10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

RQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to________

Commission file number 0-24012

DEEP WELL OIL & GAS, INC.

(Exact name of registrant as specified in its charter)

Nevada	98-0501168
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Suite 700, 10150 - 100 Street, Edmonton, Alberta, Canada	T5J 0P6
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (780) 409-8144

Former name, former address and former fiscal year, if changed since last report: not applicable.

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of common stock outstanding as of June 30, 2015 was 229,374,605.

TABLE OF CONTENTS

		Page Number
PART I – FINANCIAL INFORMATION
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 4.	CONTROLS AND PROCEDURES	27
PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	27
ITEM 1A.	RISK FACTORS	27
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	27
ITEM 4.	MINE SAFETY DISCLOSURES	27
ITEM 5.	OTHER INFORMATION	28
ITEM 6.	EXHIBITS	28
SIGNATURES		29

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Condensed Consolidated Balance Sheets

June 30, 2015 and September 30, 2014

	June 30,			September 30,
	2015			2014
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	2,023,228		$	2,324,755
Accounts receivable net of allowance of $Nil (September 30, 2014 - $Nil)		226,765			1,050,099
Prepaid expenses		49,457			43,875
Total Current Assets		2,299,450			3,418,729
Long term investments		372,571			409,618
Oil and gas properties, net, based on successful efforts method of accounting		19,613,425			19,604,050
Property and equipment, net		217,697			259,198
TOTAL ASSETS	$	22,503,143		$	23,691,595
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	$	182,794		$	714,198
Accounts payable and accrued liabilities– related parties		7,101			16,977
Total Current Liabilities		189,895			731,175
Asset retirement obligations (Note 10)		435,415			469,013
TOTAL LIABILITIES		625,310			1,200,188
SHAREHOLDERS’ EQUITY
Common Stock: (Note 11)
Authorized: 600,000,000 shares at $0.001 par value
Issued and outstanding: 229,374,605 shares
(September 30, 2014 – 229,326,987 shares)		229,374			229,326
Additional paid in capital		41,911,156			41,040,447
Accumulated Deficit		(20,262,697	)		(18,778,366	)
Total Shareholders’ Equity		21,877,833			22,491,407
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	22,503,143		$	23,691,595

See accompanying notes to the condensed consolidated financial statements

3

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

(Unaudited)

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the Three and Nine Months Ended June 30, 2015 and 2014

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
Revenue	$	219,346		$	–		$	449,147		$	–
Royalty expenses		(11,127	)		–			(23,512	)		–
Revenue, net of royalty		208,219			–			425,635			–
Expenses
Operating expenses		425,684			–			1,540,206			–
Operating expenses covered by Farmout (Note 3)		(217,465	)		–			(1,114,571	)		–
General and administrative		337,016			55,031			1,434,203			862,245
Depreciation, accretion and depletion		21,721			25,790			64,541			74,315
Net loss from operations		(358,737	)		(80,821	)		(1,498,744	)		(936,560	)
Other income and expenses
Rental and other income		3,432			4,347			10,635			15,813
Interest income		1,081			2,091			3,778			9,009
Loss on disposal of assets		–			387			–			387
Net loss and comprehensive loss	$	(354,224	)	$	(73,996	)	$	(1,484,331	)	$	(911,351	)
Net loss per common share
Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted Average Outstanding Shares (in thousands)
Basic and Diluted		229,374			229,326			229,374			229,326

See accompanying notes to the condensed consolidated financial statements

4

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

(Unaudited)

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended June 30, 2015 and 2014

	June 30,			June 30,
	2015			2014
Operating Activities
Net loss	$	(1,484,331	)	$	(911,351	)
Items not affecting cash:
Share based compensation		865,756			239,480
Depreciation, accretion and depletion		64,541			74,315
Bad debts		–			428
Loss on disposal of assets		–			(387	)
Net changes in non-cash working capital (Note 13)		276,472			(593,796	)
Net Cash Used in Operating Activities		(277,562	)		(1,191,311	)
Investing Activities
Purchase of property and equipment		–			(408	)
Investment in oil and gas properties		(31,637	)		(3,635,922	)
Long term investments		2,671			(81,809	)
Net Cash Used in Investing Activities		(28,966	)		(3,718,139	)
Financing Activities
Payments on loan payable – related parties		–			(189,500	)
Proceeds from issuance of common stock		5,001			–
Net Cash Provided by (Used in) Financing Activities		5,001			(189,500	)
Decrease in cash and cash equivalents		(301,527	)		(5,098,950	)
Cash and cash equivalents, beginning of period		2,324,755			7,633,009
Cash and cash equivalents, end of period	$	2,023,228		$	2,534,059
Supplemental Cash Flow Information:
Cash paid for interest	$	–		$	–
Cash paid for income taxes	$	–		$	–

See accompanying notes to the condensed consolidated financial statements

5

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

(Unaudited)

Notes to the Condensed Consolidated Financial Statements

June 30, 2015

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Deep Well Oil & Gas, Inc. was originally incorporated on July 18, 1988 under the laws of the state of Nevada as Worldwide Stock Transfer, Inc. (Worldwide Stock Transfer, Inc. later changed its name to Allied Devices Corporation) and in connection with a plan of reorganization, effective on September 10, 2003, the company was reorganized and changed its name to Deep Well Oil & Gas, Inc. (“Deep Well”).

These consolidated financial statements have been prepared showing the name “Deep Well Oil & Gas, Inc. (and Subsidiaries)” (“the Company”) and the post-split common stock, with $0.001 par value.

Basis of Presentation

The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading.

These interim condensed consolidated financial statements follow the same significant accounting policies and methods of application as the Company’s annual consolidated financial statements for the year ended September 30, 2014.

These statements reflect all adjustments, consisting solely of normal recurring adjustments (unless otherwise disclosed) which, in the opinion of management, are necessary for a fair presentation of the information contained therein. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2014.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

These condensed consolidated financial statements include the accounts of two wholly owned subsidiaries: (1) Northern Alberta Oil Ltd. (“Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd., incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005. All inter-company balances and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Allowance for Doubtful Accounts

The Company determines allowances for doubtful accounts based on aging of specific accounts. Accounts receivable are stated at the historical carrying amounts net of allowances for doubtful accounts and include only the amounts the Company deems to be collectable. The allowance for bad debts was $nil and $nil at June 30, 2015 and September 30, 2014, respectively.

6

Crude oil and natural gas properties

The Company uses the successful efforts method of accounting for crude oil and natural gas properties whereby costs incurred to acquire mineral interests in crude oil and natural gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells, and expenditures for enhanced recovery operations are capitalized. Geological and geophysical costs, seismic costs incurred for exploratory projects, lease rentals and costs associated with unsuccessful exploratory wells or projects are expensed as incurred. Costs of seismic studies that are utilized in development drilling within an area of proved reserves are capitalized as development costs. To the extent a seismic project covers areas of both developmental and exploratory drilling, those seismic costs are proportionately allocated between capitalized development costs and exploration expense. Maintenance, repairs and costs of injection are expensed as incurred, except that the costs of replacements or renewals that expand capacity or improve production are capitalized.

Under the successful efforts method of accounting, the Company capitalizes exploratory drilling, equipping and facility costs on the balance sheet pending determination of whether the project has found proved reserves in economically producible quantities. The Company capitalizes costs associated with the acquisition or construction of support equipment and facilities with the drilling and development costs to which they relate. If proved reserves are assigned to a project, the associated capitalized costs become part of well equipment and facilities. However, if proved reserves are not found in a project, the capitalized costs associated with the project are expensed, net of any salvage value. Total capitalized costs pending the determination of proved reserves were approximately $19.6 million and $19.6 million at June 30, 2015 and September 30, 2014, respectively.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. Only half of the depreciation rate is taken in the year of acquisition. The following is a summary of the depreciation rates used in computing depreciation expense:

	%
Software		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

Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred. Leasehold improvements are amortized over the greater of five years or the remaining life of the lease agreement.

Long-Lived Assets

Oil and Gas Properties - Proved crude oil and natural gas properties are reviewed for impairment on a field-by-field basis each quarter, or when events and circumstances indicate a possible decline in the recoverability of the carrying value of such field. The estimated future cash flows expected in connection with the field are compared to the carrying amount of the field to determine if the carrying amount is recoverable. If the carrying amount of the field exceeds its estimated undiscounted future cash flows, the carrying amount of the field is reduced to its estimated fair value. Due to the unavailability of relevant comparable market data, a discounted cash flow method is used to determine the fair value of proved properties. The discounted cash flow method estimates future cash flows based on management’s estimates of future crude oil and natural gas production, commodity prices based on commodity futures price strips, operating and development costs, and a risk-adjusted discount rate.

Non-producing crude oil and natural gas properties primarily consist of undeveloped leasehold costs and costs associated with the purchase of certain proved undeveloped reserves. Individually significant non-producing properties, if any, are assessed for impairment on a property-by-property basis and, if the assessment indicates an impairment, a loss is recognized by providing a valuation allowance consistent with the level at which impairment was assessed. For individually insignificant non-producing properties, impairment losses are recognized by amortizing the portion of the properties’ costs which management estimates will not be transferred to proved properties over the lives of the leases based on experience of successful drilling and the average holding period. The Company’s impairment assessments are affected by economic factors such as the results of exploration activities, commodity price outlooks, anticipated drilling programs, remaining lease terms, and potential shifts in business strategy employed by management.

