 14, 2014 2455 E. Parleys Way Suite 320, Salt Lake City, UT 84109 2012 2013 2013 2013 2013 2013 2013 2012 The allowance for bad debts was $17,048 and $243,752 at September 30, 2013 and September 30, 2012 respectively. See note 16 for a description of amounts relating to this balance. 2012. There were 48,064,693 common stock equivalents excluded from the calculation because their effect would be antidilutive. statements. 2012. 2012: 2012: $104,033) $327,459), $98,500 of expenses related to Portwest was reversed as part of the Amending Agreement, referred to note 15. These amounts are included in the balance of accounts payable – related parties as of September 30, 2013. and the warrants totaled $1,985,249 and $1,014,751, respectively. 16, 2013, (the “Record Date”). This cash distribution to the Company’s shareholders was not a dividend paid out of the earnings and profits, but was a non-dividend distribution characterized as a “return of capital”. 2013: 2013: are non-transferable and vest over time, and are “American” options. Option pricing models require the input of subjective assumptions including expected share price volatility. The fair value estimate can vary materially as a result of changes in the assumptions. The following assumptions are used in the Black-Scholes option-pricing model: 2013 (September 30, 2012 - 900,000). for Stock Options imposed. This amount is included in Rental and Other Income. 2013. With more than three decades of business experience in highly competitive global markets, beginning in his native France, Mr. Youyou brings a strong international perspective to Deep Well's Board. Mr. Youyou has created and led several companies involved in the development, branding, and marketing of luxury goods from leading international houses. Directors L.L.C. 2012: 2013.signedentered into a farmout agreement (hereinafter referred to as the “Farmout Agreement”Agreement dated February 25, 2005”) 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” or our “Former Farmout Partner”) (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 71.8% owned by Pan Orient as of November 26, 2012). This Farmout Agreementagreement allowed Surge 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 ourNorthern’s working interest in 12 sections on two oil sands leases. As part of the transfer to Signet of the 40% working interest, two of the original oil sands leases were split into four oil sands leases.Deep Well, through its subsidiaries, Deep Well Alberta and Northern,we entered into and subsequently closed upon a Purchase and Sale agreement with Deep Well’sour former joint venture partner, 1132559 Alberta Ltd. (“113”(hereinafter referred to as “113”), pursuant to which we acquired 113’s 10% working interest in most of the Sawn Lake oil sands properties where Deep Wellwe already owned working interests. AfterAs of December 3, 2012, after this acquisition, Deep Well, through its subsidiaries, Deep Well Alberta and Northern, now has a 90% working interest in 51 contiguous sections on seven oil sands leases where we are the operator, an 80% working interest in 5 sections on one oil sands lease, and a 50% working interest in an additional 12 contiguous sections on two oil sands leases in the Peace River oil sands area of Alberta, Canada. This transactionour Company increased Deep Well’sour net acres in the Sawn Lake oil sands properties from 31,376 to 35,36035,361 net acres (12,698 to 14,310 net hectares).7Deep Well, through its subsidiaries, Northern and Deep Well Alberta, haswe have a 90% working interest in 51 contiguous sections on sevensix oil sands leases where we are the operator, an 80% working interest in 5 sections on one oil sands lease where we are the operator, and a 50%25% working interest (after the Farmout Agreement dated July 31, 2013) 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 are all contiguous and cover 43,015 gross acres (17,408 gross hectares) with Deep Wellour Company having 35,36033,463 net acres (14,310after the Farmout Agreement dated July 31, 2013 (13,542 net hectares). The focus of our Company’s operations is to exploit the heavy oil reservoir to establish proven 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.by our former farmout partner under ourthe Farmout Agreement dated February 25, 2005, and an interest in an additional two wells that we subsequently acquired.acquired from an unrelated third party. Since then we have been evaluating the options for production available to us to determine the preferable course of action. Drilling on 80% and now 90% owned lands hashave opened new avenues for testing and further development of our Sawn Lake project. We have put together and have been working with a teamIn the fourth quarter of independent reservoir engineers, facility engineers, environmental consultants and drilling and completions engineers to move forward on2013, we received approval from the development ofAER for our reservoir using horizontal cyclic steam stimulation (“HCSS”)(hereinafter referred to as the “HCSS Project”) thermal recovery method.project application. It is anticipated that we will develop a thermal pilotdemonstration project on our properties followed by a commercial expansion project. We are currently waitingproject on approval from the ERCBone half section of land located on section 10-92-13W5 of our revised thermal in-situ recovery application.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”).Surge Global Energy, Inc. and Signet (collectively “Surge” now known as Andora)our Former Farmout Partner agreed that our Company would be responsible for the portion of the claimed 6.5% royalty payable by Surge,our Former Farmout Partner, if any, on lands earned under the Farmout Agreement dated February 25, 2005 Farmout Agreement.2005. This liability could arise by virtue of a Royalty Agreement between Northern and Nearshore dated December 12, 2003. This potential obligation of our Company was further modified on November 26, 2007, when it was agreed between our Company and Andoraour Former Farmout Partner that our Company would not be liable or obligated to pay any of this claimed portion of the royalty due, if any, on the 3% portion of the royalty acquired by Andora. TheInvestment 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 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.2011 and 2010.ITEM1 A.RISK FACTORS1020122013 and 20112012 we reported net losses of $2,463,403 and $1,095,050 and $1,688,454 respectively.operatingacquiring regulatory approval for thermal recovery operations on our 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. 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 downslowdown of our operations, which will adversely affect our business.Andora currently operates 12 of our 68 sections in whichCurrently, we have a working interest. Currently, Deep Well, through its subsidiaries, Northern and Deep Well Alberta, currently has a 90% working interest in 51 contiguous sections on sevensix oil sands leases, an 80% working interest in 5 contiguous sections on one oil sands leases,lease, where we are the operator of the 80% and 90% leases. We also have a 50%25% working interest (after the Farmout Agreement dated July 31, 2013) in an additional 12 contiguous sections on two oil sands leases that Andora operates.where one of our joint venture partners is the operator. These nine oil sands leases, which are all contiguous, cover 43,015 gross acres (17,408 gross hectares) where Deep Wellwe currently has 35,360have 33,463 net acres (14,310(13,542 net hectares). All nine oil sands leases are located in the Peace River oil sands area of Alberta, Canada. Our lack of operational control of the 12 sections, Andora currently operatesnot operated by us, could result in the following:· ·AndoraThe Operator might initiate exploration or development on a faster or slower pace than we prefer;· ·AndoraThe Operator 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 or decline to participate in the project or share in the revenues generated by the project;· If Andorathe Operator refuses to initiate a project on these 12 sections, we might be unable to pursue a project on those sections unless we directly pay the entire cost thereof. In such a scenario, the Joint Operating Agreements governing the relationship of the joint interest owners in Sawn Lake allow usa party to recoup the costs which we payare paid on behalf of other non-participating joint owners in addition to penalties because of their non-participation.Some Lawsuitsa Lawsuit And Will Be Adversely Affected If We Are Found To Be Liable In Connection With Any Legal Proceedings.We are party to some lawsuitsa lawsuit described in this annual report on Form 10-K under the heading “Legal Proceedings”. We intend to vigorously defend ourselves against the claims made in the lawsuits,lawsuit, 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.ERCBAER 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 ERCBAER 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.tointo 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 upcleanup 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.ITEM 1B.UNRESOLVED STAFF COMMENTSITEM 2.PROPERTIESthethis lease expiresexpired on December 31, 2013. We alsoare currently negotiating the terms of entering into a new lease for our Edmonton office space. We previously leased and maintainmaintained an office space in Calgary, Alberta; this lease expired on November 30, 2012 and willwas not be renewed.Deep Well, through its subsidiaries, Northern and Deep Well Alberta, haswe have a 90% working interest in 51 sections on sevensix oil sands leases, an 80% working interest in 5 sections on one oil sands lease, and a 50%25% working interest (after the Farmout Agreement dated July 31, 2013) in an additional 12 sections on two oil sands leases in the Peace River oil sands area of Alberta, all of these sections are contiguous. These nine oil sands leases cover 43,015 gross acres (17,408 gross hectares). Of the 68 contiguous sections on nine oil sands leases, Andoraone of our joint venture partners is the operator of 12 sections on two oil sands leases in whichwhere we have a 50%25% working interest (after the Farmout Agreement dated July 31, 2013), and we are the operator on 56 sections on seven oil sands leases where we have working interestinterests of either 80% or 90%. For further information, see Oil and Gas Properties on our Balance Sheet and Note 3 and 4 of the notes to the consolidated financial statements included in this annual report on Form 10-K.
Effective December 3, 2012, we entered into and subsequently closed upon a purchase and sale agreement with 113, one of our former joint venture partners, pursuant to which we acquired 113’s 10% working interest in 8 oil sands leases in the Sawn Lake heavy oil reservoir in the Peace River area of Alberta. 
2012.Oil Sands Rights as of December 31, 2012 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 51 sections(1) 13,056 11,750 32,261 29,035 5 sections(2) 1,280 1,024 3,163 2,530 12 sections(3) 3,072 1,536 7,591 3,795 Total 17,408 12,698 43,015 �� 31,376 TOTAL HECTARES/ACRES 17,408 14,310 43,015 35,360 (1) 90% working interest.(2) 80% working interest(3) 50% working interest.OIL SANDS RIGHTS as of December 31, 2013 Gross Hectares Gross 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 13,056 11,750 32,261 29,035 1,280 1,024 3,163 2,530 3,072 768 7,591 1,898 Total 17,408 13,542 43,015 33,463 TOTAL HECTARES/ACRES 17,408 13,542 43,015 33,463 the land.these lands. If we meet the conditions of the 15-year leases we will be permitted to drill on and produce oil from the land into perpetuity. These conditions give us until the expiration of the leases to meet the following requirements on our primary oil sands leases:if we haveand having acquired and processed 2 miles of seismic on alleach other undrilled sections.2012,2013, we have an interest in ten wells, which can be counted toward these requirements.2two other wells drilled on these leases, which may be included in the satisfaction of the MLE requirements. We have also acquired and processed 25 miles of seismic on the leases, which can be counted toward the MLE requirements.2011 and 20102011 nor did we have any proven reserves at the end of such 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.thermal recovery project.Present Activitiesinterestventure partner to manage our joint oil sands leases, which are all based on the 1990 Canadian Association of Petroleum Landmen (“CAPL”(hereinafter referred to as “CAPL”) Operating Procedure. 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.Effective December 3, 2012, we entered into and subsequently closed upon a purchase and sale agreement with 113, one of our former joint venture partners, pursuant to which we acquired 113’s 10% working interest in the Sawn Lake heavy oil reservoir in the Peace River area of Alberta. This acquisition increased our net acreage from 12,698 net hectares to 14,310 net hectares, an increase of 12.7%.During the year ended September 30, 2012, we evaluated the options for production available to us to determine the preferable course of action for our Sawn Lake project. Being able to drill on lands now owned 90% by us has opened new avenues for testing and further development of our Sawn Lake project. We have worked with three independent reservoir engineering and modeling companies to prepare analyses of the Sawn Lake Bluesky reservoir resulting in the reservoir modeling simulation studies to determine the optimum strategy for us to develop our reservoir. Following these reservoir models and the recommendation of our independent reservoir engineers, we intend to develop a thermal recovery project on our properties, followed by a commercial expansion project. To further this goal our environmental consultants have completed an environmental assessment, as mandated by Alberta environmental regulations, in and around our proposed thermal recovery project located on our now 90% owned lands. We have also engaged drilling, completion and facilities engineers who have begun the planning and pre-drilling work for our HCSS pad site facility and horizontal well paths on the North half of section 10-92-13W5M. 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 do delay development of similar 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. Todate;To date; our geological, engineering and economic studies lead us to believe that our working interest can support full profitable commercial production.2012,2005, 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.· the Farmout Agreement dated February 25, 2005, being effectively terminated concurrently with the execution of the settlement agreement; and · our Former Farmout Partner 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 · our Former Farmout Partner being required to reconvey registered title to 57.5 unearned sections of the Farmout Lands, as defined in the Farmout Agreement dated February 25, 2005, back to us; and · our Company having the right to retest 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 our Former Farmout Partner in the Farmout Agreement dated February 25, 2005. ERCB to modify our previously approved in-situ pilot projectAER 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, and in late 2010 this application was approved by the AER to test thermal productionone of the wells using steam injection on a vertical well.leases. This modification seeks to changeleases in the vertical CSS well earlier approved, into aSawn Lake area based on using thermal recovery project to test 2 wells that use a horizontal application of CSS.Our proposed thermal recovery project will be located on the north half of section 10-92-13W5, which has good road access on hard packed roads recently built by Penn West Petroleum Ltd. (“Penn West”). The proposed thermal recovery project location is approximately 1.4 kilometers away from the nearest Penn West road. We intend to upgrade our existing winter road to section 10-92-13W5 to an all-weather road. We also intend to acquire the remaining road and build it as an all-weather road up to the proposed thermal recovery project site.Past ActivitiesOn 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 113 under which 113 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 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 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.