7

Non Oil and Gas Assets - The Company reviews for the impairment of long-lived assets annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment is measured as the amount by which the assets’ carrying value exceeds its fair value. No impairments to the Company’s long-lived assets were identified or recorded in the nine months ended June 30, 2015 or in the fiscal year ended September 30, 2014.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization of capitalized drilling and development costs of producing crude oil and natural gas properties, including related support equipment and facilities, are computed using the unit-of-production method on a field basis based on total estimated proved developed crude oil and natural gas reserves. Amortization of producing leaseholds is based on the unit-of-production method using total estimated proved reserves. In arriving at rates under the unit-of-production method, the quantities of recoverable crude oil and natural gas reserves are established based on estimates made by the Company’s internal geologists and engineers and external independent reserve engineers. Upon sale or retirement of properties, the cost and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss, if any, is recognized. Unit of production rates are revised whenever there is an indication of a need, but at least in conjunction with annual reserve reports. Revisions are accounted for prospectively as changes in accounting estimates.

Asset Retirement Obligations

The Company accounts for asset retirement obligations by recording the fair value of the estimated future cost of the Company’s plugging and abandonment obligations. The asset retirement obligation is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to oil and gas production and well operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, depletion, and amortization. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the asset retirement cost.

Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. As at June 30, 2015 and September 30, 2014, asset retirement obligations amount to $435,415 and $469,013, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the cost of abandonment and reclamation to be.

Foreign Currency Translation

The functional currency of the Canadian subsidiaries is the United States dollar. However, the Canadian subsidiaries transact in Canadian dollars. Consequently, monetary assets and liabilities are remeasured into United States dollars at the exchange rate on the balance sheet date and non-monetary items are remeasured at the rate of exchange in effect when the assets are acquired or obligations incurred. Revenues and expenses are remeasured at the average exchange rate prevailing during the period. Foreign currency transaction gains and losses are included in results of operations.

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Financial, Concentration and Credit Risk

The Company does not have any concentration or related financial credit risk related to cash as most of the Company’s funds are maintained in a financial institution which has its deposits fully guaranteed by the Government of Alberta.

The Company is not directly subject to credit risk resulting from the concentration of its crude oil sales. For the period ending June 30, 2015 and for the year ended September 30, 2014, the Company has recorded oil sales received from the operator of the Company’s producing properties. The Company’s joint venture partner is the operator of the Company’s producing properties and it is the Company’s joint venture partner who sells 100% of the Company’s oil production to one or more purchasers in the oil and gas industry. The Company does not require collateral and management periodically evaluates the operator’s financial statements and the collectability of oil sales receivables from the operator and believes that the Company’s oil sales receivables are fully collectable and that the risk of loss is minimal.

8

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Due to the uncertainty regarding the Company’s profitability, a valuation allowance has been recorded against the future tax benefits of its losses and no net benefit has been recorded in the consolidated financial statements.

Revenue Recognition

The Company is in the business of exploring for, developing, producing, and selling crude oil. Crude oil revenue is recognized when the product is taken from the storage tanks on the lease and delivered to the purchaser and title transfers to the purchaser. Payment is generally received one to three months after the sale has occurred.

Occasionally the Company may sell specific leases, and the gain or loss associated with these transactions will be shown separately from the profit or loss from the operations or sales of oil products. Such gain or losses will be measured and recognized when all of the following have occurred: (1) there is persuasive evidence of an arrangement to sell; (2) the price of the sale is fixed or determinable; (3) the title to the lease has transferred; and (4) collection is reasonably assured.

Advertising and Market Development

The Company expenses advertising and market development costs as incurred.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were 1,855,000 common stock equivalents excluded from the calculation because their effect would be antidilutive.

Financial Instruments

Financial instruments include cash and cash equivalents, accounts receivable, long term investments, investment in equity securities, accounts payable and accounts payable - related parties. The fair value of these financial instruments approximates their carrying value 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.

Environmental Requirements

At the report date, environmental requirements related to the oil properties acquired are unknown and therefore an estimate of any future cost cannot be made.

Share-Based Compensation

The Company accounts for stock options granted to directors, officers, employees and non-employees using the fair value method of accounting. The fair value of stock options for directors, officers and employees are calculated at the date of grant and is expensed over the vesting period of the options on a straight-line basis. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date at which the performance commitment is reached. The Company uses the Black-Scholes model to calculate the fair value of stock options issued, which requires certain assumptions to be made at the time the options are awarded, including the expected life of the option, the expected number of granted options that will vest and the expected future volatility of the stock. The Company reflects estimates of award forfeitures at the time of grant and revises in subsequent periods, if necessary, when forfeiture rates are expected to change.

9

Recently Adopted Accounting Standards

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company's financial statements.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing these consolidated financial statements.

Significant estimates by management include valuations of oil properties, valuation of accounts receivable, useful lives of long-lived assets, asset retirement obligations, valuation of share-based compensation, and the realizability of future income taxes.

3. OIL AND GAS PROPERTIES

The Company’s oil sands acreage as of June 30, 2015, covers 43,015 gross acres (34,096 net acres) on 68 sections of land under nine oil sands leases. Until the Company extends the leases “into perpetuity” based on the Alberta governmental regulations, the lease expiration dates of the Company’s nine oil sands leases are as follows:

1) 32 sections of land under 5 oil sands leases are set to expire on July 10, 2018;

2) 31 sections of land under 3 oil sands leases are set to expire on August 19, 2019; and

3) 5 sections of land under 1 oil sands lease are set expire on April 9, 2024. It is the Company’s opinion that the Company has already met the governmental requirements for this lease and it will be applying to continue this lease into perpetuity.

Effective September 25, 2014, the Company, through its subsidiary Deep Well Alberta, entered into a Purchase and Sale agreement with Classic Energy Inc. (“Classic”), pursuant to which the Company acquired Classic’s 20% working interest in five sections in one Sawn Lake oil sands lease where the Company already owned working interests. As of September 25, 2014, the Company increased its net acres in the Sawn Lake oil sands properties from 33,463 to 34,096 net acres.

Lease Rental Commitments

The Company has acquired interests in certain oil sands properties located in North Central Alberta, Canada. The terms include certain commitments related to oil sands properties that require the payments of rents as long as the leases are non-producing. As of June 30, 2015, the Company’s net payments due under this commitment are as follows:

	(Cdn $)
2015	$	12,074
2016	$	48,294
2017	$	48,294
2018	$	48,294
2019	$	29,478
Subsequent	$	22,400

The government of Alberta owns this land and the Company has acquired the rights to perform oil activities on these lands. If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its primary oil sands leases:

1) drill 68 wells throughout the 68 sections; or

2) drill 44 wells within the 68 sections and having acquired and processed two miles of seismic on each other undrilled section.

The Company plans to meet the second of these conditions. As at June 30, 2015 and September 30, 2014, the Company has an interest in ten wells, which can be counted towards these requirements.

10

The Company has identified two other wells drilled on these leases, which may be included in the satisfaction of this requirement. The Company has also acquired and processed 25 miles of seismic on the leases, which can be counted towards these requirements. Our joint venture partner and operator of the SAGD Project has also acquired additional seismic that can be used towards our MLE requirements.

The Company follows the successful efforts method of accounting for costs of oil properties. Under this method, only those exploration and development costs that relate directly to specific oil reserves are capitalized; costs that do not relate directly to specific reserves are charged to expense. Producing, non-producing and unproven properties are assessed annually, or more frequently as economic events indicate, for potential impairment.

This consists of comparing the carrying value of the asset with the asset’s expected future undiscounted cash flows without interest costs. Estimates of expected future cash flows represent management’s best estimate based on reasonable and supportable assumptions. Proven oil properties are reviewed for impairment on a field-by-field basis. No impairment losses were recognized for the period ended June 30, 2015 (September 30, 2014 - $nil).

Capitalized costs of proven oil properties will be depleted using the unit-of-production method when the property is placed in production.

Substantially all of the Company’s oil activities are conducted jointly with others. The accounts reflect only the Company’s proportionate interest in such activities.

Farmout Agreement

On July 31, 2013, the Company entered into a Farmout agreement (the “Farmout Agreement”) with an additional joint venture partner (the “Farmee”) to fund the Company’s share of the Alberta Energy Regulator (“AER”) approved SAGD Project at the Company’s Sawn Lake heavy oil reservoir in North Central Alberta, Canada. In accordance with the Farmout Agreement the Farmee has agreed to provide up to $40,000,000 in funding for the Company’s portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where the Company had a working interest of 50% (before the execution of the Farmout Agreement). The Farmee will also provide funding to cover monthly operating expenses of the Company, of which the first such monthly payment began in respect of the month of August 2013 and shall not to exceed $30,000 per month. In addition, until December 31, 2015, as amended on November 17, 2014, the Farmee has the option to elect to obtain a working interest of 45% to 50% working interest in the remaining 56 sections of land where the Company has working interests ranging from 90% to 100%, by committing an additional $110,000,000 of financing to the development of the Company’s Sawn Lake oil sands properties. As of June 30, 2015, the Farmee has not exercised this option.

Acquisition of Royalty Interests

On March 18, 2014 and June 27, 2014, the Company, through its 100% wholly owned subsidiary company Northern Alberta Oil Ltd., entered into and subsequently closed two Acquisition of Royalty Interest Agreements and General Indenture of Conveyance, Assignment and Transfer Agreements (collectively the “Agreements”), with the Company’s joint venture partner (“JV Partner”) and one related party (Mr. Malik Youyou), whereby the Company acquired and cancelled 5.5% of a disputed 6.5% overriding royalty claim (the “Purported 6.5% Royalty”) potentially on some lands owned by the Company. The Company’s counsel and vendor’s counsel negotiated the terms and conditions of both the “Acquisition of Royalty Interest” and “General Indenture of Conveyance, Assignment and Transfer” agreements. Although the Company does not confirm the validity of the Purported 6.5% Royalty, the Company determined that it was in the best interests of its shareholders to come to an arrangement to acquire and cancel most of the Purported 6.5% Royalty to prevent a potential encumbrance over its land or the possibility of future litigation resulting from these alleged royalty claims. Pursuant to the terms and conditions of the Agreements to acquire the purported overriding royalty interest claims, the Company paid the following consideration:

(i) US $2,435,124 (Cdn $2,697,600) was paid to the JV Partner for the purchase and transfer of an undivided 3% interest out of the Purported 6.5% Royalty. The consideration paid was the original cost (in Canadian dollars) that the JV Partner paid to acquire its 3% interest in the Purported 6.5% Royalty.

(ii) US $1,007,000 was paid to Mr. Malik Youyou, who is a director and majority shareholder of the Company, for the purchase and transfer of an undivided 2.5% interest out of the Purported 6.5% Royalty. The consideration paid was for the reimbursement of the original cost (in US dollars) that Mr. Youyou paid to acquire this 2.5% interest in the Purported 6.5% Royalty from an arm’s length third party.

11

4. CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES

The Company accounts for the cost of its oil sands projects and continues to capitalize project costs after the completion of drilling, equipping and facility construction as long as sufficient progress is being made in assessing the oil sands reserves to justify the oil sands project as a producing well.

For the period ended June 30, 2015, the Company’s management determined that sufficient progress has been made in assessing its oil sands reserves for continued capitalization of exploratory drilling, equipping and facility 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, economic studies, and AER approved thermal recovery projects; including the Company’s now producing SAGD Project, 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.

For the Company’s oil sands projects, exploratory drilling, equipping and facility costs are capitalized on the balance sheet under “Oil and Gas Properties” line item, pending a determination of whether potentially economic oil sands reserves have been discovered by the drilling effort to justify oil sands project as a producing well. The Company periodically assesses the exploration drilling, equipping and facility capitalized costs for impairment and once a determination is made that a well is of no potential economic value, the costs related to that oil sands project are expensed as dry hole and reported in exploration expense. No impairments to the Company’s long-lived assets were identified or recorded in the nine months ended June 30, 2015 or in the fiscal year ended September 30, 2014.

The following table illustrates capitalized costs relating to oil producing activities as of June 30, 2015 and September 30, 2014:

	June 30, 2015			September 30, 2014
Unproved Oil and Gas Properties	$	19,671,471		$	19,651,296
Proved Oil and Gas Properties		4,568			4,568
Accumulated Depreciation and Depletion		(62,614	)		(51,814	)
Net Capitalized Cost	$	19,613,425		$	19,604,050

Depreciation and depletion expense for the nine months ended June 30, 2015 and 2014 was $10,800 and $7,178, respectively.

5. EXPLORATION ACTIVITIES

The following table presents information regarding the Company’s costs incurred in the oil property acquisition, exploration and development activities for the nine months ended June 30, 2015 and 2014:

	June 30, 2015		June 30, 2014
Acquisition of Properties:
Proved	$	–	$	–
Unproved		20,175		3,660,626
Exploration costs		27,356		21,813
Development costs		–		–

6. INVESTMENT IN EQUITY SECURITIES

On February 25, 2005, the Company acquired an interest in Signet Energy Inc. (“Signet” formerly Surge Global Energy, Inc.) as a result of a Farmout Agreement dated February 25, 2005. Signet amalgamated with Andora Energy Corporation (“Andora”) in 2007.

As of November 19, 2008, the Company converted its Signet shares into 2,241,558 shares of Andora, which represents an equity interest in Andora of approximately 2.24% as of December 31, 2014, which is Andora’s fiscal year end. These shares are carried at a nominal value using the cost method and their value is included under oil and gas properties on the Company’s balance sheet.

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7. PROPERTY AND EQUIPMENT

	June 30, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,197	$	31,723	$	474
Office furniture and equipment		34,130		28,055		6,075
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		151,764		18,816
Vehicles		38,077		33,861		4,216
Oilfield equipment		249,046		152,133		96,913
Road mats		364,614		324,245		40,369
Wellhead		3,254		2,278		976
Tanks		96,085		46,227		49,858
	$	998,745	$	781,048	$	217,697

	September 30, 2014
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,198	$	31,264	$	934
Office furniture and equipment		34,130		26,880		7,250
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		146,211		24,369
Vehicles		38,077		32,637		5,440
Oilfield equipment		249,045		135,030		114,015
Road mats		364,614		312,525		52,089
Wellhead		3,254		2,053		1,201
Tanks		96,085		42,185		53,900
	$	998,745	$	739,547	$	259,198

There was $41,501 of depreciation expense for the period ended June 30, 2015 (June 30, 2014 - $54,361).

8. LONG TERM INVESTMENTS

Long term investments consist of cash held in trust by the AER which bears interest at a rate of prime minus 0.375% and has no stated date of maturity. These investments are required by the AER 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 PARTIES

Accounts payable – related parties was $7,101 as of June 30, 2015 (September 30, 2014 - $16,977) for expenses to be reimbursed to directors. This amount is unsecured, non-interest bearing, and has no fixed terms of repayment.

As of June 30, 2015, officers, directors, their families, and their controlled entities have acquired 53.63% of the Company’s outstanding common capital stock. This percentage does not include unexercised warrants or stock options.

The Company incurred expenses $112,590 to one related party, Concorde Consulting, an entity controlled by a director, for professional fees and consulting services provided to the Company during the period ended June 30, 2015 (June 30, 2014 - $124,997). These amounts were fully paid as of June 30, 2015.

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10. ASSET RETIREMENT OBLIGATIONS

The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At June 30, 2015, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $622,593 (September 30, 2014 - $ 689,445). The fair value of the liability at June 30, 2015 is estimated to be $435,415 (September 30, 2014 - $ 469,013) 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.

Changes to the asset retirement obligation were as follows:

	June 30, 2015			September 30, 2014
Balance, beginning of period	$	469,013		$	446,155
Liabilities incurred		–			73,395
Effect of foreign exchange		(45,837	)		(64,079	)
Disposal		–			(4,045	)
Accretion expense		12,239			17,587
Balance, end of period	$	435,415		$	469,013

11. COMMON STOCK

As of June 30, 2015, the Company had outstanding approximately 229,374,605 shares of common stock.

Warrants

On June 23, 2014, 47,618 common share purchase warrants were transferred to a non-related party. 

On October 3, 2014, a warrant holder of the Company acquired 47,618 shares of the Company’s common stock, upon exercising warrants, at an exercise price of $0.105 per share of common stock for gross proceeds to the Company of $5,000.

The following table summarizes the Company’s warrants outstanding as of June 30, 2015:

	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 June 30, 2015		71,857,141		0.40		0.105		71,857,141		0.105
$0.075 at June 30, 2015		520,000		0.98		0.075		520,000		0.075
		72,377,141		0.40		0.105		72,377,141		0.105

The following is a summary of warrant activity for the period ended June 30, 2015:

	Number of Warrants		Weighted Average Exercise Price		Intrinsic Value
Balance, September 30, 2014		72,424,759	$	0.105	$	0.215
Cancelled		–		–		–
Granted		–		–		–
Exercised		47,618		0.105		–
Balance, June 30, 2015		72,377,141	$	0.105	$	–
Outstanding Warrants, June 30, 2015		72,377,141	$	0.105	$	–
Exercisable Warrants, June 30, 2015		72,377,141	$	0.105	$	–

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There were 72,377,141 warrants outstanding as of June 30, 2015 (September 30, 2014 – 72,424,759), which have a historical fair market value of $1,738,336 (September 30, 2014 - $1,738,336).

Measurement Uncertainty for Warrants

The Company used the Black-Scholes option 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. The stock options that are granted to employees and directors and the warrants attached to the units issued by the Company are non-transferable and some vest over time, and all 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:

Expected Term – Expected term of 5 years represents the period that the Company’s stock-based awards are expected to be outstanding.

Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used ranged from 96% to 116%.

Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future.

Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used ranged from 0.62% to 1.31%.