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 of any of our existing wells confirming the continuation of the main reservoir trend 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, for heavy oil production in the Bluesky reservoir zone, by an unrelated third party. In addition, we currently have working interests 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. All of our exploratory wells were logged, cored and analyzed by independent expert service providers.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.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, and in late 2010 this application was approved by the ERCB to test one of the wells using steam injection.In July 2010, Chapman Petroleum Engineering Ltd. performed an independent technical evaluation of the heavy oil properties on some of our Sawn Lake properties. The report confirmed the suitability of the properties for employing thermal recovery methods on them. In addition, Chapman Petroleum Engineering Ltd. identified a new hydrocarbon bearing zone up-hole from the Bluesky zone presently being concentrated on by 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 zone. It is approximately 35 meters thick and is a massive, very fine to medium grain sandstone conformably deposited on the Harmon Shale. We intend to continue the development of the Bluesky reservoir and at the same time we intend to evaluate this newly discovered reservoir by coring future wells within this zone.In December 2010 and January 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 an economic evaluation of the oil sands leases in the Sawn Lake area based on using thermal recovery to exploit the resource.ITEM 3.LEGAL PROCEEDINGS“Defendants”“IGM 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 IGM Defendants.the14ththe 14th 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.TheOur Company believes the claims are without merit and will vigorously defend against them. As of September 30, 2012,2013, no contingent liability has been recorded, as we believe a successful outcome for IGM is remote.We plan to vigorously defend ourselves againstPlaintiff’s claims. As at September 30, 2012, no contingent liability has been recorded, as we believe a successful outcome forCourt of Queen's Bench of Alberta Judicial District of Calgary, by mutual consent of the parties, dismissing in its entirety the claims of the Plaintiff is remote.purchasePurchase and saleSale agreement, effective December 3, 2012, between us and 113, we have waived claims against 113 listed above.ITEM 4.(MINE SAFETY DISCLOSURES)ITEM 5.MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES High Low 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 Fiscal September 30, 2012 First Quarter $ 0.08 $ 0.03 Second Quarter $ 0.10 $ 0.03 Third Quarter $ 0.10 $ 0.06 Fourth Quarter $ 0.09 $ 0.03 High Low Fiscal September 30, 2012 First Quarter $ 0.08 $ 0.03 Second Quarter $ 0.10 $ 0.03 Third Quarter $ 0.10 $ 0.06 Fourth Quarter $ 0.09 $ 0.03 Fiscal September 30, 2013 First Quarter $ 0.08 $ 0.05 Second Quarter $ 0.08 $ 0.05 Third Quarter $ 0.09 $ 0.03 Fourth Quarter $ 0.50 $ 0.03 20, 2012,31, 2013, we had approximately 162165 holders of record of our shares of common stock. Our Company estimates that investment dealers and other nominees are the record holders for approximately 2,2602,230 beneficial holders.20122013 with respect to shares of Deep Well’s common stock that may be issued under our existing equity compensation plans. Equity Compensation Plan as of September 30, 2012 (a) (b) (c) Plan Category
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding
options, warrants
and rights 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 1,800,000 $ 0.14 11,873,997 ** Equity compensation plans not approved by security holders None None None Total 1,800,000 $ 0.14 11,873,997 ** * On March 23, 2011, our Board of Directors granted our 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, with one-third vesting immediately, one-third vesting on March 23, 2012, and one-third vesting on March 23, 2013, each with a five-year life from the original grant date. The options expire on March 23, 2016.** Based on 136,739,971 issued and outstanding shares as at September 30, 2012. The maximum number of common shares that may be reserved for issuance under the Equity Compensation Plan as of September 30, 2013 (a) (b) (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 4,350,000 (1) $ 0.07 18,582,699 (2) Equity compensation plans not approved by security holders – – – Total 4,350,000 $ 0.07 18,582,699 (2) may not exceed 10% of our Company’s issued and outstanding common shares.Stock Option PlanOn 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 unexercised.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 originally 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 expired unexercised on September 20, 2012.(the “Subscribers”)Mr. Malik Youyou and Cambridge Strategies Inc., of an aggregate of 29,285,713 units (“Units”) at a price of $0.07 per Unit,unit, for total gross proceeds of $2,050,000. Each Unitunit 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 theour 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.warrant holder. No commission or finder’s fees were payable in connection with these private placements. The Unitsunits were issued pursuant to Regulation S under the Securities Act of 1933, as amended. The warrants expire on November 9, 2013.Unitsshares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.Unitsshares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended.to one investorwith Mr. Malik Youyou of an aggregate of 42,857,142 units (“Units”) at a price of $0.07 per Unit,unit, for total gross proceeds of $3,000,000 (including a deposit received prior to September 30, 2012 of $300,000). Each Unitunit 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 theour Company on the principal market on which our common shares trade is equal to or exceeds $1.00 for thirty consecutive trading days, the warrant term will automatically accelerate to the date that is thirty calendar days following the date that written notice has been given to the warrantholder.warrant holder. No commission or finder’s fees were payable in connection with this private placement. The Unitsunits were issued pursuant to Regulation S under the Securities Act of 1933, as amended. The warrants expire on November 23, 2015.2012.2013.ITEM 6.SELECTED FINANCIAL DATA22ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS2012.U.S.United States dollars and are prepared based upon United Statesgenerally accepted accounting principles (“US GAAP”).is a new market that requires companies to be fully compliant in their filing requirements under the Securities Exchange Act of 1934.strategies,.strategies. For the year ended September 30, 2012,2013, and for the comparable period in the prior year, we generated no revenues from operations. Year Ended Year Ended September 10, 2003 to September 30, 2012 September 30, 2011 September 30, 2012 Revenue $ – $ – $ – Expenses General and Administrative $ 1,021,942 $ 1,536,211 $ 13,996,933 Depreciation and accretion 128,526 162,140 670,572 Net loss from operations (1,150,468 ) (1,698,351 ) (14,667,505 ) Other income and expenses Rental and other income 51,299 5,538 75,070 Interest income 4,183 4,011 214,266 Interest expense – – (208,580 ) Forgiveness of loan payable – – 287,406 Settlement of debt – – 24,866 Loss on disposal of assets (64 ) 348 (226 ) Net loss and comprehensive loss $ (1,095,050 ) $ (1,688,454 ) $ (14,274,703 ) Year Ended Year Ended September 10, 2003 to September 30, 2013 September 30, 2012 September 30, 2013 Revenue $ – $ – $ – Expenses General and administrative $ 854,358 $ 1,021,942 $ 14,851,291 Cost related to Farmout (Note 3) 1,790,684 – 1,790,684 Depreciation and accretion 112,192 128,526 782,764 Net loss from operations (2,757,234 ) (1,150,468 ) (17,424,739 ) Other income and expenses Rental and other income 272,339 51,299 347,409 Interest income 21,492 4,183 235,758 Interest expense – – (208,580 ) Forgiveness of loan payable – – 287,406 Settlement of debt – – 24,866 (Gain) Loss on disposal of assets – (64 ) (226 ) Net loss and comprehensive loss $ (2,463,403 ) $ (1,095,050 ) $ (16,738,106 ) 2012,2013, our general and administrative expenses decreased by $514,269$167,584 compared to the year ended September 30, 2012, which was a 16.4% decrease from the prior year which was primarily due to:to (i) a decrease of $185,617 of share-based compensationin engineering fees charged to expense,expense; (ii) a decrease in general office expenses which was primarily relatedincluded a decrease in office rental fees and accounting fees charged by third parties; and (iii) reversing and waiving amounts previously owed and accrued by our Company to vested stock options that were grantedPortwest Investments Ltd. (“Portwest”), a Company 100% owned by Dr. Horst A. Schmid for providing services to our directors,Company as President and (ii) a reversal of $124,089 previously written-offCEO, for further information see Notes 9 and 15 included in our notes to bad debt, which was related to money received from our joint venture co-owners that was written-off in a prior period. the financial statements enclosed herein.2011, our general and administrative expenses increased by $417,081 from the prior year, this increase was primarily due to, (i) $294,281 of share-based compensation2013, we charged to expense $1,790,684 for costs relating to a Farmout Agreement we entered into on July 31, 2013, 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. included a one-time agency fee of $1,500,000.2011,2013, our generaldepreciation and administrative expenses, excluding share-based compensationaccretion expense of $294,281, the write-offs of $170,044decreased by $16,334 compared to bad debt expense and $163,914 in operations charged to expense, was $907,972. 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 five-year life.For the year ended September 30, 2012, depreciation and accretion expense decreased by $33,614, 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, 2012.For the year ended September 30, 2012, rental and other income increased by $45,761 compared to the year ended September 30, 2011, which was primarily due to cash received for subleasing a portion of our office space and income earned from road use fees.As a result of the above transactions, our net loss and comprehensive loss from operations for the year ended September 30, 2012 decreased by $593,404 compared to the year ended September 30, 2011. As discussed above this decrease was primarily due to a reduction in share-based compensation charged to expenses and the reversal of write-offs to bad debt expense for money owed to us from our joint venture co-owners, which were subsequently collected.OperationsEffective November 23, 2012, we completed a private placement financing with one investor for aggregate gross cash proceeds of $3,000,000 (includes a deposit received prior to September 30, 2012 of $300,000).subsequently closed upon a purchasePurchase and saleSale agreement with 1132559 Alberta Ltd. (“113”), one of our former joint venture partners, pursuant to which we acquired 113’s 10% working interest in theirmost of the Sawn Lake heavy oil reservoirsands properties where we already own working interests, in exchange for cash and the discontinuance of claims. In compliance with our accounting policy, only half of the depreciation is taken in the Peace River areyear of Alberta.acquisition.transactionacquisition increased Deep Well’sour net acres in the Sawn Lake oil sands properties from 31,376 to 35,360 net acres (12,698 to 14,310 net hectares), before the Farmout Agreement dated July 31, 2013.increaseapplication to modify our previously approved in-situ demonstration project for a well to test thermal production on our Sawn Lake oil sands leases. This modification changed the vertical CSS well earlier approved, into a thermal recovery project to test 2 wells that use a horizontal application of 12.7%. Deep Well, through its subsidiaries, NorthernCSS. Our proposed thermal recovery project will be located on the north half of section 10-92-13W5, which has good road access on hard packed roads recently built by a third party. The proposed thermal recovery project location is approximately 1.4 kilometers away from the nearest hard packed road.Deep Well Alberta, currentlyin connection to the SAGD Project agreement dated July 30, 2013, we entered into a Water Rights Conveyance Agreement whereby we acquired a 25% working interest in one water source well and one water disposal well for a cost of $425,000 Cdn, which in turn was reimbursed to our Company by the Farmee. We also received a cash call in the amount of $1,058,568 Cdn for the expenditures relating to the water source well, water disposal well and pipelines to connect them to the SAGD Project surface facility. Our Farmee has since paid this cash call in the amount of $1,058,568 Cdn pursuant to the Farmout Agreement dated July 31, 2013.contiguous sections on sevensix oil sands leases and aan 80% working interest in 5 contiguous sections on one oil sands lease in the Peace River oil sands area of Alberta, where we are the operator. In addition, we have a 50%25% working interest, after the Farmout Agreement dated July 31, 2013, in another 12 contiguous sections on two oil sands leases in the Peace River oil sands area of Alberta, Canada.Currently we have in place joint operating agreements with one joint interest partner to manage our joint These nine oil sands leases which are all based on the 1990 Canadian Association of Petroleum Landmen (“CAPL”) Operating Procedure. Under these agreements our joint oil sands leases were evaluated seismically, geologicallycontiguous and by drilling to establish the continuity and the distribution of the crude bituminous-bearing Bluesky reservoir zone across our joint lands.During the year ended September 30, 2012 we evaluated the historically documented options for production methods available to us to determine the preferable course of action for our Sawn Lake project. After the 113 acquisition being able to drill and develop on lands now owned 90% by us, without having to carry a joint interest co-owner who had never paid its share of the costs incurred for the joint account, has economically opened new avenues for testing and further development of our Sawn Lake project. we have worked with three independent reservoir engineering and modeling companies to prepare analyses of the Sawn Lake Bluesky reservoir resulting in the reservoir modeling simulation studies to determine the optimum strategy for us to develop our reservoir. Following these reservoir models and the recommendation of our independent reservoir engineers, we intend to develop a thermal recovery project on our properties, followed by a commercial expansion project. To further this goal our environmental consultants have completed an environmental assessment as mandated by Alberta environmental regulations, in and around our proposed thermal recovery project located on our now 90% owned lands. We have also engaged drilling, completion and facilities engineers who have begun the planning and pre-drilling work for our HCSS pad site facility and designing our proposed horizontal well paths on the North half of section 10-92-13W5M.cover 43,015 gross acres (17,408 gross hectares). 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 do delay development of similar 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 affirm that our working interest can support full profitable commercial production.On February 3, 2012, we submitted an application to the ERCB to modify our previously approved in-situ pilot project for a well to test thermal production on our Sawn Lake oil sands leases. This modification seeks to change the vertical CSS well earlier approved, into a thermal recovery project to test 2 wells that use a horizontal application of CSS.On April 16, 2012, we received a reserves report as of December 31, 2011 from DeGolyer & MacNaughton Canada Limited (“DeGolyer”) an independent third party reservoir engineering firm. This report estimated the heavy oil reserves from the working interests held by our subsidiaries in the Peace River Oil Sands area of Alberta. DeGolyer estimated and assigned probable and possible reserves on the north half square mile of land located on section 10-92-13W5 designated for our horizontal CSS recovery project. This half square mile of land covers 316 gross acres (128 gross hectares) of land. DeGolyer has estimated that in that portion alone there are probable reserves of 7,806,000 barrels of heavy oil and probable plus possible reserves of 9,370,000 barrels attributable to our working interests before adjusting for any Provincial or potential royalties. These estimated probable plus possible reserves are classified as undeveloped at this time. Proved reserves cannot be assigned until production begins.Proved Reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and governmental regulations.Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves.Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil discovered.Our proposed thermal recovery project will be located on the north half of section 10-92-13W5 which has good road access on hard packed roads recently built by Penn West Petroleum Ltd. (“Penn West”). The proposed thermal recovery project location is approximately 1.4 kilometers away from the nearest Penn West road. We intend to upgrade our existing winter road to section 10-92-13W5 to an all-weather road. We also intend to acquire the remaining road and build it as an all-weather road up to the proposed thermal recovery project site.2012,2013, our total assets were $14,235,452$24,366,368 compared to $14,624,096$14,235,452 as of September 30, 2011. The primary decrease in our total assets was due to a decrease in cash and cash equivalents resulting from expenditures associated with our thermal recovery project and general office expenses. Our total liabilities as of September 30, 2012 were $906,674 compared to $608,932 as of September 30, 2011.2012. In comparison to the prior year, we had an increase of $297,742$10,130,916 in our total assets, which was primarily due to (i) an increase in cash and cash equivalents resulting from two private placements we completed for aggregate gross proceeds of $3,000,000 and $22,000,000 in exchange for shares of our Company’s common stock; and (ii) an increase in oil gas properties and equipment arising from a Purchase and Sale agreement we entered into with 113, whereby we acquired 113’s 10% working interest in the Sawn Lake leases.the result ofdue to (i) an increase of $205,639$195,561 in our accounts payable from non-related parties, which was primarily due to legal fees paid in connection with the Farmout Agreement we entered into on July 31, 2013; (ii) a note payable in the amount of $189,500 we received from one of our Director’s; and offset by (iii) a decrease of $390,133 in our accounts payable related parties due to payments and the reversal and waiving of past fees owed and accrued to corporations owned by directors for providing services as President, and CEO and Chief Financial Officer provided to our Company that we have not paid. September 30, 2012 September 30, 2011 Current Assets $ 446,674 $ 809,313 Current Liabilities 480,974 221,564 Working Capital $ (34,300 ) $ 587,749 September 30, 2013 September 30, 2012 Current Assets $ 7,770,925 $ 446,674 Current Liabilities 475,902 480,974 Working Capital $ 7,295,023 $ (34,300 ) 2012,2013, our Company had working capital of $7,295,023 compared to negative working capital of $34,300 compared to our working capital of $587,749 as of September 30, 2011.2012. Currently we have no long-term debt other than our estimated asset retirement obligations on oil and gas properties. Effective November 23, 2012, we completed a private placement financing with one investor for aggregate gross cash proceeds of $3,000,000 (includes a deposit received prior to September 30, 2012 of $300,000).2012,2013, we had a decreasean increase of $185,617 in share-based compensation from the prior$1,645,177 compared to September 30, 2012 year end, which was relatedprimarily due to (i) vested stock options that were grantedcosts charged to our directors, (ii) no further shares were issued under any incentive plan, and (iii) no further shares were issuedexpense relating to any contractor as compensation for services provided to our Company.a Farmout Agreement dated July 31, 2013. For the year ending September 30, 2011,2013, 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. For further information, see Notes 11 and 12 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. This write-off was in respect of money owed to us by two of our joint venture co-owners that had not paid us for operating expenses we incurred on our joint properties. During the year we pursued remedies to collect the money owed to us from one of our joint venture co-owners, which was previously written off as bad debt, and on October 18, 2012 we entered into a settlement agreement with one of our joint venture co-owners and received and reversed $123,525.90 Cdn of the amounts previously written off. In addition and effective December 3, 2012, the aforementioned acquisition of 113’s 10% working interest will result in an additional reversal of prior period bad debt write-offs. However, since this acquisition agreement occurred well past our year end the reversal of this previous bad debt was not posted in our September 30, 2012 year end; however, we will post it in our subsequent year.Also, as reported on our Consolidated Statement of Cash Flows under “Operating Activities”, for the year ended September 30, 2012, our depreciation and accretion expense decreased by $33,614 from the prior year ended September 30, 2011, 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, 2012 and no significant change incurred for accretion expense. For the year ending September 30, 2012 we had an increase of $22,954$272,479 in net changes in non-cash working capital from the prior year ended September 30, 2011,2012, which was primarily due to an increasea decrease in accounts payable due to a reversal and waiving of fees payable to corporationsa corporation owned by directorsa director for providing services as President and CEO and Chief Financial Officer to our Company that we havewere not paid.This was offset by a reversal ofpaid, see Note 9 and Note 15 in the prior year’s bad debt right-off.a declinean increase of $398,963$2,552,865 in our investment in oil and gas properties for the year ended September 30, 20122013 from the comparable year ended September 30, 2011,2012, which was primarily due to a declineresult of (i) the December 3, 2012 Purchase and Sale agreement disclosed herein, whereby we acquired an additional 10% working interest in our field operations and engineering fees fromjoint properties along with a 10% working interest increase in the prior year. .Also, as reported on our Consolidated Statement of Cash Flows under “Investing Activities”,equipment purchased for the year ended September 30, 2012, we reported an increase of $16,591wells drilled within those joint properties, in long term investments fromexchange for the prior year ended September 30, 2011, which was due tocash among other items as previously disclosed above; and (ii) an increase in interest received, unrealized foreign exchange gain and an adjustment to increase our portion of the bondsCompany’s security deposits held in trust bywith the ERCBAER for theour asset retirement obligations for future abandonment and reclamation of our wells.2012,2013, we recorded to equityhad an increase of $300,000 based on deposits to stock subscriptions relating to the$12,066,435 in net cash provided in financing activities, which was a result of (i) a private placement referred to herein which subsequently closed. Effectivewe entered into on November 23, 2012 pursuant to a subscription agreement, our Company completed a private placement towith one investor of an aggregate of 42,857,142 units (“Units”) at a price of $0.07 per Unit, for total gross proceeds of $3,000,000 (including a deposit received prior to September 30, 2012 of $300,000). Each Unit is comprised in exchange for shares of our Company’s common stock; (ii) a private placement we entered into on July 31, 2013 with one (1)investor for gross proceeds of $22,000,000 in exchange for shares of our Company’s common stock; and (iii) a loan for $260,000 as a note payable from one of our directors. And on August 9, 2013, our Company approved a distribution to our shareholders in the amount of $0.07 per share to be payable on September 20, 2013 (the “Payment Date”) to the holders of record of all the issued and one (1)outstanding shares of common share purchase warrant. Each warrant entitles the holder to purchase one (1) common share at a pricestock of $0.105 for a period of three years from the date of closing, provided that if the closing priceour Company as of the common sharesclose of business on August 16, 2013, (the “Record Date”). This cash distribution to our shareholders was not a dividend paid out of the Company onearnings and profits, but was a non-dividend distribution characterized as a “return of capital”. On September 20, 2013, a total of $12,895,065 was paid to our transfer agent for the principal market on whichreturn of capital distribution to our common shares trade is equalshareholders and related service fees payable to or exceeds $1.00 for thirty consecutive trading days, the warrant term will automatically accelerate to the date that is thirty calendar days following the date that written notice has been given to the warrant holder. 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, as amended. The warrants issued pursuant to this latest private placement expire on November 23, 2015.20122013 were $244,191$7,633,009 compared to $723,766$244,191 for the prior year ended September 30, 2011, which2012, this increase in cash and cash equivalents was primarily due to a decreasetwo private placements we entered into on November 23, 2012 and July 31, 2013, in cash resulting from costs associated with our thermal recovery projectthe amount of $3,000,000 and general office expenses.$22,000,000, respectively. Since March 10, 2005 to December 15, 2012,September 30, 2013, we have financed our business operations through a loan, fees derived from the farmouttwo farmouts of some of our lands and 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 $24.6$46.6 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 have an aggregate of 72,142,85572,424,759 warrants outstanding as of December 15, 2012,September 30, 2013, with exercise prices ofranging from $0.075 and $0.105. These warrants’ expiration dates range from November 9, 201323, 2015 to November 23, 2015.June 20, 2016. If all of these warrants are exercised we may realize aggregate proceeds of approximately $7.6 million. However, the warrant holders have complete discretion as to when and if the warrants are exercised before they expire and we cannot guarantee that the warrant holders will exercise any of the warrants.· 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;operations, including the building of all-weather roads;· our drilling and testing plans; · our proposed enhanced oil recovery test well project; · the sufficiency of our capital in order to execute our business plan; · resource estimates; · the timing and sources of our future funding.funding;· the intent to issue a distribution to our shareholders. · 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 ERCBAER for additional tests to further evaluate the wells on our lands;· our farmout agreement and joint operating agreements; · 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. ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA&and Gas, Inc.sheetsheets of Deep Well Oil &and Gas, Inc. (“the Company”) as of September 30, 2013 and 2012, and the related consolidated statementstatements of operations and comprehensive loss, shareholders’ equity and cash flows for the yearyears then ended.ended and for the cumulative period from September 10, 2003 (inception) through September 30, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. The consolidated financial statements of Deep Well Oil & Gas, Inc. as of September 30, 2011, were audited by other auditors whose report dated December 28, 2011 expressed an unqualified opinion on those statements.
We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditaudits 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 auditaudits 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 audit providesaudits provide a reasonable basis for our opinion.&and Gas, Inc., as of September 30, 2013 and 2012, and the results of itstheir operations and itstheir cash flows for the yearyears then ended in conformity with U.S. generally accepted accounting principles.The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the exploration stage, has not earned significant revenue, has suffered net losses and has had negative cash flows from operating activities during the year ended September 30, 2012 and for the cumulative period from September 10, 2003 (date of inception)(inception) through September 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans2013, in regard to these matters are also described in Note 1. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.Farmington,11, 2013Office 801-528-9222Fax 801-528-9223291 South 200 West, Farmington, Utah 8402520122013 and September 30, 2011 September 30,
2012 September 30,
2011 ASSETS Current Assets Cash and cash equivalents $ 244,191 $ 723,766 Accounts receivable net of allowance of $243,752 (2011 - $350,298) 156,251 34,727 Accounts receivable – related party (Note 9) – 2,522 Prepaid expenses 46,232 48,298 Total Current Assets 446,674 809,313 Long term investments (Note 8) 275,600 247,937 Oil and gas properties (Note 3) 13,190,518 13,140,951 Property and equipment net of depreciation (Note 7) 322,660 425,895 TOTAL ASSETS $ 14,235,452 $ 14,624,096 LIABILITIES Current Liabilities Accounts payable $ 72,697 $ 18,926 Accounts payable – related parties (Note 9) 408,277 202,638 Total Current Liabilities 480,974 221,564 Asset retirement obligations (Note 10) 425,700 387,368 TOTAL LIABILITIES 906,674 608,932 SHAREHOLDERS’ EQUITY Common stock: (Note 11) Authorized: 300,000,000 shares at $0.001 par value Issued and outstanding: 136,739,971 shares (September 30, 2011 – 136,739,971 shares) (Note 11) 136,739 136,739 Additional paid in capital 27,166,742 27,058,078 Deposits on stock subscription (Note 11) 300,000 – Deficit accumulated during exploration stage (14,274,703 ) (13,179,653 ) Total Shareholders’ Equity 13,328,778 14,015,164 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 14,235,452 $ 14,624,096 September 30, September 30, 2013 2012 ASSETS Current Assets Cash and cash equivalents $ 7,633,009 $ 244,191 Accounts receivable net of allowance of $17,048 (September 30, 2012 - $243,752) 55,216 156,251 Prepaid expenses 82,700 46,232 Total Current Assets 7,770,925 446,674 343,565 275,600 15,921,770 13,190,518 330,108 322,660 TOTAL ASSETS $ 24,366,368 $ 14,235,452 LIABILITIES Current Liabilities Accounts payable $ 268,258 $ 72,697 Accounts payable – related parties (Note 9) 18,144 408,277 Loan payable – related parties (Note 9) 189,500 – Total Current Liabilities 475,902 480,974 446,155 425,700 TOTAL LIABILITIES 922,057 906,674 SHAREHOLDERS’ EQUITY Authorized: 600,000,000 shares at $0.001 par value Issued and outstanding: 229,326,987 shares (September 30, 2012 – 136,739,971 shares) 229,326 136,739 Additional paid in capital 39,953,091 27,166,742 – 300,000 Deficit accumulated during exploration stage (16,738,106 ) (14,274,703 ) Total Shareholders’ Equity 23,444,311 13,328,778 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 24,366,368 $ 14,235,452 3020122013 and 20112012 and the Period from September 10, 2003 (Inception of Exploration Stage) to September 30, 2012 2012 2011 September 10, 2003 to
September 30, 2012 Revenue $ – $ – $ – Expenses General and Administrative 1,021,942 1,536,211 13,996,933 Depreciation and accretion 128,526 162,140 670,572 Net loss from operations (1,150,468 ) (1,698,351 ) (14,667,505 ) Other income and expenses Rental and other income 51,299 5,538 75,070 Interest income 4,183 4,011 214,266 Interest expense – – (208,580 ) Forgiveness of loan payable – – 287,406 Settlement of debt – – 24,866 (Gain) loss on disposal of assets (64 ) 348 (226 ) Net loss and comprehensive loss $ (1,095,050 ) $ (1,688,454 ) $ (14,274,703 ) Net loss per common share Basic and Diluted $ (0.01 ) $ (0.01 ) Weighted Average Outstanding Shares (in thousands) Basic and Diluted 136,740 136,412 2013 2012 Revenue $ – $ – $ – Expenses General and administrative 854,358 1,021,942 14,851,291 Cost related to Farmout (Note 3) 1,790,684 – 1,790,684 Depreciation and accretion 112,192 128,526 782,764 Net loss from operations (2,757,234 ) (1,150,468 ) (17,424,739 ) Other income and expenses Rental and other income 272,339 51,299 347,409 Interest income 21,492 4,183 235,758 Interest expense – – (208,580 ) Forgiveness of loan payable – – 287,406 Settlement of debt – – 24,866 (Gain) loss on disposal of assets – (64 ) (226 ) Net loss and comprehensive loss $ (2,463,403 ) $ (1,095,050 ) $ (16,738,106 ) Net loss per common share Basic and Diluted $ (0.01 ) $ (0.01 ) Basic and Diluted 181,661 136,740 312012 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total 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 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 ) – 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 ) 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 - Warrants (787,500) – – 205,185 – – 205,185 Share exchange June 7, 2005 - Shares 18,208,875 18,209 2,476,497 – – 2,494,706 - 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 - Warrants (710,946) – – 132,030 – – 132,030 Common stock subscription received – – – 250,000 – 250,000 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 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total 991,918 $ 992 $ (992 ) $ – $ – $ – 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 ) Balance at September 30, 2003 37,011,474 37,011 12,989 – (50,000 ) – 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 ) 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 - Warrants (787,500) – – 205,185 – – 205,185 Share exchange June 7, 2005 - Shares 18,208,875 18,209 2,476,497 – – 2,494,706 - 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 - Warrants (710,946) – – 132,030 – – 132,030 Common stock subscription received – – – 250,000 – 250,000 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 2012 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Balance carried forward at September 30, 2005 52,031,295 52,031 3,512,054 2,027,639 (1,838,303 ) 3,753,421 Issuance of common stock Private placement October 11, 2005 - Shares 3,150,000 3,150 667,266 (250,000 ) – 420,416 - Warrants (3,150,000) – – 553,584 – – 553,584 Private placement January 13, 2006 - Shares 73,000 73 55,345 – – 55,418 - Warrants (73,000) – – 46,402 – – 46,402 Exercise option agreement February 23, 2006 - Shares 4,707,750 4,708 640,277 (644,985 ) – – Exercise option agreement June 13, 2006 - Shares 2,867,250 2,867 389,960 (392,827 ) – – Warrants exercised July 28, 2006 100,000 100 59,900 – – 60,000 Warrants exercised September 11, 2006 50,000 50 29,950 – – 30,000 Options granted for services – – 558,882 – – 558,882 Net operating loss for the year ended September 30, 2006 – – – – (1,922,282 ) (1,922,282 ) Balance at September 30, 2006 62,979,295 62,979 6,513,620 739,827 (3,760,585 ) 3,555,841 Issuance of common stock Settlement Agreement January 22, 2007 - Shares 1,600,000 1,600 433,950 – – 435,550 Exercise option agreement April 4, 2007 - Shares 5,400,000 5,400 734,427 (739,827 ) – – Private placement May 25, 2007 - Shares 5,000,000 5,000 1,086,348 – – 1,091,348 - Warrants (5,000,000) – – 758,652 – – 758,652 Private placement June 22, 2007 - Shares 8,333,333 8,333 2,731,300 – – 2,739,633 - Warrants (8,333,333) – – 1,676,492 – – 1,676,492 - Special warrants (1,000,000) – – 283,875 – – 283,875 Private placement July 11, 2007 - Shares 323,333 323 106,559 – – 106,882 - Warrants (323,333) – – 66,397 – – 66,397 - Special warrants (38,800) – – 11,021 – – 11,021 Subtotal carried forward 83,635,961 83,635 14,402,641 – (3,760,585 ) 10,725,691 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Balance carried forward at September 30, 2005 52,031,295 52,031 3,512,054 2,027,639 (1,838,303 ) 3,753,421 Issuance of common stock Private placement October 11, 2005 - Shares 3,150,000 3,150 667,266 (250,000 ) – 420,416 - Warrants (3,150,000) – – 553,584 – – 553,584 Private placement January 13, 2006 - Shares 73,000 73 55,345 – – 55,418 - Warrants (73,000) – – 46,402 – – 46,402 Exercise option agreement February 23, 2006 - Shares 4,707,750 4,708 640,277 (644,985 ) – – Exercise option agreement June 13, 2006 - Shares 2,867,250 2,867 389,960 (392,827 ) – – Warrants exercised July 28, 2006 100,000 100 59,900 – – 60,000 Warrants exercised September 11, 2006 50,000 50 29,950 – – 30,000 Options granted for services – – 558,882 – – 558,882 Net operating loss for the year ended September 30, 2006 – – – – (1,922,282 ) (1,922,282 ) Balance at September 30, 2006 62,979,295 62,979 6,513,620 739,827 (3,760,585 ) 3,555,841 Issuance of common stock Settlement Agreement January 22, 2007 - Shares 1,600,000 1,600 433,950 – – 435,550 Exercise option agreement April 4, 2007 - Shares 5,400,000 5,400 734,427 (739,827 ) – – Private placement May 25, 2007 - Shares 5,000,000 5,000 1,086,348 – – 1,091,348 - Warrants (5,000,000) – – 758,652 – – 758,652 Private placement June 22, 2007 - Shares 8,333,333 8,333 2,731,300 – – 2,739,633 - Warrants (8,333,333) – – 1,676,492 – – 1,676,492 - Special warrants (1,000,000) – – 283,875 – – 283,875 Private placement July 11, 2007 - Shares 323,333 323 106,559 – – 106,882 - Warrants (323,333) – – 66,397 – – 66,397 - Special warrants (38,800) – – 11,021 – – 11,021 Subtotal carried forward 83,635,961 83,635 14,402,641 – (3,760,585 ) 10,725,691 2012 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Subtotal carried forward from previous page 83,635,961 83,635 14,402,641 – (3,760,585 ) 10,725,691 Warrant exchange September 4, 2007 - Share value transferred from warrants – – 11,467 – – 11,467 - Warrants cancelled (500,000) – – (130,276 ) – – (130,276 ) - Warrants issued (625,000) – – 118,809 – – 118,809 Warrant exchange September 10, 2007 - Share value transferred from warrants – – 7,237 – – 7,237 - Warrants cancelled (287,500) – – (74,909 ) – – (74,909 ) - Warrants issued (359,375) – – 67,672 – – 67,672 Options granted for services – – 246,643 – – 246,643 Net operating loss for the year ended September 30, 2007 – – – – (1,435,664 ) (1,435,664 ) Balance at September 30, 2007 83,635,961 83,635 14,649,284 – (5,196,249 ) 9,536,670 Issuance of common stock August 12, 2008 - Warrants expired (560,946) – – – – – – Private Placement August 14, 2008 - Shares 10,638,297 10,638 3,099,429 – – 3,110,067 - Warrants (10,638,297) – – 1,619,827 – – 1,619,827 - Special warrants (2,000,000) – – 270,106 – – 270,106 Options granted for services – – 111,815 – – 111,815 Net operating loss for the year ended September 30, 2008 – – – – (2,796,055 ) (2,796,055 ) Balance at September 30, 2008 94,274,258 94,273 19,750,461 – (7,992,304 ) 11,852,430 Issuance of common stock October 11, 2008 - Warrants expired (3,150,000) – – �� – – – – Private Placement October 31, 2008 - Shares 12,500,000 12,500 3,247,870 – – 3,260,370 - Warrants (12,500,000) – – 1,559,307 – – 1,559,307 - Special warrants (2,000,000) – – 180,323 – – 180,323 January 13, 2009 - Warrants expired (73,000) – – – – – – Options granted for services – – 5,802 – – 5,802 Net operating loss for the year ended September 30, 2009 – – – – (2,167,343 ) (2,167,343 ) Balance at September 30, 2009 106,774,258 106,773 24,743,763 – (10,159,647 ) 14,690,889 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Subtotal carried forward from previous page 83,635,961 83,635 14,402,641 – (3,760,585 ) 10,725,691 Warrant exchange September 4, 2007 - Share value transferred from warrants – – 11,467 – – 11,467 - Warrants cancelled (500,000) – – (130,276 ) – – (130,276 ) - Warrants issued (625,000) – – 118,809 – – 118,809 Warrant exchange September 10, 2007 - Share value transferred from warrants – – 7,237 – – 7,237 - Warrants cancelled (287,500) – – (74,909 ) – – (74,909 ) - Warrants issued (359,375) – – 67,672 – – 67,672 Options granted for services – – 246,643 – – 246,643 Net operating loss for the year ended September 30, 2007 – – – – (1,435,664 ) (1,435,664 ) Balance at September 30, 2007 83,635,961 83,635 14,649,284 – (5,196,249 ) 9,536,670 Issuance of common stock August 12, 2008 - Warrants expired (560,946) – – – – – – Private Placement August 14, 2008 - Shares 10,638,297 10,638 3,099,429 – – 3,110,067 - Warrants (10,638,297) – – 1,619,827 – – 1,619,827 - Special warrants (2,000,000) – – 270,106 – – 270,106 Options granted for services – – 111,815 – – 111,815 Net operating loss for the year ended September 30, 2008 – – – – (2,796,055 ) (2,796,055 ) Balance at September 30, 2008 94,274,258 94,273 19,750,461 – (7,992,304 ) 11,852,430 Issuance of common stock October 11, 2008 - Warrants expired (3,150,000) – – – – – – Private Placement October 31, 2008 - Shares 12,500,000 12,500 3,247,870 – – 3,260,370 - Warrants (12,500,000) – – 1,559,307 – – 1,559,307 - Special warrants (2,000,000) – – 180,323 – – 180,323 January 13, 2009 - Warrants expired (73,000) – – – – – – Options granted for services – – 5,802 – – 5,802 Net operating loss for the year ended September 30, 2009 – – – – (2,167,343 ) (2,167,343 ) Balance at September 30, 2009 106,774,258 106,773 24,743,763 – (10,159,647 ) 14,690,889 342012 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Balance carried forward at September 30, 2009 106,774,258 106,773 24,743,763 – (10,159,647 ) 14,690,889 March 9, 2010 - Warrants expired (984,375) – – – – – – May 25, 2010 - Warrants expired (5,000,000) – – – – – – June 22, 2010 - Warrants expired (8,333,333) – – – – – – July 11, 2010 - Warrants expired (323,333) – – – – – – Net operating loss for the year ended September 30, 2010 – – – – (1,331,552 ) (1,331,552 ) Balance at September 30, 2010 106,774,258 106,773 24,743,763 – (11,491,199 ) 13,359,337 Issuance of common stock Private Placement November 9, 2010 - Shares 29,285,713 29,286 1,257,181 – – 1,286,467 - Warrants (29,285,713) (Note 11) – – 763,533 – – 763,533 March 23, 2011 - Shares issued to a director (Note 11) 500,000 500 69,500 – – 70,000 - Shares issued for services (Note 11) 180,000 180 25,020 – – 25,200 August 14, 2011 - Warrants expired (2,000,000) (Note 11) – – – – – – - Warrants expired (10,638,297) (Note 11) – – – – – – Options granted for services – – 199,081 – – 199,081 Net operating loss for the year ended September 30, 2011 – – – – (1,688,454 ) (1,688,454 ) Balance at September 30, 2011 136,739,971 136,739 27,058,078 – (13,179,653 ) 14,015,164 October 31, 2011 -Warrants expired (14,500,000) (Note 11) – – – – – – June 22, 2012 -Warrants expired (1,000,000) (Note 11) – – – – – – July 11, 2012 -Warrants expired (38,800) (Note 11) – – – – – – Options granted for service – – 108,664 – – 108,664 Net operating loss for the year ended September 30, 2012 – – – – (1,095,050 ) (1,095,050 ) Balance at September 30, 2012 136,739,971 $ 136,739 $ 27,166,742 $ – $ (14,274,703 ) $ 13,028,778 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Balance carried forward at September 30, 2009 106,774,258 106,773 24,743,763 – (10,159,647 ) 14,690,889 March 9, 2010 - Warrants expired (984,375) – – – – – – May 25, 2010 - Warrants expired (5,000,000) – – – – – – June 22, 2010 - Warrants expired (8,333,333) – – – – – – July 11, 2010 - Warrants expired (323,333) – – – – – – Net operating loss for the year ended September 30, 2010 – – – – (1,331,552 ) (1,331,552 ) Balance at September 30, 2010 106,774,258 106,773 24,743,763 – (11,491,199 ) 13,359,337 Issuance of common stock Private Placement November 9, 2010 - Shares 29,285,713 29,286 1,257,181 – – 1,286,467 - Warrants (29,285,713) – – 763,533 – – 763,533 March 23, 2011 - Shares issued to a director 500,000 500 69,500 – – 70,000 180,000 180 25,020 – – 25,200 August 14, 2011 - Warrants expired (2,000,000) – – – – – – - Warrants expired (10,638,297) – – – – – – Options granted for services – – 199,081 – – 199,081 Net operating loss for the year ended September 30, 2011 – – – – (1,688,454 ) (1,688,454 ) Balance at September 30, 2011 136,739,971 136,739 27,058,078 – (13,179,653 ) 14,015,164 October 31, 2011 – – – – – – June 22, 2012 – – – – – – July 11, 2012 – – – – – – Options granted for service – – 108,664 – – 108,664 Net operating loss for the year ended September 30, 2012 – – – – (1,095,050 ) (1,095,050 ) Balance at September 30, 2012 136,739,971 $ 136,739 $ 27,166,742 $ – $ (14,274,703 ) $ 13,028,778 Capital Additional Stock Common Shares Paid in Subscriptions Accumulated Shares Amount Capital Received Deficit Total Balance carried forward At September 30, 2012 136,739,971 $ 136,739 $ 27,166,742 – $ (14,274,703 ) $ 13,028,778 Private Placement November 23, 2012 42,857,142 42,858 2,957,142 – – 3,000,000 Private Placement June 20, 2013 850,000 850 26,598 – – 27,448 – – 15,052 – – 15,052 – – 234,402 – – 234,402 Private Placement July 31, 2013 45,111,778 45,111 21,954,889 – – 22,000,000 Stock options 2,000,000 2,000 179,000 – – 181,000 Warrants 330,000 330 24,670 – – 25,000 Stock options 600,000 600 69,900 – – 70,500 Warrants 238,096 238 24,762 – – 25,000 Stock options 600,000 600 69,900 – – 70,500 Return of Capital Distribution – – (12,895,065 ) – – (12,895,065 ) Options granted for services – – 125,099 – – 125,099 Net operating loss for the year ended September 30, 2013 – – – – (2,463,403 ) (2,463,403 ) Balance at September 30, 2013 229,326,987 $ 229,326 $ 39,953,091 $ – $ (16,738,106 ) $ 23,444,311 20122013 and 20112012 and the Period from September 10, 20032012 2012 2011 September
10, 2003 to
September
30, 2012 CASH PROVIDED BY (USED IN): Operating Activities Net loss $ (1,095,050 ) $ (1,688,454 ) $ (14,274,703 ) Items not affecting cash: Share based compensation 108,664 294,281 1,326,087 Bad debts (10,608 ) 170,044 511,632 Depreciation and accretion 128,526 162,140 670,572 Forgiveness of loan payable – – (287,406 ) Settlement of lawsuit – – 435,549 Commissions withheld from loans proceeds – – 121,000 (Gain) loss on disposal of assets 64 (348 ) 226 Net changes in non-cash working capital (Note 13) 142,474 119,520 (247,176 ) Net Cash (Used) in Operating Activities (725,930 ) (942,817 ) (11,744,219 ) Investing Activities Purchase of property and equipment (860 ) (3,254 ) (904,469 ) Investment in oil and gas properties (35,731 ) (434,694 ) (8,611,105 ) Long term investments (17,055 ) (464 ) (264,992 ) Cash from acquisition of subsidiary – – 11,141 Return of costs from farmout agreement – – 961,426 Net Cash (Used) in Investing Activities (53,645 ) (438,412 ) (8,807,999 ) Financing Activities Loan payable – – 275,852 Loan advance – related parties – – (811,746 ) Note payable repayment – – (111,306 ) Debenture repayment – – (1,004,890 ) Deposit on stock subscription 300,000 (48,555 ) 300,000 Proceeds from issuance of common stock – 2,050,000 21,269,499 Proceeds from debenture net of commissions – – 879,000 �� Net Cash Provided by Financing Activities 300,000 2,001,445 20,796,409 Increase (decrease) in cash and cash equivalents (479,575 ) 620,216 244,191 Cash and cash equivalents, beginning of year 723,766 103,550 – Cash and cash equivalents, end of year $ 244,191 $ 723,766 $ 244,191 Supplemental Cash Flow Information: Cash paid for interest $ – $ – 202,159 2013 2012 CASH PROVIDED BY (USED IN): Operating Activities Net loss $ (2,463,403 ) $ (1,095,050 ) $ (16,738,106 ) Items not affecting cash: Share based compensation 125,099 108,664 1,451,186 Bad debts (261,666 ) (10,608 ) 249,966 Depreciation and accretion 112,192 128,526 782,764 Forgiveness of loan payable and accounts payable 234,402 – (53,004 ) Settlement of lawsuit 12,274 – 447,823 Commissions withheld from loans proceeds – – 121,000 (Gain) loss on disposal of assets – 64 226 Net changes in non-cash working capital (Note 13) (130,005 ) 142,474 (377,181 ) Net Cash (Used) in Operating Activities (2,371,107 ) (725,930 ) (14,115,326 ) Investing Activities Purchase of property and equipment – (860 ) (904,469 ) Investment in oil and gas properties (2,566,139 ) (35,731 ) (11,177,244 ) Long term investments (40,371 ) (17,055 ) (305,363 ) Cash from acquisition of subsidiary – – 11,141 Return of costs from farmout agreement – – 961,426 Net Cash (Used) in Investing Activities (2,606,510 ) (53,645 ) (11,414,509 ) Financing Activities Loan payable – – 275,852 Loan advance – related parties 260,000 – (551,746 ) Note payable repayment – – (111,306 ) Debenture repayment – – (1,004,890 ) Deposit on stock subscription – 300,000 300,000 Proceeds from issuance of common stock 25,001,500 – 46,270,999 Proceeds from