12. STOCK OPTIONS

On November 28, 2005, and as amended on December 4, 2014, the Board of Deep Well adopted the Deep Well Oil & Gas, Inc. Stock Option Plan (the “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.

The maximum number of shares, which may be reserved for issuance under the Plan, may not exceed 10% of the Company’s issued and outstanding Common Shares, subject to adjustment as contemplated by the Plan. The aggregate number of Common Shares with respect to which options may be vested to any one person (together with their associates) under the plan, together with all other incentive plans of the Company in any one year shall not exceed 2% of the total number of Common Shares outstanding, and in total may not exceed 6% of the total number of Common Shares outstanding.

Prior to October 1, 2013, the Company had a total of 4,350,000 options outstanding, that were previously granted to directors, consultants and an employee of the Company on March 23, 2011 and June 20, 2013, to purchase up to 3,450,000 and 900,000 shares, respectively, each of common stock at exercise prices ranging from $0.14 to $0.05, respectively, of which a total of 950,000 options granted on June 20, 2013 remain unvested.

On October 28, 2013, the Company granted a contractor 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 Farmout Agreement dated July 31, 2013.

On December 4, 2013, the Company appointed a new director to its Board and in connection with the appointment the Company granted the new director an option to purchase 450,000 shares each of common stock at an exercise price of $0.34 per Common Share, 150,000 vesting immediately and the remaining vesting one-third on December 4, 2014, and one-third on December 4, 2015, with a five-year life.

On September 19, 2014, the Company granted seven of its directors options to purchase 600,000 shares each of common stock at an exercise price of $0.38 per Common Share, 200,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.

On September 19, 2014, the Company granted two consultants an option to purchase each 1,200,000 shares each of common stock at an exercise price of $0.38 per Common Share, 600,000 vesting immediately and remaining vesting on September 19, 2015.

On September 19, 2014, the Company granted one employee an option to purchase 180,000 shares each of common stock at an exercise price of $0.38 per Common Share, 60,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.

On November 17, 2014, the Company appointed a new director to its Board and in connection with the appointment the Company granted the new director an option to purchase 600,000 shares each of common stock at an exercise price of $0.23 per Common Share, 200,000 vesting immediately and the remaining vesting one-third on November 17, 2015, and one-third on November 17, 2016, with a five-year life.

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For the period ended June 30, 2015, the Company recorded share based compensation expense related to stock options in the amount of $865,756 (June 30, 2014 – $239,480) on the stock options that were previously granted. As of June 30, 2015, there was remaining unrecognized compensation cost of $491,074 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 June 30, 2015		900,000		0.73	$	0.14		900,000	$	0.14
$0.05 at June 30, 2015		3,450,000		2.98		0.05		3,450,000		0.05
$0.30 at June 30, 2015		250,000		3.33		0.30		250,000		0.30
$0.34 at June 30, 2015		450,000		3.43		0.34		300,000		0.34
$0.38 at June 30, 2015		6,780,000		4.22		0.38		2,660,000		0.38
$0.23 at June 30, 2015		600,000		4.39		0.23		200,000		0.23
		12,430,000		3.59	$	0.26		7,760,000	$	0.20

The aggregate intrinsic value of exercisable options as of June 30, 2015, was $Nil (September 30, 2014 - $0.11).

The following is a summary of stock option activity as at June 30, 2015:

	Number of Underlying Shares		Weighted Average Exercise Price		Weighted Average Fair Market Value
Balance, September 30, 2014		11,830,000	$	0.26	$	0.21
Balance, June 30, 2015		12,430,000	$	0.26	$	0.21
Exercisable, June 30, 2015		7,760,000	$	0.20	$	0.16

A summary of the options granted at June 30, 2015 and September 30, 2014 and changes during the periods then ended is presented below:

	June 30, 2015				September 30, 2014
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding balance at beginning of period		11,830,000	$	0.26		900,000	$	0.14
						3,450,000		0.05
Granted- October 28, 2013						250,000		0.30
Granted- December 4, 2013						450,000		0.34
Granted- September 19, 2014						6,780,000		0.38
Granted- November 17, 2014		600,000		0.38
Vested- November 17, 2014		200,000		0.38
Vested- December 4, 2014		150,000		0.34
Vested- June 20, 2015		950,000		0.05
Outstanding at end of period		12,430,000	$	0.26		11,830,000	$	0.26
Exercisable		7,760,000		0.20		6,460,000		0.21

There were 4,670,000 unvested stock options outstanding as of June 30, 2015 (September 30, 2014 – 5,370,000).

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Measurement Uncertainty for Stock Options

The Company used the Black-Scholes option 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. The stock options that are granted to employees and directors and the warrants attached to the units issued by the Company are non-transferable and some vest over time, and all 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:

Expected Term – Expected term of 5 years represents the period that the Company’s stock-based awards are expected to be outstanding.

Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used ranged from 96% to 122%.

Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future.

Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used ranged from 0.62% to 1.83%.

13. CHANGES IN NON-CASH WORKING CAPITAL

	Nine Months Ended			Nine Months Ended
	June 30, 2015			June 30, 2014
Accounts receivable	$	823,334			(471,814	)
Prepaid expenses		(5,582	)		123,548
Accounts payable		(541,280	)		(245,530	)
	$	276,472			(593,796	)

14. COMMITMENTS

Compensation to Directors

Since the acquisition of Northern Alberta Oil Ltd., the Company and Northern have entered into the following contracts with the following companies for the services of their officers:

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 per month. On July 1, 2005, the Company entered 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 amend (the “Amending Agreement”) the Prior Agreement whereby the following was settled and amended:

i.	Effective date of the Amending Agreement will be June 20, 2013;
ii.	Term of Agreement will be until December 31, 2014;
iii.	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, which was the market price at that time. One half of these shares were vested immediately and the remaining one half vested on June 20, 2014;
iv.	The Consultant received:

a.	Cdn $70,000, and
b.	850,000 units of the Company’s shares and warrants at a price of $0.05 per unit, which was the market price at the time. 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.

As consideration for the execution of the Amending Agreement and the Termination of parts of the Prior Agreement, and waiving Cdn $239,528 accrued by the Company as owing to Portwest.

In the June 30, 2015 quarter end period, no fees were owed or paid to Portwest. As of September 30, 2013, the Company had settled all outstanding amounts owed to Portwest.

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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 per month. As of June 30, 2015, the Company did not owe Concorde Consulting any of this amount.

Rental Agreement

See Note 17 subsequent events.

15. LEGAL ACTIONS

IGM Resources Corp vs. Deep Well Oil & Gas, Inc., et al – DISMISSED

On February 11, 2014, the Court dismissed, without any costs to the Company, the Plaintiff’s claims against Deep Well Oil & Gas, Inc. and its subsidiary Northern Alberta Oil Ltd.

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

The Plaintiff was a minority shareholder of 979708 Alberta Ltd. ("979708"). 979708 was in the business of discovering, assembling and acquiring oil and gas prospects. In 2002 and 2003, 979708 acquired oil and gas prospects in the Sawn Lake area of Alberta. On or about the 14^th of July, 2003, all or substantially all the assets of 979708 were sold to Classic Energy Inc. The Plaintiff claims the value of the assets sold was far in excess of the value paid for those assets. On April 23, 2004, Northern purchased Classic Energy Inc.'s assets, some of which are under dispute by the Plaintiff. 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 in which the Plaintiff is claiming an interest.

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

16. CRUDE OIL AND NATURAL GAS PROPERTY INFORMATION

Results of Operations from Oil and Gas Producing Activities

The following table sets forth the results of the Company’s operations from oil producing activities from the Company’s Sawn Lake oil sands properties located in Alberta, Canada, for the periods ending June 30, 2015 and 2014 and for the year ended September 30, 2014:

	June 30, 2015			June 30, 2014		September 30, 2014
Oil sales after royalties	$	425,635		$	–	$	47,116
Production (Operating) expenses		(425,635	)		–		(47,115	)
Exploration expenses		(27,356	)		–		(47,182	)
Depreciation, accretion and depletion		(62,907	)		–		(97,646	)
Oil sales less expenses		(90,263	)		–		(144,827	)
Income tax expenses		–			–		–
Results of operations from producing activities	$	(90,263	)	$	–	$	(144,827	)

For the periods ending June 30, 2015 and June 30, 2014, the Company booked oil revenue in the amount of $425,635 and $Nil, respectively, after deduction of royalties. For the periods ending June 30, 2015 and June 30, 2014, the volumes of oil delivered were booked to be 17,043 and Nil barrels, respectively, net to the Company, before royalties, with an average oil sales price of $26.35 per barrel for the period ending June 30, 2015. Operating expenses are zero since at this time they were paid for under the Farmout Agreement. Transportation costs are included in these operating costs. The total share of the material costs and operating expenses of the Company’s joint SAGD Project, has been funded in accordance with the Farmout Agreement, at a net cost to the Company of $Nil. As required by the Farmout Agreement, the Farmee has since paid Cdn $22.8 million to the operator of the SAGD Project for the Farmee’s share and the Company’s share of the capital costs and start-up operating expenses of the SAGD Project up to June 30, 2015. These costs include the capital costs of the drilling of the SAGD well pair; the purchase and transportation of equipment; installation and construction of the steam plant facility; testing and commissioning; the purchase of the water source and disposal wells and expenditures to connect these water wells with pipelines to the steam plant facility along with a fuel source tie-in pipeline; emulsion treatment package; Phase 2 front end costs; and the start-up operating expenses associated with the steaming and production of the SAGD well pair up to June 30, 2015.