debenture net of commissions – – 879,000 Return of Capital Distribution (12,895,065 ) – (12,895,065 ) Net Cash Provided by Financing Activities 12,366,435 300,000 33,162,844 Increase (decrease) in cash and cash equivalents 7,388,818 (479,575 ) 7,633,009 Cash and cash equivalents, beginning of year 244,191 723,766 – Cash and cash equivalents, end of year $ 7,633,009 $ 244,191 $ 7,633,009 Supplemental Cash Flow Information: Cash paid for interest $ – $ – 202,159 3620122013 and 20111.NATURE OF BUSINESS AND BASIS OF PRESENTATIONAmerican Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (SOP 90-7).Accounting Standards Board (“FASB) Accounting Standards Codification (“ASC”) 852-10. In connection with the adoption of fresh-start reporting, a new entity was deemed created for financial reporting purposes. For financial reporting purposes, and Deep Well adopted the provisions of fresh-start reporting effective September 10, 2003. In adopting the requirements of fresh-start reporting as of September 10, 2003,As a result, the company was required to value its assets and liabilities at fair value and eliminate any accumulated deficit as of September 10, 2003. Deep Well emerged from Chapter 11 proceedings with no assets and liabilities pursuant to the Bankruptcy Order. After the Bankruptcy Order and restructuring was completed, Deep Well entered into the oil and gas exploration business and acquired properties in the Peace River oil sands area, located in the province of Alberta, Canada. Because the current business, heavy oil and gas exploration, has no relevance to the predecessor company, there is no basis for financial comparisons between Deep Well’s current operations and the predecessor company.Going ConcernThe Company’s consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of September 30, 2012, the Company has a working capital deficit, has an accumulated deficit, and has generated negative cash flows from operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of dependent upon the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's operations. The management of the Company has developed a strategy, which it believes will accomplish this objective through short-term related party loans and additional equity funding, which will enable the Company to operate for the coming year.The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESSoftware - 100% Computer equipment - 55% Portable work camp - 30% Vehicles - 30% Road Mats - 30% Wellhead - 25% Office furniture and equipment - 20% Oilfield Equipment - 20% Tanks - 10% ourthe Company’s long-lived assets were identified or recorded in the fiscal years ended September 30, 20122013 and 2011.20122013 and 2011,2012, asset retirement obligations amount to $425,700$446,155 and $387,368,$425,700, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the costs of abandonment and reclamation to be.Fair Values accounts receivable – related parties, long term investments, investment in equity securities, accounts payable and accounts payable – related parties. The fair value of these financial instruments approximates their carrying valuesvalue because of the short-term maturity of these items unless otherwise noted. The fair value of the investment in equity securities cannot be determined as the market value is not readily obtainable. The equity securities are reported using the cost method.In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.” ASU 2011-05 amends ASC 220 to now require: (1) an entity should present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income,a total amount for comprehensive income; and (2) the entity should present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented; and (3) the tax effect for each component must be disclosed in the notes to the financial statements or presented in the statement in which other comprehensive income is presented. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Earlytheir adoption is permitted. The amendments do not require any transition disclosures. The adoption of these accounting standards has not had or is not expected to have a significant effectmaterial impact on the Company’s financial statement presentation.In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 changed the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are effective for annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption of these accounting standards has not had a significant effect on the financial statement presentation.3.OIL AND GAS PROPERTIES2012, Northern’s2013, the Company’s net payments due in Canadian dollars under this commitment are as follows: 2013 $ 45,158 2014 $ 45,158 2015 $ 45,158 2016 $ 45,158 2017 $ 45,158 Subsequent $ 88,883.20 2014 $ 47,398 2015 $ 47,398 2016 $ 47,398 2017 $ 47,398 Subsequent $ 46,502 a.) drill 68 wells throughout the 68 sections; or b.) drill 44 wells within the 68 sections and having acquired and processed 2 miles of seismic on each other undrilled section. 20122013 and 2011,2012, the Company has an interest in ten wells, which can be counted towards these requirements.20122013 (September 30, 20112012 - $nil).1.) 4.CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES$2,412,960 (Cdn $2,400,000);2.) The discontinuance, without costs, of the Court of Queen’s Bench, Judicial District of Edmonton, Action No. 0803-0869 and Action No. 1003-14659 filed by the Company against 113; and 3.) Forgiving the amounts owed from 113 to the Company in the amount of $239,459 (Cdn $239,268) and any defaults and penalties that the Company had imposed upon 113. 2012,2013, the Company’s management determined that sufficient progress has been made in assessing its oil sands reserves for continued capitalization of exploratory well costs. In relation to this sufficient progress assessment of its oil sands project the Company considered among other criteria; long lead times in getting regulatory approval for oil sands thermal recovery projects, road bans, winter access only properties and governmental and environmental regulations which can and often delay development of oil sands projects. Because of these and other factors, the Company’s oil sands project can take significantly longer to complete than regular conventional drilling programs for lighter oil. To date the Company’s geological, engineering, and economic studies and recently AER approved thermal recovery projects continue to lead them to believe that there is continuing progress toward bringing the project to commercial production. Therefore, the Company has continued to capitalize its costs associated with its oil sands project.ourthe Company’s long-lived assets were identified or recorded in the fiscal years ended September 30, 20122013 and 2011.20122013 and September 30, 2011: 2012 2011 Unproved Oil and Gas Properties $ 13,222,551 $ 13,165,546 Proved Oil and Gas Properties – – Accumulated Depreciation (32,033 ) (24,595 ) Net Capitalized Cost $ 13,190,518 $ 13,140,951 5.EXPLORATION ACTIVITIES 2013 2012 Unproved Oil and Gas Properties $ 15,963,517 $ 13,222,551 Proved Oil and Gas Properties – – Accumulated Depreciation (41,747 ) (32,033 ) Net Capitalized Cost $ 15,921,770 $ 13,190,518 20122013 and September 30, 2011: 2012 2011 Acquisition of Properties: Proved $ – $ – Unproved 57,005 422,362 Exploration costs 119,353 163,914 Development costs – – 6.INVESTMENT IN EQUITY SECURITIES 2013 2012 Acquisition of Properties: Proved $ – $ – Unproved 2,740,967 57,005 Exploration costs 55,810 119,353 Development costs – – 7.PROPERTY AND EQUIPMENT September 30, 2012 Accumulated Net Book Cost Depreciation Value Computer equipment $ 31,084 $ 29,312 $ 1,772 Office furniture and equipment 33,199 21,152 12,046 Software 5,826 5,826 – Leasehold improvements 4,936 3,934 1,002 Portable work camp 170,580 120,847 49,733 Vehicles 38,077 26,976 11,101 Oilfield equipment 154,713 82,689 72,024 Road mats 364,614 258,311 106,303 Wellhead 3,254 1,119 2,135 Tanks 96,085 29,541 66,544 $ 902,368 $ 579,707 $ 322,660 September 30, 2011 Accumulated Net Book Cost Depreciation Value Computer equipment $ 30,655 $ 28,060 $ 2,595 Office furniture and equipment 33,199 18,141 15,058 Software 5,826 5,826 – Leasehold improvements 4,936 2,277 2,659 Portable work camp 170,580 99,533 71,047 Vehicles 38,077 22,218 15,859 Oilfield equipment 154,713 64,682 90,031 Road mats 364,614 212,752 151,862 Wellhead 3,254 407 2,847 Tanks 96,085 22,148 73,937 $ 901,939 $ 476,044 $ 425,895 September 30, 2013 Accumulated Net Book Cost Depreciation Value Computer equipment $ 31,084 $ 30,576 $ 508 Office furniture and equipment 33,199 24,938 8,261 Software 5,826 5,826 – Leasehold improvements 4,936 4,602 334 Portable work camp 170,580 135,767 34,813 Vehicles 38,077 30,306 7,771 Oilfield equipment 249,045 106,527 142,518 Road mats 364,614 290,202 74,412 Wellhead 3,254 1,653 1,601 Tanks 96,085 36,196 59,889 $ 996,700 $ 666,593 $ 330,107 September 30, 2012 Accumulated Net Book Cost Depreciation Value Computer equipment $ 31,084 $ 29,312 $ 1,772 Office furniture and equipment 33,199 21,152 12,046 Software 5,826 5,826 – Leasehold improvements 4,936 3,934 1,002 Portable work camp 170,580 120,847 49,733 Vehicles 38,077 26,976 11,101 Oilfield equipment 154,713 82,689 72,024 Road mats 364,614 258,311 106,303 Wellhead 3,254 1,119 2,135 Tanks 96,085 29,541 66,544 $ 902,368 $ 579,707 $ 322,660 $104,033$86,884 of depreciation expense for the year ended September 30, 20122013 (September 30, 20112012 - $141,031).8.LONG TERM INVESTMENTSResources Conservation BoardRegulators (“ERCB”AER”) which bears a interest at a rate of prime minus 0.375% and has no stated date of maturity. These investments are required by the ERCB to ensure there are sufficient future cash flows to meet the expected future asset retirement obligations and are restricted for this purpose.9.SIGNIFICANT TRANSACTIONS WITH RELATED PARTIESAccounts receivable – related party was $nil as of September 30, 2012 (September 30, 2011 - $2,522) for rents receivables from a corporation owned by a director. This amount is unsecured, non-interest bearing and has no fixed terms of repayment. The balance was repaid subsequent to year-end.$408,277$18,144 as of September 30, 20122013 (September 30, 20112012 - $202,638)$408,277) for fees payable to corporations owned by directors. This amount is unsecured, non-interest bearing, and has no fixed terms of repayment.2012,2013, officers, directors, their families, and their controlled entities have acquired 52.19%52.56% of the Company’s outstanding common capital stock. This percentage does not include unexercised warrants or stock options.$327,459$275,800 to two related parties for professional fees and consulting services during the year ended September 30, 20122013 (September 30, 20112012 - $209,117).10.ASSET RETIREMENT OBLIGATIONS2012,2013, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $664,403$674,296 (September 30, 20112012 - $644,226)$664,403). The fair value of the liability at September 30, 20122013 is estimated to be $425,700$446,155 (September 30, 20112012 - $387,368)$425,700) using a risk free rate of 3.74% and an inflation rate of 2%. The actual costs to settle the obligation are expected to occur in approximately 35 years. September 30,
2012 September 30,
2011 Balance, beginning of year $ 387,368 $ 386,934 Liabilities incurred – – Effect of foreign exchange 22,038 (5,490 ) Disposal – (6,839 ) Accretion expense 16,294 12,763 Balance, end of year $ 425,700 $ 387,368 11.COMMON STOCK September 30, 2013 September 30, 2012 Balance, beginning of year $ 425,700 $ 387,368 Liabilities incurred 23,400 – Effect of foreign exchange (19,299 ) 22,038 Disposal – – Accretion expense 16,354 16,294 Balance, end of year $ 446,155 $ 425,700 9, 2010,23, 2012, the Company completed twoa private placementsplacement for an aggregate of 29,285,71342,857,142 units at a price of $0.07 per unit for an aggregate of $2,050,000$3,000,000 (including the Deposita deposit received prior to September 30, 20102012 of $48,555)$300,000). Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.105 per common share 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 the shares trade is equal to or exceeds $1.00 for 30 consecutive trading days, the warrant term shall automatically accelerate to the date which is 30 calendar days following the date that written notice has been given to the warrant holders. The warrants expire on November 9, 2013.On March 23, 2011, the Board of Directors (the “Board”) approved the issuance of 500,000 restricted common shares valued at $70,000 to be issued to a new director as an incentive to join our Board. Also, on March 23, 2011, the Board approved issuance of 180,000 restricted common shares valued at $25,200 to be issued on April 1, 2011 to a contractor as compensation for services provided to the Company during the period from April 1, 2010 to March 31, 2011. These transactions have been recorded in the Balance Sheets under Shareholders’ Equity at the fair2015. The value of the common shares issued.14, 2011, 12,638,29712 and August 15, 2013, six directors and two consultants of the Company acquired a combined total of 3,768,096 common shares, upon exercising stock options and warrants, previously grantedat exercise prices ranging from $0.05 to $0.14 per common share for total combined gross proceeds to the Company of $372,000.14, 2008 expired unexercised.2012: Shares Underlying
Warrants Outstanding Shares Underlying
Warrants Exercisable Range of Exercise Price Shares
Underlying
Warrants
Outstanding Weighted
Average
Remaining
Contractual
Life Weighted
Average
Exercise
Price Shares
Underlying
Warrants
Exercisable Weighted
Average
Exercise
Price $0.105 at September 30, 2012 29,285,713 1.11 $ 0.105 29,285,713 $ 0.105 29,285,713 1.11 $ 0.105 29,285,713 $ 0.105 Range of Exercise Price Shares Underlying Warrants Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Underlying Warrants Exercisable Weighted Average Exercise Price $0.105 at September 30, 2013 71,904,759 1.33 0.1050 71,904,759 0.1050 $0.075 at September 30, 2013 520,000 2.72 0.0750 520,000 0.0750 72,424,759 1.34 0.1048 72,424,759 0.1048 2012: Number of
Warrants Weighted
Average
Exercise
Price Intrinsic
Value Balance, September 30, 2011 44,824,513 $ 0.30 $ – Warrants expired October 31, 2011 (14,500,000 ) 0.63 – Warrants expired June 22, 2012 (1,000,000 ) 1.20 – Warrants expired July 11, 2012 (38,800 ) 1.20 – Balance, September 30, 2012 29,285,713 $ 0.105 $ – Outstanding Warrants, September 30, 2012 29,285,713 $ 0.105 $ – Number of Warrants Weighted Average Exercise Price Intrinsic Value Balance, September 30, 2012 29,285,713 $ 0.1050 $ – Warrants granted November 23, 2012 42,857,142 0.1050 – Warrants granted June 20, 2013 850,000 0.0750 – Warrants exercised August 12, 2013 330,000 0.0750 0.3650 Warrants exercised August 14, 2013 238,096 0.1050 0.3150 Balance, September 30, 2013 72,424,759 $ 0.1048 $ 0.1952 Outstanding Warrants, September 30, 2013 72,424,759 $ 0.1048 $ 0.1952 29,285,71372,424,759 warrants outstanding as of September 30, 20122013 (September 30, 20112012 – 44,824,513)29,285,713), which have a historical fair market value of $763,533$1,743,336 (September 30, 20112012 - $2,798,059)$763,533).received $300,000used the Black-Scholes option pricing model (“Black-Scholes”) to value the options and warrants. This model was developed for use in estimating the year ended September 30, 2012 (September 30, 2011 - $nil) in deposits for stock, forfair value of traded “European” options which are liquid and that have no vesting restrictions and are fully transferable. Stock options and the warrants attached to the units issued by the Company received subsequent subscription agreements.12.STOCK OPTIONS“Plan”“Plan’). The Plan was approved by the majority of shareholders at the February 24, 2010 general meeting of shareholders. The Plan, is administered by the Board, permits options to acquire shares of the Company’s common stock (the “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.On November 28, 2010, all of the stock options granted previously 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, the Board approved to decrease the exercise price of the stock options to purchase 36,000 shares of common stock of Deep Well previously granted to an employee of the Company on September 20, 2007. The exercise price of the stock option is reduced from $0.47 per common share to $0.14 per common share, effective immediately. All other terms and conditions of the option agreement will remain unchanged. The options expired unexercised on September 20, 2012. 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,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 five-year life.Mr. David Roffa director expired unexercised.a certainan employee of the Company, respectively, expired unexercised.2012,2013, the Company recorded share based compensation expense related to stock options in the amount of $108,664$125,099 (September 30, 20112012 - $199,081)$108,664) on the 2,700,000 stock options issuedvested on March 23, 2011. No options were exercised during the year ended September 30, 2012, therefore, the intrinsic value of the options exercised during the year ended September 30, 2012 is $nil.2013 and on June 20, 2013. As of September 30, 2012,2013, there was remaining unrecognized compensation cost of $25,952$83,853 related to the non-vested portion of these unit option awards. Compensation expense is based upon straight-line depreciation of the grant-date fair value over the vesting period of the underlying unit option. 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 $0.14 at September 30, 2012 2,700,000 3.48 0.14 1,800,000 $ 0.14 2,700,000 3.48 $ 0.14 1,800,000 $ 0.14 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 $0.14 at September 30, 2013 900,000 2.48 0.14 900,000 0.14 $0.05 at September 30, 2013 3,450,000 4.72 0.05 550,000 0.05 4,350,000 4.26 0.07 1,450,000 0.11 2012,2013, was $nil$0.19 (September 30, 20112012 - $nil).2012: Number of