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Steam Assisted Gravity Drainage Demonstration Project

On July 30, 2013, the Company entered into a Steam Assisted Gravity Drainage Demonstration project (“SAGD Project”) to jointly participate in an AER approved SAGD Project on one section of land where the Company now has a 25% working interest (after the execution of the Farmout Agreement as defined below). The SAGD Project is located on section 30-91-12W5 of the Company’s Peace River oil sands properties located in North Central Alberta, Canada (also known as the Sawn Lake heavy oil reservoir). On August 15, 2013, and in accordance with the SAGD Project Agreement and the Amendment, the Company served notice (“Notice of Election”) to of the operator of the Company’s election to participate in the SAGD Project. Upon signing the Notice of Election the Company was required to pay in full the cash calls for the Company’s initial share of the capital costs of the SAGD Project and in accordance with a Farmout Agreement dated July 31, 2013 the Company has since paid all cash calls in full to the operator of the SAGD Project.

SAGD Project Phase 1 - The SAGD Project started with the first phase (“Phase 1”) consisting of the drilling and completion of one SAGD well pair, the construction of a facility for steam generation, water handling and oil treating, plus water source and disposal facilities, and pipelines to connect the source wells and fuel tie-in to the SAGD facility. This first phase included start-up steam operations of the SAGD facility with production commencing on September 16, 2014. The estimated capital costs to complete the SAGD Project steam plant facility with one SAGD well pair has been estimated by the operator to be Cdn $32.8 million on a 100% working interest basis, of which the Company’s share is covered under the Farmout Agreement (this estimate does not include start-up operating expenses to produce bitumen from the first SAGD well pair).

SAGD Project Phase 2 - The Phase 2 front end work includes preliminary engineering design, regulatory approval, environmental approval work and determining regulatory requirements sufficient to define the work program, schedule and estimated cost of this second phase which is anticipated to include the drilling of two additional SAGD well pairs and the associated expansion of the current SAGD steam plant.

Capitalized Costs Relating Specifically to the SAGD Project

The Company entered into a Farmout Agreement dated July 31, 2013, whereby the Company’s operating costs of the SAGD Project are paid in full by the Farmee in accordance with the Farmout Agreement; therefore the Company has not capitalized any of the capital costs and operating expenses paid by the Farmee to the operator of the SAGD Project. See Note 4 herein “Capitalization of Costs Incurred in Oil and Gas Activities”.

Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development

See Note 5 herein “Exploration Activities”.

17. Subsequent events

On July 27, 2015, the Company renewed its Edmonton office lease commencing effective on July 1, 2015 and expiring on June 30, 2017. The quarterly payments due in Cdn dollars are as follows:

2015 Q4 (July - September)	7,969
2016 Q1 (October - December)	7,969
2016 Q2 (January - March)	7,969
2016 Q3 (April - June)	7,969
2016 Q4 (July - September)	7,969
2017 Q1 (October - December)	7,969
2017 Q2 (January - March)	7,969
2017 Q3 (April - June)	7,969

On July 28, 2015, the Company’s Board approved the extension of the expiration date of some warrants to purchase shares of the Company’s common stock. The exercise price of the warrants remained unchanged at $0.105 per share. As a result of this extension, the expiration dates of the warrants were amended from the original expiry date of November 23, 2015 to November 23, 2016, with all other terms of the original warrants remaining in full force and effect. In consideration of extending the expiry date of this series of warrants, the number of outstanding warrants was reduced from 71,857,141 to 52,155,221 common share purchase warrants.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes. For the purpose of this discussion, unless the context indicates another meaning, the terms: “Deep Well,” “Company,” “we,” “us,” and “our” refer to Deep Well Oil & Gas, Inc. and its subsidiaries. This discussion includes forward-looking statements that reflect our current views with respect to future events and financial performance that involve risks and uncertainties. Our actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of certain factors including risks discussed in the “Cautionary Note Regarding Forward-Looking Statements” below and elsewhere in this report, and under the heading “Risk Factors” and “Environmental Laws and Regulations” disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2014, filed with the Securities and Exchange Commission on January 13, 2015.

Our consolidated financial statements and the supplemental information thereto are reported in United States dollars and are prepared based upon United States generally accepted accounting principles (“US GAAP”). References in this quarterly report on Form 10-Q to “$” are to United States dollars and references to “Cdn$” are to Canadian dollars. On August 11, 2015, the noon rate of exchange for Canadian dollars expressed in US$ was Cdn$1.00 = US$0.7606 as reported by the Bank of Canada. The following table sets forth the rates of exchange for the Cdn$, expressed in US dollars, in effect at the end of the following period and the average noon rate of exchange during such period, based on the noon rates of exchange for such periods as reported by the Bank of Canada.

Period Ending June 30	2015		2014
Rate at end of the period		0.8017		0.9367
Average rate for the three month period		0.8132		0.9170

General Overview

Deep Well Oil & Gas, Inc., along with its subsidiaries through which it conducts business, is an emerging independent junior oil and gas exploration and development company headquartered in Edmonton, Alberta, Canada. Our immediate corporate focus is to develop the existing land base where we have working interests ranging from 25 % to 100% in the Peace River oil sands area in Alberta, Canada. Our principal office is located at suite 700, 10150 - 100 Street, Edmonton, Alberta, Canada T5J 0P6, our telephone number is (780) 409-8144, and our fax number is (780) 409-8146. Deep Well Oil & Gas, Inc. is a Nevada corporation and trades on the OTCQB Venture Marketplace under the symbol DWOG. The OTCQB Venture Marketplace requires companies to be fully compliant in their filing requirements under the U.S. Securities and Exchange Act and must meet eligibility standards to trade on OTCQB, which include, but are not limited to, the submission of an annual verification and management certification confirming that the listed company is current in its reporting requirements. We maintain a website at www.deepwelloil.com or www.DWOG.com. The contents of our website are not part of the quarterly report on Form 10-Q.

Results of Operations

Since the inception of our current business plan, our operations have consisted of various exploration and start-up activities relating to our properties, including the acquisition of lease holdings, raising capital, locating joint venture partners, acquiring and analyzing seismic data, complying with environmental regulations, providing project management, drilling, testing and analyzing of wells to define our oil sands reservoir, and development planning of our Alberta Energy Regulatory (“AER”) approved thermal recovery projects. In July 2013, we entered into a Steam Assisted Gravity Drainage Demonstration project (“SAGD Project”) to jointly participate in an Alberta Energy Regulator (“AER”) approved SAGD Project, where we have a 25% working interest, which began producing oil on September 16, 2014. The following table sets forth certain financial information:

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	June 30, 2015			June 30, 2014			June 30, 2015			June 30, 2014
Revenue	$	219,346		$	–		$	449,147		$	–
Provincial Royalty expenses		(11,127	)		–			(23,512	)		–
Revenue, net of royalty		208,219			–			425,635			–
Expenses
Operating expenses		425,684			–			1,540,206			–
Operating expenses covered by Farmout (Note 3)		(217,465	)		–			(1,114,571	)		–
General and administrative		61,297			14,251			568,447			622,765
Share based compensation		275,719			40,780			865,756			239,480
Depreciation, accretion and depletion		21,721			25,790			64,541			74,315
Net loss from operations		(358,737	)		(80,821	)		(1,498,744	)		(936,560	)
Other income and expenses
Rental and other income		3,432			4,347			10,635			15,813
Interest income		1,081			2,091			3,778			9,009
Loss on disposal of assets		–			387			–			387
Net loss and comprehensive loss	$	(354,224	)	$	(73,996	)	$	(1,484,331	)	$	(911,351	)

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Oil sales terminal at our joint SAGD Project

First production of oil in the form of bitumen began on September 16, 2014. For the three month period ending June 30, 2015, we booked oil revenue in the amount of $219,346 before deduction of royalties. For the three month period ending June 30, 2015, the volumes of oil delivered were booked to be 6,892 barrels net to our Company, before royalties, with an average oil sales price of $31.83 per barrel (Cdn$39.14 per barrel). For the nine month period ending June 30, 2015, we booked oil revenue in the amount of $449,147 before deduction of royalties. For the nine month period ending June 30, 2015, the volumes of oil delivered were booked to be 17,043 barrels net to our Company, before royalties, with an average oil sales price of $26.35 per barrel (Cdn$31.60 per barrel). The realized sales price of our oil is discounted for diluent, trucking, pipeline and additional treating costs from the West Texas Intermediate (“WTI”) benchmark price, but paid in Canadian dollars. While oil prices have remained low, the Canadian dollar has weakened and offset much of this impact. In addition, our fuel gas costs to operate our SAGD Project steam facility plant have declined similarly to the decline in the WTI benchmark price. Our net operating margin after operating expenses is zero since at this time any negative operating margins are paid for under the farmout agreement we entered into on July 31, 2013 (the “Farmout Agreement”) to fund our share of the SAGD Project. Transportation costs are included in these operating costs. Therefore, the total share of the capital costs and operating expenses of our Company’s joint SAGD Project, has been funded in accordance with the Farmout Agreement, at a net cost to our Company of $Nil. As required by the Farmout Agreement, the Farmee (as defined below) has since paid Cdn$22.8 million to the operator of the SAGD Project for the Farmee’s share and our share of the capital costs and start-up operating expenses of the SAGD Project up to June 30, 2015. These costs included the drilling of the SAGD well pair; the purchase and transportation of equipment; installation and construction of the steam plant facility; testing and commissioning; the purchase of the water source and disposal wells and expenditures to connect these water wells with pipelines to the steam plant facility along with a fuel source tie-in pipeline; emulsion treatment package; Phase 2 front end costs; and the start-up operating expenses associated with the steaming and production of the SAGD well pair up to June 30, 2015.