Underlying
Shares Weighted
Average
Exercise
Price Weighted
Average Fair
Market
Value Balance, September 30, 2011 3,351,000 $ 0.23 $ 0.15 Options expired October 25, 2011 (375,000 ) 0.71 0.27 Options expired September 20, 2012 (36,000 ) 0.14 0.36 Options expired September 20, 2012 (240,000 ) 0.47 0.24 Balance, September 30, 2012 2,700,000 $ 0.14 $ 0.12 Exercisable, September 30, 2012 1,800,000 $ 0.14 $ 0.12 The following table summarizes the activity2013: Number of Underlying Shares Weighted Average Exercise Price Weighted Average Fair Market Value Balance , September 30, 2012 2,700,000 $ 0.14 $ 0.12 Balance, September 30, 2013 4,350,000 $ 0.07 $ 0.06 Exercisable, September 30, 2013 1,450,000 $ 0.11 $ 0.09 Company’s non-vestedoptions granted at September 30, 2013 and September 30, 2012 and changes during the periods then ended is presented below: September 30, 2013 September 30, 2012 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding balance at beginning of period 1,800,000 $ 0.14 1,800,000 $ 0.14 Vested at March 23, 2013 900,000 0.14 – – Granted at June 20, 2013 4,850,000 0.05 – – Vested at June 20,2013 1,950,000 0.05 – – Exercised August 12 - 15, 2013 1,800,000 0.14 – – Exercised August 12 - 15, 2013 1,400,000 0.05 – – Outstanding at end of period 4,350,000 $ 0.07 1,800,000 $ 0.14 Exercisable 1,450,000 0.11 1,800,000 0.14 sinceoutstanding as of September 30, 2011: Non-Vested Options Number of
Underlying
Shares Weighted
Average
Exercise
Price Non-vested at September 30, 2011 1,800,000 $ 0.14 Options vested at March 23, 2012 (900,000 ) 0.14 Non-vested at September 30, 2012 900,000 $ 0.14 option-pricingoption pricing model (“Black-Scholes”) to value the options and warrants. This model was developed for use in estimating the fair value of traded “European” options which are liquid and that have no vesting restrictions and are fully transferable. Stock options and the warrants attached to the units issued by the Company are non-transferable and vest over time, and are “American” options. Option pricing models require the input of subjective assumptions including expected share price volatility. The fair value estimate can vary materially as a result of changes in the assumptions. The following assumptions are used in the Black-Scholes option-pricing model:wasranged from 96% to 116%.companyCompany currently pays no dividends and does not expect to pay dividends in the foreseeable future.was 2.07%ranged from 0.62% to 1.31%.13.CHANGES IN NON-CASH WORKING CAPITAL September September 30, 2012 30, 2011 Accounts receivable $ (119,002 ) $ (11,542 ) Prepaid expenses 2,066 38,419 Accounts payable 259,410 92,643 $ 142,474 $ 119,520 14.INCOME TAXES September September 30, 2013 30, 2012 Accounts receivable $ 101,035 $ (119,002 ) Prepaid expenses (36,468 ) 2,066 Accounts payable (194,572 ) 259,410 $ (130,005 ) $ 142,474 2012,2013, the Company has approximately $4,149,303 (2011$5,759,755 (2012 – $4,032,878)$4,149,303) of operating losses expiring through 20322033 that may be used to offset future taxable income but are subject to various limitations imposed by rules and regulations of the Internal Revenue Service. The net operating losses are limited each year to offset future taxable income, if any, due to the change of ownership in the Company's outstanding shares of common stock. In addition, at September 30, 2012,2013, the Company had an unused Canadian net operating loss carry-forward of approximately $10,890,933 (2011$11,687,391 (2012 – $10,449,641)$10,890,933), expiring through 2032.2033. These operating loss carry-forwards may result in future income tax benefits of approximately $4,215,830.$4,937,762. However, because realization is uncertain at this time, a valuation reserve in the same amount has been established. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Year Ended
September 30,
2012 Year Ended
September 30,
2011 Statutory and effective tax rate Domestic Statutory U.S. federal rate 35.00 % 35.00 % Foreign 25.375 % 26.50 % Year Ended
September 30,
2012 Year Ended
September 30,
2011 Income taxes recovered at the statutory and effective tax rate Domestic Statutory U.S. federal rate $ 81,533 $ 149,187 Foreign 218,758 292,549 Timing differences: Non-deductible expenses (93,161 ) (120,107 ) Other deductible charges 2,086 2,188 Benefit of tax losses not recognized in the year (209,216 ) (323,817 ) Income tax recovery (expense) recognized in the year $ – $ – �� Statutory and effective tax rate Domestic Statutory U.S. federal rate 35.00 % 35.00 % Foreign 25.00 % 25.375 % Income taxes recovered at the statutory and effective tax rate Domestic Statutory U.S. federal rate $ 607,443 $ 81,533 Foreign 181,963 218,758 Timing differences: Non-deductible expenses (74,171 ) (93,161 ) Other deductible charges 67,568 2,086 Benefit of tax losses not recognized in the year (782,803 ) (209,216 ) Income tax recovery (expense) recognized in the year $ – $ – Year Ended
September 30,
2012 Year Ended
September 30,
2011 Deferred income tax assets (liabilities) Net operating loss carry-forwards $ 4,215,830 $ 4,180,662 Oil and gas properties 107,344 108,009 Equipment 165,917 144,603 Valuation allowance (4,489,091 ) (4,433,274 ) Net deferred income tax assets $ – $ – Deferred income tax assets (liabilities) Net operating loss carry-forwards $ 4,937,762 $ 4,215,830 Oil and gas properties 731,166 107,344 Equipment 183,824 165,917 Valuation allowance (5,852,752 ) (4,489,091 ) Net deferred income tax assets $ – $ – 15.COMMITMENTS1)1.) Portwest Investments Ltd. (“Portwest”), a company owned 100% by Dr. Horst A. Schmid (the “Consultant”), for providing services to the Company as Chief Executive Officer and President for Cdn $12,500 Cdn per month. As of September 30, 2012,On July 1, 2005, the Company has accrued Cdn $259,500 owingentered into a consulting agreement (the “Prior Agreement”) with Portwest, as filed with the Company’s annual report on Form 10-KSB filed on February 23, 2007, and incorporated by reference herein. On July 10, 2013, the Company and Portwest agreed to Portwest Investments Ltd.,amend (the “Amending Agreement”) the Prior Agreement whereby the following was settled and did not pay out this accrued portionamended:i. Effective date of the Amending Agreement will be June 20, 2013; ii. Term of Agreement will be until December 31, 2014; iii. The Consultant shall continue to Portwest Investments Ltd. since April 2010 for theprovide services of Dr. Schmid as Chief Executive Officer and President of the Company.Company until the termination of the Agreement;iv. The fees payable to the Consultant in the Prior Agreement will be terminated and the Company will grant the Consultant 5-year options on 1,000,000 of its common shares exercisable at $0.05 per share. One half of these shares were vested immediately and the remaining one half will be vested on June 20, 2014; v. The Consultant will receive: a. 2)$70,000 Cdn, andb. 850,000 units of the Company’s shares and warrants at a price of $0.05 per unit. Each unit shall be comprised of one restricted Company common share and one 3 year full warrant entitling Portwest to be able to purchase another share for $0.075. The warrants expire on June 20, 2016, 2.) Concorde Consulting, a company owned 100% by Mr. Curtis J. Sparrow, for providing services as Chief Financial Officer to the Company for Cdn $15,000 Cdn per month. As of September 30, 2013 and September 30, 2012 the Company owed Concorde Consulting Cdn $16,225 and Cdn $138,725, respectively.in Canadian dollars are as follows: 2013 $ 47,647 2014 $ 10,625 2014 Q1 (October - December) 16.SUBSEQUENT EVENTS$10,625 Effective on November 23, 2012, thecompleted a private placement for an aggregate of 42,857,142 units at a price of $0.07 per unit for an aggregate of $300,000,000 (including the Deposit received prior to September 30, 2012 of $300,000). Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of $0.105 per common share for a period of three years from the date of closing, provided that if the closing pricereversed part of the Common Sharesreceivables and bad debts for the Company’s joint venture co-owners in the period at an amount of $267,962 (Cdn $265,651) of which $239,459 was related to a purchase agreement wherein the Company on the principal market on which the shares trade is equal to or exceeds US$1.00 for 30 consecutive trading days, the warrant term shall automatically accelerate to the date which is 30 calendar days following the date that written notice has been given to the warrantholders. The warrants expire on November 23, 2015.Effective on December 3, 2012, the Company entered into a Purchase and Sale agreement with 1132559 Alberta Ltd. (“113”) and acquired an additional 10% working interest in most of the Sawn Lake oil sands properties where the Company already owns working interests, in exchange for the following: 1.) $2.4 million Canadian; 2.)$2,412,960 (Cdn $2,400,000), the discontinuance without costs, of the Court of Queen’s Bench, Judicial District of Edmonton, Action No. 0803-0869two lawsuits, and Action No. 1003-14659 filed against 113; and 3.) Forgivingforgiving the amounts owned from 113 to the Company in the amount of $239,267.88 Canadianowed and any defaults and penalties that the Company had imposed upon 113.17.LEGAL ACTIONS2012,2013, no contingent liability has been recorded, as the Company believes that a successful outcome for the Plaintiff is remote.Deep Well plans to vigorously defend itselfPlaintiff’s claims.Company as set out in the Plaintiffs Amended Statement of Claim.at September 30, 2012, no contingent liabilitya result of this extension, the expiration date of the warrants has been recorded, asamended from the original expiry date of November 9, 2013 to November 23, 2015.believes thatgranted a successful outcomecontractor an option to purchase 250,000 shares of common stock at an exercise price of $0.30 per common share, all vesting immediately, with a five-year life, for his services in connection with the Plaintiff is remote.Farmout Agreement dated July 31, 2013.i. ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREThe application of accounting principles to a specific transaction, either completed or proposed;None.ii. The type of audit opinion that might be rendered on the Company’s consolidated financial statements, and none of the following was provided to the Company: (a) a written report, or (b) oral advice that Sadler, Gibb & Associates, L.L.C. concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issue; or iii. Any matter that was subject of a disagreement, as that term is defined in Item 304 of Regulation S-K. ITEM 9A.CONTROLS AND PROCEDURES2012,2013, an evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934) was carried out under the supervision and with the participation of our principal executive officer and principal financial officer. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that as of the end of that fiscal year, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.2012.2013. This assessment was based on criteria for effective internal control over financial reporting described in the internal control integrated framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management believes that, as of September 30, 2012,2013, our internal control over financial reporting was effective.2012.20122013 there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.ITEM 9B.OTHER INFORMATIONITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEAs at September 30, 20122013Name Age Position/Office Dr. Horst A. Schmid 7980 Director and Chairman of the Board, President and Chief Executive Officer Mr. Said Arrata 7273 Director Mr. Satya Brata Das 5657 Director Mr. David Roff 4142 Director Mr. Curtis James Sparrow 5557 Director and Chief Financial Officer, Secretary and Treasurer Mr. Malik Youyou 5960 Director 20122013 there are no written employment contracts for officers outstanding, other than the consulting contracts as disclosed herein.section.sector. Mr. Sparrow has been involved in the oil and gas industry in various capacities for over 3035 years. He has held directorships and senior officer positions with junior exploration and development companies before becoming a self-employed consultant. He has also participated in the marketing side of the oil and gas industry, and was part of an acquisition team formed to assess and develop a bid for a multi-billion dollar integrated oil company. His experience also includes corporate and project management, international businesses and mining. Mr. Sparrow received his Bachelor of Science Degree in Engineering and Masters Degree in Business Administration from the University of Alberta. Mr. Sparrow is also a registered Professional Engineer.is currently servinghas served as a director of Deep Well since his reappointment on April 3, 2006. He was the former President and Sole Director of Deep Well from September 10, 2003 until February 6, 2004. Mr. Roff is the co-president of Brave Consulting,Investment Corporation, a private consulting and investment corporationcompany and has held this position since 2001. Brave Consulting was engaged by Deep Well in July 2005 and provided services to our Company until March 2009. Mr. Roff has extensive experience working with small cap public companies for more than ten years. Prior to that, Mr. Roff was a management consultant for Coopers & Lybrand Consulting where he advised large financial institutions, investment fund complexes and other organizations on technology and internal control strategies. Mr. Roff is an officer and director of Arkson Nutraceuticals and Hudson’s Grill International. Mr. Roff is a Chartered Professional Accountant with a B.A. degree from the University of Western Ontario.isare a party. For a description of certain legal proceedings involving Deep Well and its subsidiaries, see the section of this annual report on Form 10-K entitled Item 3 Legal Proceedings.InProceedings. In the past ten years:offences)offenses).this section 229.401 of Regulation S-K, or to be associated with persons engaged in any such activity.20122013 fiscal year, as required under Section 16(a)(2) of the Securities Exchange Act of 1934, the following directors, although they reported all their transactions as required on either a Form 3 or Form 4, did not report on a timely basis as follows: Mr. Said Arrata, a director of our Company, filed two Form 4 late; Mr. Satya Brata Das, a director of our Company, filed two Form 4s late; Mr. David Roff, a director of our Company, filed onetwo Form 4 late in connection with4s late; Dr. Horst A. Schmid, a director of our Company, filed two Form 4s late; Mr. Roff’s expired unexercised stock options; andCurtis Sparrow, Dr. Horst A. Schmid, a director of our Company, filed two Form 4s late; ; Mr. Malik Youyou, a director and a 10% or more beneficial owner of our Company, filed two Form 4s late in connection with Mr. Youyou’s expired unexercised warrants.