For the three months ended June 30, 2015, our general and administrative expenses increased by $281,985 compared to the three months ended June 30, 2014, which was primarily due to (i) an increase of $234,939 in non-cash share based compensation charged to expense, which was mainly due to vested stock options we granted in 2014 to our directors and contractors; and (ii) an increase of foreign exchange loss of $51,253. We also received $90,000 during this quarter from one of our joint venture partners in accordance with a Farmout Agreement to offset some of our monthly operational expenses. After adjusting for the non-cash items listed above, our general and administrative expenses were $179,743 for the three months ended June 30, 2015 compared to $184,231 for the three months ended June 30, 2014.

For the nine months ended June 30, 2015, our general and administrative expenses increased by $571,958 compared to the nine months ended June 30, 2014, which was primarily due to (i) an increase of $626,276 in non-cash share based compensation charged to expense, which was mainly due to vested stock options we granted in 2014 to our directors and contractors as described above; (ii) an increase of foreign exchange loss of $49,600; and (iii) an increase in engineering fees of $25,267. These increases in our general and administrative expenses were offset by (i) a decrease in legal fees of $64,174; and (ii) a decrease of general office expenses. We also received $270,000 during the last nine months from one of our joint venture partners in accordance with the Farmout Agreement, to offset some of our monthly operational expenses. After adjusting for the non-cash items listed above, our general and administrative expenses were $671,760 for the nine months ended June 30, 2015 compared to $774,366 for the nine months ended June 30, 2014.

For the three months ended June 30, 2015, our depreciation, depletion, and accretion expense decreased by $4,069 compared to the three months ended June 30, 2014, 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 quarter ended June 30, 2015.

For the nine months ended June 30, 2015, our depreciation and accretion expense decreased by $9,774 compared to the nine months ended June 30, 2014, 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 depreciable asset purchases were made in the quarter ended June 30, 2015.

For the three months ended June 30, 2015, there were no significant increases or decreases for rental and other income compared to the three months ended June 30, 2014.

For the nine months ended June 30, 2015, rental and other income decreased by $5,178 compared to the nine months ended June 30, 2014.

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For the three months ended June 30, 2015, interest income decreased by $1,010 compared to the three months ended June 30, 2014.

For the nine months ended June 30, 2015, interest income decreased by $5,231 compared to the nine months ended June 30, 2014.

As a result of the above transactions, we recorded an increase of $280,228 in our net loss and comprehensive loss from operations for the three months ended June 30, 2015 compared to the three months ended June 30, 2014. As discussed above, this increase was primarily due to an increase in non-cash share based compensation expenses and foreign exchange losses.

As a result of the above transactions, we recorded an increase of $572,980 in our net loss and comprehensive loss from operations for the nine months ended June 30, 2015 compared to the nine months ended June 30, 2014. As discussed above, this increase was primarily due to an increase in non-cash share based compensation expenses and foreign exchange losses.

Operations

As previously disclosed, we entered into the Farmout Agreement with our new joint venture partner (the “Farmee”), to fund our share of the SAGD Project. The SAGD Project is located on our Sawn Lake properties in the Peace River oil sands region of Alberta. In accordance with the Farmout Agreement, the Farmee has agreed to provide up to $40,000,000 for the funding of our portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where we had a working interest of 50% before the execution of the Farmout Agreement. Also, the Farmee is required to provide funding to cover our monthly operating expenses not to exceed $30,000 per month. In addition, as amended on November 17, 2014, the Farmee has the option to elect, prior to December 31, 2015, to obtain additional working interests ranging from 45% to 50% in the remaining 56 sections of land where we have working interests ranging from 90% to 100%, by committing an additional $110,000,000 of financing for the development of our Sawn Lake oil sands properties.

The first oil production from our joint SAGD Project commenced on September 16, 2014 from the first SAGD well pair. The SAGD well pair was drilled to a vertical depth of approximately 650 meters with a horizontal length of 780 meters each. Steam injection began in May 2014 and circulated for up to four months with production commencing in mid-September 2014 from the Bluesky oil sands reservoir. The start of our bitumen sales averaged 221 barrels per day, half way through the 3rd thirty day period since the start-up of production in September of 2014. Production from our joint SAGD Project has since increased significantly. For the month of June 2015, bitumen sales averaged 385 barrels per day, with a Steam Oil Ratio (“SOR”) of 4.54. A single daily production peak was achieved in June of 2015 at 443 barrels per day. All of these production numbers are on a 100% basis with our Company owning a 25% working interest. Production from the SAGD Project is continuing to slowly ramp up and the steam chamber has not yet reached the top of the Bluesky reservoir. Bitumen production on a 100% basis averaged 399 barrels per day (100 barrels per day net to us) in July 2015 with a SOR of 4.4. Based on the operator's forecasts, the steam chamber is expected to reach the top of the Bluesky reservoir by the end of September 2015 and maximum oil production is now expected to be reached by the end of November of 2015.  

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The objective of this initial SAGD well pair was to establish that this thermal technology is effective in producing oil from the Bluesky reservoir formation and to provide valuable productivity information about the reservoir. Results to date indicate that the use of SAGD technology is successful in producing oil in the form of bitumen from the Bluesky reservoir. Based on 100% working interest (we have 25%), for the months of January, February and March of 2015, monthly gross oil sales averaged 252, 294 and 319 barrels of oil per day, respectively. In April the operator had to shut down production operations of the SAGD well pair to repair the electrical submersible pump, and as a result of this temporary shut-in the SAGD well pair only produced for two weeks in the month averaging 125 barrels of oil per day for the month of April (on a 100% basis). Production for the SAGD well pair resumed on May 1, 2015. Based on 100% working interest (we have 25%), for the months of May and June of 2015, monthly gross oil sales averaged 381 and 385 barrels of oil per day, respectively. These early stage production numbers along with the corresponding steam oil ratios compare favorably to analogous reservoirs in thermal recovery projects operated by other companies of similar reservoir types that we (and the operator of our joint SAGD Project) are monitoring and using as a basis of comparison. The capital costs to complete the SAGD Project steam plant facility with one SAGD well will have been Cdn$36 million on a 100% working interest basis for Phase 1 and the front end costs of Phase 2 (this estimate does not include operating expenses to produce bitumen from the SAGD well pair), of which our share is covered under the Farmout Agreement.

The drilling of an additional SAGD well pair and the associated expansion of the current SAGD plant facility has been deferred due to the decline in oil prices. However, the operator of the SAGD Project has proceeded with the permitting and approvals for additional well pairs in addition to the Phase 2 front-end work (purchasing of long lead items such as pipe), which includes work on preliminary engineering design, regulatory approvals, environmental approval work and determining regulatory requirements sufficient to define the work program.

On March 18, 2014 and June 27, 2014, through our subsidiary company, Northern Alberta Oil Ltd. (“Northern”), we acquired from one of our joint venture partners (“JV Partner”) and one related party (Mr. Malik Youyou), and subsequently cancelled, 5.5% of a disputed 6.5% overriding royalty claim (the “Purported 6.5% Royalty”) on some lands owned by us. Pursuant to the terms and conditions of the agreements to acquire the purported overriding royalty interest claims, we paid the following consideration:

(i) $2,435,124 to our JV Partner for the purchase and transfer of an undivided 3% interest out of the Purported 6.5% Royalty. The consideration paid was the original cost (in Canadian dollars) that our JV Partner paid to acquire its 3% interest in the Purported 6.5% Royalty.

(ii) $1,007,000 to Mr. Malik Youyou, who is a director and majority shareholder of our Company, for the purchase and transfer of an undivided 2.5% interest out of the Purported 6.5% Royalty. The consideration paid was for the reimbursement of the original cost (in US dollars) that Mr. Youyou paid to acquire this 2.5% interest in the Purported 6.5% Royalty from an arm’s length third party.

Although we continue to deny the validity of the Purported 6.5% Royalty, we determined that it was in the best interests of our shareholders to come to an arrangement to acquire and cancel what we could of the Purported 6.5% Royalty to prevent a potential encumbrance over our land or the possibility of future litigation resulting from this alleged royalty claim.