late; and MPI S.A., a 10% or more beneficial owner of our Company, filed one Form 3 late.512012,2013, our Company had not yet adopted a formal code of ethics governing its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.We have not adopted a code of ethics because we have limited operations.Our Board of Directors will address this issue in the future to determine the adoption of a code of ethics. In the meantime, our management intends to promote honest and ethical conduct, full, fair, accurate, understandable and timely disclosure in our reports to the SEC, and compliance with applicable governmental laws, rules and regulations.NASDAQStockNASDAQ Stock Market Rule 5605(a)(2), we determined thatas of September 30, 2012,2013, our Board of Directors consisted of four independent and two non-independent directors.The directors of our Company are as follows:As at September 30, 20122013Name 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 Independent director Mr. Curtis James Sparrow 2004 Non-independent director Mr. Malik Youyou 2008 Independent director 20122013 fiscal year end there were no meetings of our corporate governance committee.2012.2013. Our last general meeting of stockholders was held on February 24, 2010.Currently,As of September 30, 2013, Dr. Horst A. Schmid is our President and Chief Executive Officer and also serves as the Chairman of our Board of Directors. Because of the small size of our Company we do not have a lead independent director. Our Board of Directors consists of four independent and two non-independent directors. Our independent directors take an active role on our Board of Directors and make up a majority of our Board.Given the size of our Company, our entire Board of Directors believe that our current board leadership structure is appropriate at this time and that Dr. Horst A. Schmid and Mr. Curtis Sparrow bring valuable industry experience and historical knowledge of our Company’s history.ITEM 11.EXECUTIVE COMPENSATION20122013 and September 30, 2011,2012, by the executive officers listed below (the “Named Executive Officers”).Executive Compensation Summary Name and Principal Position Fiscal
Year
Sept. 30 Fee
$Cdn Bonus
$US Stock
Awards
$US Option
Awards $US Non-Equity
Incentive
Plan
Compen-
sation $US Non-
qualified
Deferred
Compen-
sation
Earnings
$US All Other
Compen-
sation $US Total $US Dr. Horst A. Schmid(1) 2012 $ 150,000 (2) $ – $ – $ 18,111 (3) $ – $ – $ – (4) $ 170,511 (9) President and 2011 $ 150,000 (2) $ – $ – $ 32,958 (3) – $ – $ 2,000 (4) $ 179,348 (9) Chief Executive Officer Mr. Curtis James Sparrow(5) 2012 $ 180,000 (6) $ – $ – $ 18,111 (7) $ – $ – $ – (8) $ 200,991 (9) Chief Financial Officer 2011 $ 180,000 (6) $ – �� $ – $ 32,958 (7) – $ – $ 1,000 (8) $ 207,226 (9) (1) Dr. Horst A. Schmid has served our Company as director and Chairman of the Board since February 6, 2004 to present. From June 29, 2005 to present Dr. Schmid has been the President and Chief Executive Officer of our Company.(2) Portwest Investments Ltd., a company owned 100% by Dr. Horst A. Schmid, provided services as Chief Executive Officer and President to our Company for Cdn $150,000 for the 2012 fiscal year and Cdn $150,000 for the 2011 fiscal year. For the 2012 and 2011 fiscal years, our Company accrued Cdn $150,000 and Cdn $93,750, respectively, in amounts owing to Portwest, but did not pay out any of this accrued portion of the above fees to Portwest for the services of Dr. Schmid as Chief Executive Officer and President of our Company.(3) On November 28, 2010, 375,000 and 390,000 stock options previously granted on November 28, 2005 to Dr. Horst A. Schmid and Portwest Investments Ltd., respectively, expired unexercised. On March 23, 2011, our Board granted Dr. Schmid, as a Director of our Company, 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 five-year life.(4) Dr. Horst A. Schmid was paid $nil for the fiscal year 2012 and $2,000 for the fiscal year 2011, for director’s fees for his services on the Board of Directors as Chairman of the Board of our Company.(5) Mr. Curtis James Sparrow has served our Company as director since February 6, 2004. From February 9, 2004 to present Mr. Sparrow has been the Chief Financial Officer, Corporate Secretary and Treasurer of our Company.(6)Concorde Consulting, a company owned 100% by Mr. Curtis James Sparrow, provided services as Chief Financial Officer to our Company for Cdn $180,000 for the 2012 fiscal year and Cdn $180,000 for the 2011 fiscal year. For the 2012 and 2011 fiscal years, our Company accrued Cdn $60,000 and Cdn $45,000, respectively, in amounts owing to Concorde, but did not pay out this accrued portion of the above fees to Concorde for the services of Mr. Sparrow as Chief Financial Officer of our Company.(7) On November 28, 2010, 375,000 and 390,000 stock options previously granted on November 28, 2005 to Mr. Curtis James Sparrow and Concorde Consulting, respectively, expired unexercised. On March 23, 2011, our Board granted Mr. Sparrow, as a Director of our Company, 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 five-year life.(8) Mr. Curtis James Sparrow was paid $nil for the fiscal year 2012 and $1,000 for the fiscal year 2011, for director’s fees for his services on the Board of Directors as director of our Company.(9) The Cdn dollar amounts in the fee column for Dr. Schmid’s and Mr. Sparrow’s September 30, 2012 and 2011 fiscal year fees were converted to US$ in the total column of this table based on the year-end exchange rates of $1.016 and $0.9626, respectively.Executive Compensation Summary Name and Principal Position Fiscal Year Sept. 30 Option Awards $US Non-Equity Incentive Plan Compen-sation $US Non-qualified Deferred Compen-sation Earnings $US All Other Compen-sation $US 2013 $ – (2) $ – $ – $ 36,496 (3) $ – $ – $ – $ 36,496 (7) President and 2012 $ 3,909 (2) $ – $ – $ 18,111 (3) – $ – $ – $ 22,083 (7) Chief Executive Officer 2013 $ 180,000 (5) $ – $ – $ 36,496 (6) $ – $ – $ – $ 211,510 (7) Chief Financial Officer 2012 $ 180,000 (5) $ – $ – $ 18,111 (6) – $ – $ – $ 200,991 (7) 1. Portwest Investments Ltd. (“Portwest”), a company owned 100% by Dr. Horst A. Schmid for providing services as Chief Executive Officer and President to our Company for $12,500 Cdn $12,500 per month. On July 1, 2005, our Company entered into a consulting agreement (the “Prior Agreement”) with Portwest, as filed with our Company’s annual report on Form 10-KSB filed on February 23, 2007, and incorporated by reference herein. On July 10, 2013, our Company and Portwest agreed to amend the Prior Agreement whereby the following was settled and amended:a) Effective date of the Amending Agreement will be June 20, 2013; b) Term of Agreement will be until December 31, 2014; c) Dr. Schmid shall continue to provide services as Chief Executive Officer and President of our Company until the termination of the Agreement; d) The fees payable to Portwest in the Prior Agreement will be terminated and our Company will grant Portwest 5-year options on 1,000,000 of its common shares exercisable at $0.05 per share. One half of these shares were vested immediately and the remaining one half will be vested on June 20, 2014; e) The Consultant will receive: i. $70,000 Cdn, and ii. 850,000 units of our Company’s shares and warrants at a price of $0.05 per unit. Each unit shall be comprised of one restricted Company common share and one 3 year full warrant entitling Portwest to be able to purchase another share for $0.075. The warrants expire on June 20, 2016. 2. Concorde Consulting, a company owned 100% by Mr. Curtis James Sparrow for providing services as Chief Financial Officer for $15,000 Cdn $15,000 per month. As of September 30, 2013 and September 30, 2012 our Company owed Concorde Consulting $16,225 Cdn and $138,725 Cdn, respectively.On November 28, 2005, our Board of Directors of our Company previously granted 390,000 options to acquire common shares to the above corporations providing consulting services to our Company and on November 28, 2010 these options expired unexercised and no further options were granted to corporations providing consulting services as executive officers to our Company. Outstanding Equity Awards Granted to Executive Officers at September 30, 2012 Options Awards (1) Stock Awards Name Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) Option
Exercise
Price ($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested (#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($) Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#) Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($) Portwest Investments Ltd.(1) – – – – – – – – – Concorde Consulting(2) – – – – – – – – – (1) Portwest Investments Ltd., is owned 100% by Dr. Horst A. Schmid. Dr. Schmid provides servicesChiefherein reported under the Executive Officer and President toCompensation Summary, our Company.(2) Concorde Consulting, is owned 100% by Mr. Curtis James Sparrow. Mr. Sparrow provides services as Chief Financial Officer to our Company.Compensation of DirectorsOn November 28, 2005, our Company adopted a cash compensation plan pursuant to which each director is paid the amount of $500 for each meeting of the Board of Directors or committee meeting that they attend, or resolution participated in, plus, we reimbursegranted Dr. Schmid and Mr. Sparrow, as directors of our Company, options to purchase 450,000 shares each director for actual expenses incurred in connectionof common stock at an exercise price of $0.05 per common share, one-third vesting immediately, one-third vesting on June 20, 2014, and one-third on June 20, 2015, each with Board meeting attendance. The Chairmana five-year life.Outstanding Equity Awards Granted to Executive Officers at September 30, 2013 Stock Awards Name Option Expiration Date 500,000 500,000 – $ 0.05 06/20/2018 – – – – – 500,000 – $ 0.05 06/20/2018 – – – – the Board is paid $1,000 for each Board event as described above plus reimbursement for actual expenses incurred in connection with Board meeting attendance.2012,2013, our Company recorded share based compensation expense related to stock options in the amount of $108,664$125,099 (September 30, 20112012 - $199,081)$108,664) on the 2,700,000 stock options issuedthat vested on March 23, 2011. No options were exercised during the year ended September 30, 2012, therefore, the intrinsic value of the options exercised during the year ended September 30, 2012 is $nil.2013 and on June 20, 2013. As of September 30, 2012,2013, there was remaining unrecognized compensation cost of $25,952$83,853 related to the non-vested portion of these unit option awards. Compensation expense is based upon straight-line depreciation of the grant-date fair value over the vesting period of the underlying unit option.Director Compensation at September 30, 2012 Name Fees Earned or
Paid in Cash ($) Stock Awards
($) Option Awards
($)(1) Non-Equity
Incentive Plan
Compensation
($) Nonqualified
Deferred
Compensation
Earnings ($) All Other
Compensation
($) Total ($) Dr. Horst A. Schmid Disclosed in the Executive Compensation Summary under Item 11. Mr. Said Arrata(2) – – 18,111 – – – 18,111 Mr. Satya Brata Das(3) – – 18,111 – – – 18,111 Mr. David Roff(4) – – 18,111 – – – 18,111 Mr. Curtis James Sparrow Disclosed in the Executive Compensation Summary under Item 11. Mr. Malik Youyou(5) – – 18,111 – – – $ 18,111 (1) These estimated valuations include the value of the vested options received on March 23, 2011.(2) Mr. Said Arrata has served our Company as Director since March 8, 2011.(3) Mr. Satya Brata Das has served our Company as Director since March 8, 2011.(4) Mr. David Roff has served our Company as Director since April 3, 2006.(5) Mr. Malik Youyou has served our Company as Director since August 20, 2008.Director Compensation at September 30, 2013 Name Total ($) Dr. Horst A. Schmid Disclosed in the Executive Compensation Summary under Item 11. – – 12,358 – – – 12,358 – – 12,358 – – – 12,358 – – 12,358 – – – 12,358 Mr. Curtis James Sparrow Disclosed in the Executive Compensation Summary under Item 11. – – 12,358 – – – 12,358 ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS2012,2013, with respect to shares of Deep Well common stock that may be issued under our existing equity compensation plan, see Item 5 “Equity Compensation Plan Information” of this report on Form 10-K.55September 30, 2012December 31, 2013 by each person or group known by us to be the beneficial owner of more than 5%, and all of our directors and executive officers individually and as a group.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of December 15, 2012Name and Address of Beneficial Owner Title of Class Number of Shares
Beneficially Owned (1) (2) Percentage of Class
Beneficially Owned Nature of Beneficial
Ownership Malik Youyou Common 182,462,393 72.60 %(3) Direct and Indirect Director Sadovnicheskeya nab 69 Moscow 115035, Russia VP Bank (Schweiz) AG Common 10,579,084 5.89 (4) Direct Beneficial Owner of 5% or more Bahnhofstr. 3 8022 Zuerich, Switzerland Dr. Horst A. Schmid Common 2,250,000 1.25 %(5) Direct and Indirect Director and Chairman of the Board, President and Chief Executive Officer Suite 700, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada Mr. Satya Brata Das Common 1,968,570 1.09 %(6) Direct and Indirect Director Suite 710, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada Mr. Said Arrata Common 800,000 * (7) Direct Director Suite 2320, 255 – 5 Avenue S.W. Calgary, Alberta T2P 3G6 Canada Mr. David Roff Common 379,886 * (8) Direct Director 27 Chicora Avenue Toronto, Ontario M5R 1W7 Canada Mr. Curtis James Sparrow Common 300,000 * (9) Direct Director, Chief Financial Officer, Corporate Secretary and Treasurer Suite 700, 10150 - 100 Street Edmonton, Alberta T5J 0P6 Canada All Officers and Directors as a Group Common 188,160,849 74.21 % Direct and Indirect * Less than 1%(1) Under the rules of the SEC, a person or entity beneficially owns stock of a company if such person or entity directly or indirectly has, or shares the power to, vote or direct the voting, or the power to dispose or direct the disposition of such stock, whether through any contract, arrangement, understanding, relationship or otherwise. A person or entity is also deemed to be the beneficial owner of stock if such person or entity has the right to acquire either of such powers at any time within 60 days through the exercise of any option, warrant, right or conversion privilege or pursuant to the power to revoke a trust, a discretionary account or similar arrangement or pursuant to the automatic termination of a trust, discretionary account or similar arrangement.(2) Based on 179,597,113 of our common shares issued and outstanding on December 15, 2012. For calculating the percentage of beneficial ownership separately for each person, his or her options, warrants or both that can be acquired within 60 days are included in both the numerator and the denominator. For the directors as a group, their collective options and warrants that can be acquired within 60 days are included in both the numerator and the denominator when calculating their group percentage ownership.