In August 2013, we received approval from the AER for our horizontal cyclic steam stimulation project (“HCSS Project”) application. It is anticipated that we will develop a thermal demonstration project on our properties followed by a commercial expansion project on one half section of land located on section 10-92-13W5 of our Sawn Lake oil sands properties where we currently have a 90% working interest. This application, submitted in early 2012, was an application 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 cyclic steam stimulation (“CSS”) well earlier approved, into a thermal recovery project to test two wells that use a horizontal application of CSS. Now that preliminary and several months of production testing data from our joint SAGD project is available to us, we intend to use that information to start on the front end engineering of our HCSS Project where we plan to drill two horizontal wells to test the use of HCSS technology. As we continue to receive further production performance data from the operator we intend to further refine our HCSS Project development plan. We are currently in the process of scouting out and surveying our plans for our proposed thermal project site on the north half of section 10-92-13W5, along with preforming an environmental field assessment report for our project site location to acquire the mineral surface license for the proposed drilling of two horizontal wells.

Currently, we have a 90% working interest in 51 sections on six oil sands leases and a 100% working interest in five 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 25% working interest in another 12 sections on two oil sands leases in the Peace River oil sands area of Alberta. These nine oil sands leases are contiguous and 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 could take significantly longer to complete than regular conventional drilling programs for lighter oil.  

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Liquidity and Capital Resources

As of June 30, 2015, our total assets were $22,503,143 compared to $23,691,595 as of September 30, 2014. This decrease of $1,188,452 in our total assets was primarily due to a decrease in our accounts receivable, as a result of a subsequent reimbursement of Cdn$1,200,000 from the Farmee in October 2014 for the SAGD Project winterization program.

Our total liabilities as of June 30, 2015 were $625,310 compared to $1,200,188 as of September 30, 2014. This decrease of $574,878 in our total liabilities was primarily the result of our payment for outstanding accounts payable to the operator of the SAGD Project for operating expenses, which was subsequently paid by the Farmee to us just before our 2014 year end, under the Farmout Agreement.

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

	Nine Months Ended		Year Ended
	June 30, 2015		September 30, 2014
Current Assets	$	2,299,450	$	3,418,729
Current Liabilities		189,895		731,175
Working Capital	$	2,109,555	$	2,687,554

As of June 30, 2015, we had working capital of $2,109,555 compared to a working capital of $2,687,554 as of September 30, 2014. This decrease is mainly the result of (i) the net change of accounts receivable, offset by the decrease of accounts payable as described above; and (ii) cash used for general and administrative expenses. As of June 30, 2015, we had no long-term third party debt other than our estimated asset retirement obligations on oil and gas properties.

On July 31, 2013, we entered into the Farmout Agreement to fund our share of the costs of our joint SAGD Project. As of June 30, 2015, we recorded $176,358 in accounts payable due to the operator for our working interest share of the outstanding monthly operating expenses of the SAGD Project, of which all is reimbursable by the Farmee in accordance with the Farmout Agreement. Therefore, this amount is also recorded in accounts receivable to be paid to us from the Farmee to cover our share of the costs of the SAGD Project.

As reported on our Consolidated Statement of Cash Flows under “Operating Activities”, for the nine months ended June 30, 2015, our net cash used in operating activities was $277,562 compared to $1,191,311 for the nine months ended June 30, 2014. This decrease of $913,749 was primarily the result of non-cash working capital related to accounts receivable and accounts payable as disclosed above.

As reported on our Consolidated Statement of Cash Flows under “Investing Activities”, we had a decrease of $3,689,173 in the investment in our oil and gas properties for the nine months ended June 30, 2015, compared to the nine months ended June 30, 2014. This decrease is due to two Royalty purchases: (i) On March 18, 2014, $2,435,124 (Cdn$2,697,600) was paid to a JV Partner for the purchase and transfer of an undivided 3% interest out of the Purported 6.5% Royalty. The consideration paid was the original cost (in Canadian dollars) that the JV Partner paid to acquire its 3% interest in the Purported 6.5% Royalty; and (ii) On June 27, 2014, $1,007,000 was paid to Mr. Malik Youyou, who is a director and majority shareholder of our Company, for the purchase and transfer of an undivided 2.5% interest out of the Purported 6.5% Royalty. The consideration paid was for the reimbursement of the original cost (in US dollars) that Mr. Youyou paid to acquire this 2.5% interest in the Purported 6.5% Royalty from an arm’s length third party.

As reported on our Consolidated Statement of Cash Flows under “Financing Activities”, for the nine months ended June 30, 2015, we received $5,000 from one shareholder in exchange for 47,618 shares of our common stock upon the exercise by that shareholder of warrants at an exercise price of $0.105 per common share.

Our cash and cash equivalents as of June 30, 2015 was $2,023,228 compared to $2,534,059 as of June 30, 2014. This decrease of $510,831 in cash was primarily due to general and administrative expenses. As of June 30, 2015, we had no long-term debt other than our estimated asset retirement obligations on oil and gas properties.

Our current SAGD Project operating costs are covered by the Farmout Agreement. For our long-term operations, we anticipate that, among other alternatives, we may raise funds during the next twenty-four months through sales of our equity securities. We also note that if we issue more shares of our common stock, our shareholders will experience dilution in the percentage of their ownership of common stock. We may not be able to raise sufficient funding from stock sales for long-term operations and if so, we may be forced to delay our business plans until adequate funding is obtained.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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Cautionary Note Regarding Forward-Looking Statements

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

● our current business strategy;

● our future financial position and projected costs;

● our projected sources and uses of cash;

● our plan for future development and operations, including the building of all-weather roads;

● our drilling and testing plans;

● our proposed plans for further thermal in-situ development or demonstration project or projects;

● the sufficiency of our capital in order to execute our business plan;

● our reserves and resources estimates;

● the timing and sources of our future funding.

● the quantity and value of our reserves;

● the intent to issue a distribution to our shareholders;

● our or our operator’s objectives and plans for our current SAGD Project;

● our plans for development of our Sawn Lake properties;

● production levels from our current SAGD Project;

● costs of our current SAGD Project;

● funding from the Farmee to pay our costs for the SAGD project in connection with the Farmout Agreement;

● additional sources of funding from the Farmout Agreement;

● funding from the Farmee to cover our monthly operating expenses;

● our access and availability to third-party infrastructure;

● present and future production of our properties; and

● expectations regarding the ability of our Company and its subsidiaries to raise capital and to continually add to reserves through acquisitions and development.

These forward-looking statements are based on the beliefs and expectations of our management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results may differ materially from current expectations and projections. Factors that could cause actual results to differ materially from those set forward in the forward-looking statements include, but are not limited to:

● changes in general business or economic conditions;

● changes in legislation or regulation that affect our business;

● our ability to obtain necessary regulatory approvals and permits for the development of our properties, including obtaining the required water licences from Alberta Environment to withdraw water for our thermal operations;

● changes to the greenhouse gas reduction program and other environmental and climate change regulations adopted by provincial and or federal governments of Canada or are considering implementing, which may also include cap and trade regimes, carbon taxes, increased efficiency standards, which will increase compliance costs and may impose significant penalties for non-compliance;

● increase in taxes and changes to existing legislation affecting governmental royalties or other governmental initiatives;

● future marketing and transportation of our produced bitumen;

● our ability to receive approvals from the AER 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 or development plans on terms satisfactory to us;

● adverse weather conditions and natural disasters affecting access to our properties and well sites;

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

● volatility in market prices for oil, bitumen, natural gas, diluent and natural gas liquids;

25

● 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, bitumen and natural gas;

● product supply and demand;

● changes and amendments in the Canadian Oil and Gas Evaluation Handbook and or the Petroleum Resources Management System to general disclosure of reserves and resources standards and specific annual reserves and resources disclosure requirements for reporting issuers with oil and gas activities;

● future appraisal of potential bitumen, oil and gas properties may involve unprofitable efforts;

● the ability to meet minimum level of requirements to continue our oil sands leases beyond their expiry dates;

● changes in general business or economic conditions;

● risks associated with the finding, determination, evaluation, assessment and measurement of bitumen, oil and gas deposits or reserves;

● geological, technical, drilling and processing problems;

● third party performance of obligations under contractual arrangements;

● failure to obtain industry partner and other third party consents and approvals, when required;

● treatment under governmental regulatory regimes and tax laws;

● royalties payable in respect of bitumen, oil and gas production;

● unanticipated operating events which can reduce production or cause production to be shut-in or delayed;

● incorrect assessments of the value of acquisitions, and exploration and development programs;

● stock market volatility and market valuation of the common shares of our Company;

● fluctuations in currency and interest rates; and

● the additional risks and uncertainties, many of which are beyond our control, referred to elsewhere in this quarterly report and in our other SEC filings.

The preceding bullets outline some of the risks and uncertainties that may affect our forward-looking statements. For a full description of risks and uncertainties, see the sections entitled “Risk Factors” and “Environmental Laws and Regulations” of our annual report on Form 10-K for the fiscal year ended September 30, 2014, filed with the SEC on January 13, 2015. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Any forward looking statement speaks only as of the date on which it was made and, except as required by law, we disclaim any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q, 8-K and any other SEC filing or amendments thereto should be consulted.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of our fiscal quarter ended June 30, 2015, 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 Securities 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 quarter, 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 Securities and Exchange Commission 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.