(3) Mr. Malik Youyou has served our Company as director from August 20, 2008 to present. As of December 15, 2012, Mr. Youyou beneficially owns 182,462,393 shares of our common stock, of which 104,575,042 are held directly and 6,158,781 are held by Westline Enterprises Limited, a corporation 100% owned by Mr. Youyou. Mr. Youyou also holds presently exercisable warrants to acquire 71,428,570 shares of our common stock and presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 71,728,570 shares of our common stock, pursuant to the exercise of Mr. Youyou’s presently exercisable warrants and options, Mr. Youyou would beneficially own 72.6% of our Company’s outstanding common stock. As December 15, 2012, Mr. Youyou has not exercised any warrants or options and without the exercise of Mr. Youyou’s warrants and options, Mr. Youyou has a 61.66% ownership of our issued and outstanding common stock.(4) Based solely on our statement of security holder listing report received from our transfer agent on December 15, 2012, VP Bank (Schweiz) AG owns 10, 579,084 shares of our common stock and based on this report VP Bank (Schweiz) AG owns 5.89% of our Company’s issued and outstanding common stock.(5)Dr. Horst A. Schmid has served our Company as director and Chairman of the Board from February 6, 2004 to present. Dr. Schmid has also served our Company as President and Chief Executive Officer from June 29, 2005 to present. Dr. Schmid’s beneficial ownership consists of Portwest Investment Ltd., owning 1,950,000 shares of our common stock. Portwest Investment Ltd. is a private corporation registered in Alberta, Canada, which is 100% owned and controlled by Dr. Schmid. Dr. Schmid also directly owns presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 300,000 shares of common stock, pursuant to the exercise of Dr. Schmid’s presently exercisable stock options, Dr. Schmid would beneficially own 1.25% of our Company’s outstanding common stock. As December 15, 2012, Dr. Schmid has not exercised any stock options and without the exercise of Dr. Schmid’s options, Dr. Schmid has a 1.09% ownership of our issued and outstanding common stock.(6)Mr. Satya Brata Das has served our Company as director since March 8, 2011. Mr. Das’ beneficial ownership of our common stock consist of 954,285 shares of our common stock, of which 240,000 are held directly and 714,285 are held by Cambridge Strategies Inc., a company 50% owned by Mr. Satya Brata Das and 50% owned by his wife. Mr. Das also directly owns presently exercisable options to acquire 300,000 shares of our common stock. Mr. Das also indirectly owns through Cambridge Strategies Inc. presently exercisable warrants to acquire an additional 714,285 shares of our common stock. Assuming the issuance of 1,014,285 shares of our common stock, pursuant to the exercise of Mr. Das’ presently exercisable warrants indirectly held and options directly held, Mr. Das would beneficially own 1.09% of our Company’s outstanding common stock. As December 15, 2012, Mr. Das has not exercised any warrants or options and without the exercise of Mr. Das’ warrants and options, Mr. Das has a 0.53% ownership of our issued and outstanding common stock.(7Mr. Said Arrata has served our Company as director since March 8, 2011 Mr. Arrata’s beneficial ownership of our common stock consist of 500,000 shares of our common stock. Mr. Arrata also directly owns presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 300,000 shares of our common stock, pursuant to the exercise of Mr. Arrata’s presently exercisable stock options, Mr. Arrata would beneficially own 0..44% of our Company’s outstanding common stock. As December 15, 2012, Mr. Arrata has not exercised any stock options and without the exercise of Mr. Arrata’s options, Mr. Arrata has a 0.28% ownership of our issued and outstanding common stock.(8)Mr. David Roff has served our Company as director since April 3, 2006. Mr. Roff’s beneficial ownership consists of 79,886 shares of our common stock. Mr. Roff also directly owns presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 300,000 shares of our common stock, pursuant to the exercise of Mr. Roff’s presently exercisable stock options, Mr. Roff would beneficially own 0..21% of our Company’s outstanding common stock. As December 15, 2012, Mr. Roff has not exercised any stock options and without the exercise of Mr. Roff’s options, Mr. Roff has a 0.04% ownership of our issued and outstanding common stock. As of October 25, 2011, 375,000 options previously granted to Mr. Roff expired unexercised.(9)Mr. Sparrow has served our Company as director and Chief Financial Officer since February 9, 2004. Mr. Sparrow holds presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 300,000 shares of common stock, pursuant to the exercise of Mr. Sparrow’s presently exercisable stock options, Mr. Sparrow would beneficially own 0.17% of our Company’s outstanding common stock. As December 15, 2012, Mr. Sparrow has not exercised any stock options and without the exercise of Mr. Sparrow’s options, Mr. Sparrow has a 0.00% ownership of our issued and outstanding common stock.Name and Address of Beneficial Owner Title of Class Percentage of Class Beneficially Owned Nature of Beneficial Ownership Common 183,827,014 Direct and Indirect Common 45,111,778 Direct Common 4,750,000 Direct and Indirect Common 2,268,570 Direct and Indirect Common 1,650,000 Direct and Indirect Common 1,100,000 Direct Common 762,441 Direct Common 194,358,025 64.11% Direct and Indirect * Less than 1% 15, 2012,31, 2013, and based solely on Mr. Malik Youyou’s filed Form 4s, and an Amended Schedule 13D both filed on December 12, 2012, Mr. Youyou, a director of our Company, beneficially owns 182,462,393183,827,014 common shares of Deep Well, representing 72.6%61.12% of Deep Well’s outstanding shares of common stock (assuming the exercise of all options andoutstanding warrants held by Mr. Youyou).ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEOn9, 2010,23, 2012, pursuant to a subscription agreement, our Company completed a private placement with Mr. Malik Youyou of an aggregate of 29,571,42842,857,142 units (“Units”) at a price of $0.07 per Unit,unit, for total gross proceeds of $2,000,000.$3,000,000 (including a deposit received prior to September 30, 2012 of $300,000). Each Unitunit 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 our 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 warrant holder. 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, as amended.Effective November 23, 2012, pursuant to a subscription agreement, our Company completed a private placement to one investor of an aggregate of 42,857,142 units (“Units”) at a price of $0.07 per Unit, for total gross proceeds of $3,000,000 (including a deposit received prior to September 30, 2012 of $300,000). 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 common shares trade is equal to or exceeds $1.00 for thirty consecutive trading days, the warrant term will automatically accelerate to the date that is thirty calendar days following the date that written notice has been given to the warrantholder.warrant holder. No commission or finder’s fees were payable in connection with this private placement. The Unitsunits were issued pursuant to Regulation S under the Securities Act of 1933, as amended. The warrants expire on November 23, 2015.15, 2012,31, 2013, Mr. Youyou beneficially owns 182,462,393183,827,014 shares of our common stock, of which 104,575,042105,175,042 shares are held directly and 6,158,7817,223,402 shares are held indirectly by Westline Enterprises Limited, a corporation 100% owned by Mr. Youyou. Mr. Youyou also presently holds presentlydirectly exercisable warrants to acquire 71,428,570 shares of our common stock and presently exercisable options to acquire 300,000 shares of our common stock. Assuming the issuance of 71,728,57071,428,570 shares of our common stock, pursuant to the exercise of Mr. Youyou’s presently exercisable warrants, and options, Mr. Youyou would beneficially own 72.6%61.12% of our Company’s outstanding common stock. As December 15, 2012,31, 2013, Mr. Youyou has not exercised any of these currently outstanding warrants or options and without the exercise of Mr. Youyou’s outstanding warrants, and options, Mr. Youyou has a 61.66%49.01% ownership of our issued and outstanding common stock.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESOn February 1, 2012, we hired an employee who just recently acquired her CA designation as a chartered accountant. This new employee prepared our second and third quarterly financial statements. All of our quarterly financial statements for the fiscal year ended September 30, 2012 and September 30, 2011werewere reviewed by Madsen & Associates, CPA’s Inc.In the fiscal year ended and our September 30, 2011, we paid Collins Barrow, an independent third party, PCAOB registered, chartered accounting firm fees of Cdn $60,948, relating to the preparation of our Company’s tax returns, quarterly and annual consolidated financial statements which were2012 year end was audited by MadsenSadler, Gibb & Associates, CPA’s Inc. Madsen & Associates, CPA’s Inc. and Sadler, Gibb & Associates, L.L.C. for professional services for the fiscal years ended September 30, 20122013 and September 30, 2011:Fee Category Fiscal 2012 Fees Fiscal 2011 Fees Audit Fees $ 25,000 $ 21,675 Audit Related Fees – – Tax Fees – – All Other Fees – – Total Fees $ 25,000 $ 21,675 Fee Category Fiscal 2013 Fees Fiscal 2012 Fees Audit Fees $ 29,500 $ 25,000 Audit Related Fees – – Tax Fees – – All Other Fees – – Total Fees $ 29,500 $ 25,000 2012. Also, audit fees consist of fees for services provided by Madsen & Associates, CPA’s Inc. for the audit of our annual financial statements included in this annual report on Form 10-K for the year ended September 30, 2011 and for the review of our quarterly financial statements included in our quarterly filings on Form 10-Q for the periods ending December 31, 2011, March 31, 2012 and June 30, 2012.or provided by Madsen & Associates, CPA’s Inc. Our Board of Directors has considered the nature and amount of the fees billed by Sadler, Gibb & Associates, L.L.C. and Madsen & Associates, CPA’s Inc., and believes that the provision of the services for activities unrelated to the audit of our financial statements is compatible with maintaining the independence of Sadler, Gibb & Associates, L.L.C. and Madsen & Associates, CPA’s Inc.ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES1. Consolidated Balance Sheets for September 30, 20122013 and 2011.2012.2. Consolidated Statements of Operations For the Years Ended September 30, 20122013 and 20112012 and the Period From September 10, 2003 (Inception of Exploration Stage) to September 30, 2012.2013.3. Consolidated Statements of Shareholders’ Equity For the Period From September 10, 2003 (Inception of Exploration Stage) to September 30, 2012.2013.4. Consolidated Statements of Cash Flows For the Years Ended September 30, 2013, 2012 2011 and the Period From September 10, 2003 (Inception of Exploration Stage) to September 30, 2012.2013.5. Notes to the Consolidated Financial Statements. 6. Sadler, Gibb & Associates, L.L.C. Report of Independent Registered Public Accounting Firm. 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 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). 3.6 Amended Articles of Incorporation filed with the State of Nevada on May 15, 2013 and effective on May 24, 2013, increasing the aggregate number of shares which the Company has authority to issue from 300,000,000 common shares, with $0.001 par value per share, to 600,000,000 common shares, with $0.001 par value per share, (incorporated by reference to exhibit 3.1 to our Form 8-K filed on May 17, 2013). 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). 4.2 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). 4.6 Form of Warrant issued pursuant to a Subscription Agreement dated effective November 23, 2012 by and among our Company with one investor related to one Private Placement offering, (incorporated by reference to exhibit 4.2 to our Form 8-K filed on December 12, 2012). 10.1*4.7 * Form of Warrant issued pursuant to a Subscription Agreement dated July 10, 2013 by and among our Company with a consultant of our Company related to an Amending Agreement by and between Northern Alberta Oil Ltd. and Portwest Investments Ltd., dated July 10, 2013 (incorporated by reference to exhibit 4.2 to our Form 8-K filed on July 16, 2013). 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*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*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*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). 10.610.5 Sample Indemnity Agreement with all Directors, (incorporated by reference to exhibit 10.27 to our Form 10-KSB filed on February 23, 2007). 10.7Non-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).10.8Non-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).10.910.6 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). 10.1010.7 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). 10.1110.8 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). 10.1210.9 Form of Subscription Agreement dated effective November 23, 2012 by and among our Company with one investor, (incorporated by reference to exhibit 4.1 to our Form 8-K filed on December 12, 2012). 10.1310.10 Form of Purchase and Sale Agreement effective December 3, 2012 by and among our Company and 1132559 Alberta Ltd., (incorporated by reference to exhibit 10.1 to our Form 8-K filed on December 12,17, 2012).10.11 * Form of Subscription Agreement dated July 10, 2013 by and among our Company with a consultant of our Company, related to an Amending Agreement by and between Northern Alberta Oil Ltd. and Portwest Investments Ltd., dated July 10, 2013 (incorporated by reference to exhibit 4.1 to our Form 8-K filed on July 16, 2013). 10.12 * Amended Consulting Agreement by and between Northern and Portwest Investments Ltd., dated July 10, 2013, (incorporated by reference to exhibit 10.3 to our Form 8-K filed on July 16, 2013). 10.13 Form of Subscription Agreement dated effective July 31, 2013 by and among our Company with one investor, (incorporated by reference to exhibit 4.1 to our Form 8-K filed on August 5, 2013 and exhibit 4.1 to our Form 8-K/A filed on October 15, 2013). Farmout Agreement between the Company and MP West Canada SAS dated July 31, 2013, , (incorporated by reference to exhibit 10.1 to our Form 8-K filed on October 15, 2013). 10.14 SAGD Demonstration Project Agreement dated July 30, 2013 between the Company and its joint venture partner, (incorporated by reference to exhibit 4.1 to our Form 8-K filed on August 21, 2013). 10.15 Amending SAGD Demonstration Project Agreement dated August 15, 2013 between the Company and its joint venture partner, (incorporated by reference to exhibit 4.2 to our Form 8-K filed on August 21, 2013). 16.1 Changes in registrant’s certifying accountant, Letter of Madsen & Associates, CPA’s Inc. dated November 16, 2012, (incorporated by reference to exhibit 16.1 to our Form 8-K filed on December 17, 2012). 21.1 Subsidiaries of Registrant, filed herewith. 23.1 Consent of DeGolyer and MacNaughton Canada Limited, independent petroleum engineers, (incorporated by reference to exhibit 23.1 on our Form 10-Q filed on May 15, 2012). 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/ Horst A. Schmid Dr. Horst A. Schmid Chairman of the Board Date January 15, 201314, 2014 By /s/ Horst A. Schmid Dr. Horst A. Schmid Chief Executive Officer and President (Principal Executive Officer) Date January 14, 2014 Date January 15, 2013 By /s/ CurtisC.J. Sparrow Mr. Curtis James Sparrow Chief Financial Officer (Principal Financial and Accounting Officer) Date January 15, 20136114, 2014