It should be noted that while our principal executive officer and principal financial officer believe that our disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Changes In Internal Control Over Financial Reporting

During the fiscal quarter ended June 30, 2015 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.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Although we are a smaller reporting company as defined by Rule 12b-2 under the Exchange Act and are therefore not required to provide the information required under this item, there have been no material changes in our risk factors from those disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2014, filed with the SEC on January 13, 2015.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

Information to be Reported on Form 8-K

Deep Well reported all information that was required to be disclosed on Form 8-K during the period covered by this quarterly report on Form 10-Q.

On July 28, 2015, we and certain holders of warrants to acquire shares of common stock approved the amendment of the warrants held by those warrant holders. In consideration for extending the expiration date of the applicable warrants from November 23, 2015 to November 23, 2016, the aggregate number of shares of our common stock issuable upon exercise of the warrants was reduced from 71,857,141 to 52,155,221. Given the present oil and stock market condition, the warrants holders informed our Company of their unwillingness to exercise their warrants on or before the original expiration date. Therefore, we agreed to extend the term of the warrants but only for a reduced number of warrants at the same exercise price. This reduced number was determined by estimating a value similar of the new extended warrants to the original, now forfeited warrants, with the same strike price, at the time our management and the warrants holders agreed to the basic terms. These terms were subsequently discussed by our Company’s Corporate Governance and Nominating Committee (our “Committee”), which recommended to our Board to accept the new terms as set out between management and the warrants holders. Our Board subsequently agreed with our Committee’s recommendation. No other amendments were made to the terms of the applicable warrants. The amended warrants are filed herewith as exhibits 4.1, 4.2 and 4.3

Shareholder Nominations

Other than the recent adoption of our corporate governance and nominating committee charters as previously disclosed in our annual report on Form 10-K for the year ending September 30, 2014, there have been no changes to the procedures by which shareholders may recommend nominees to our Company’s Board of Directors during the time period covered by this quarterly report on Form 10-Q.

ITEM 6. EXHIBITS

Exhibit No.	Description
4.1	Warrant #31 Amending Agreement dated July 28, 2015, filed herewith.
4.2	Warrant #32 Amending Agreement dated July 28, 2015, filed herewith.
4.3	Warrant #35 Amending Agreement dated July 28, 2015, filed herewith.
31.1	Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101	Interactive Data Files

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DEEP WELL OIL & GAS, INC.
By	/s/ Horst A. Schmid
	Dr. Horst A. Schmid
	Chief Executive Officer and President
	(Principal Executive Officer)
Date	August 14, 2015
By	/s/ Curtis Sparrow
	Mr. Curtis James Sparrow
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date	August 14, 2015

29

EX-4.1

Exhibit 4.1

AMENDING AGREEMENT No. 2

THIS AMENDMENT TO WARRANT CERTIFICATE #31 (this “Amendment”) is executed as of July 28, 2015 between Deep Well Oil & Gas, Inc. (the “Corporation”) and Mr. Malik Youyou. (collectively, the “Parties”).

RECITALS

WHEREAS pursuant to a certain warrant agreement dated November 9, 2010, by and among the Corporation and Mr. Malik Youyou (an insider of the Corporation “Mr. Youyou”), the Corporation issued a warrant certificate for an option to purchase up to an aggregate of 28,571,428 common shares of the Corporation’s common stock at a price of $0.105 USD per common share (“Warrant #31”);

AND WHEREAS pursuant to an amending agreement effective October 10, 2013, the Parties mutually agreed to extend the original expiry date of Warrant #31 to be November 23, 2015 (Amending Agreement #1);

AND WHEREAS the Parties desire to amend and extend the expiration date of the amended Warrant #31 from November 23, 2015 to November 23, 2016;

AND WHEREAS in consideration for extending the expiry date of Warrant #31 by one year, and as accepted on March 11, 2015 by Mr. Youyou, the Parties desire to reduce the number of the warrant shares outstanding represented in Warrant #31 from 28,571,428 to 20,737,662 shares of common stock of the Corporation so that the value of the warrant shares (at 10.5 Cents USD) has the same approximate value of the outstanding warrant shares in the same series as set by the valuation date of February 20, 2015;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties do hereby agree as follows:

1.            Defined Terms. All capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the original Warrant #31 except those Defined Terms that have been amended hereto.

2.            Amendments.

(a)         The definition of “Expiry Date” is Section 1.1(f) of the original Warrant #31 and as amended in Amending Agreement #1 is deleted in its entirety and replaced with the following:

“Expiry Date” means the November 23, 2016 unless modified in accordance with section 3.3 and 3.8; 

(b)         The Parties hereby approve and accept the consideration for extending the expiry date of Warrant #31 to be November 23, 2016, by effectively reducing the number of the warrant shares outstanding represented in Warrant #31 from 28,571,428 to 20,737,662 shares of common stock of the Corporation.

3.           Entire Agreement; Ratification. This Amendment constitutes the entire agreement among the Parties with respect to the subject matter hereof. Except as expressly amended hereby, the terms of the original Warrant #31 are each hereby confirmed and ratified in all respects by the Parties hereto and remain in full force and effect.

4.           Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and any of their respective subsidiaries, affiliates, insurers, predecessors, successors, officers, directors, managers, employees, stockholders, members, agents, attorneys or assigns.

5.           Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. Each of the Parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Alberta.

6.            Counterparts. This Amendment may be signed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

7.           Necessary Action. Each party shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Amendment.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. 

DEEP WELL OIL & GAS, INC.
By:	/s/ Horst A. Schmid
	Name: Dr. Horst A. Schmid Title: President & Chief Executive Officer
WARRANT HOLDER
By:	/s/ Malik Youyou
	Name: Mr. Malik Youyou
	Title:

EX-4.2

Exhibit 4.2

AMENDING AGREEMENT No. 1

THIS AMENDMENT TO WARRANT CERTIFICATE #32 (this “Amendment”) is executed as of July 28, 2015 between Deep Well Oil & Gas, Inc. (the “Corporation”) and Mr. Malik Youyou. (collectively, the “Parties”).

RECITALS

WHEREAS pursuant to a certain warrant agreement dated November 23, 2012, by and among the Corporation and Mr. Malik Youyou (an insider of the Corporation “Mr. Youyou”), the Corporation issued a warrant certificate for an option to purchase up to an aggregate of 42,857,142 common shares of the Corporation’s common stock at a price of $0.105 USD per common share (“Warrant #32”);

AND WHEREAS the Parties desire to amend and extend the expiration date of Warrant #32 from November 23, 2015 to November 23, 2016;

AND WHEREAS in consideration for extending the expiry date of Warrant #32 by one year, and as accepted on March 11, 2015 by Mr. Youyou, the Parties desire to reduce the number of the warrant shares outstanding represented in Warrant #32 from 42,857,142 to 31,106,494 shares of common stock of the Corporation so that the value of the warrant shares (at 10.5 Cents USD) has the same approximate value of the outstanding warrant shares in the same series as set by the valuation date of February 20, 2015;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties do hereby agree as follows:

1.Defined Terms. All capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the original Warrant #32 except those Defined Terms that have been amended hereto.

2.            Amendments.

(a)            The definition of “Expiry Date” is Section 1.1(f) of the original Warrant #32 is deleted in its entirety and replaced with the following:

“Expiry Date” means the November 23, 2016 unless modified in accordance with section 3.3 and 3.8;

(b)            The Parties hereby approve and accept the consideration for extending the expiry date of Warrant #32 to be November 23, 2016, by effectively reducing the number of the warrant shares outstanding represented in Warrant #32 from 42,857,142 to 31,106,494 shares of common stock of the Corporation.

3.Entire Agreement; Ratification. This Amendment constitutes the entire agreement among the Parties with respect to the subject matter hereof. Except as expressly amended hereby, the terms of the original Warrant #32 are each hereby confirmed and ratified in all respects by the Parties hereto and remain in full force and effect.

4.            Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and any of their respective subsidiaries, affiliates, insurers, predecessors, successors, officers, directors, managers, employees, stockholders, members, agents, attorneys or assigns.

5.Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. Each of the Parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Alberta.

6.Counterparts. This Amendment may be signed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

7.Necessary Action. Each party shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Amendment.

            IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

DEEP WELL OIL & GAS, INC.
By:	/s/ Horst A. Schmid
	Name: Dr. Horst A. Schmid Title: President & Chief Executive Officer
WARRANT HOLDER
By:	/s/ Malik Youyou
	Name: Mr. Malik Youyou
	Title:

EX-4.3

Exhibit 4.3

AMENDING AGREEMENT No. 1

THIS AMENDMENT TO WARRANT CERTIFICATE #35 (this “Amendment”) is executed as of July 28, 2015 between Deep Well Oil & Gas, Inc. (the “Corporation”) and Cambridge Strategies, Inc. (collectively, the “Parties”).

RECITALS

WHEREAS pursuant to a certain warrant agreement dated June 23, 2014, by and among the Corporation and Cambridge Strategies, Inc. (“Cambridge” a company 50% owned by Mr. Satya Brata Das an insider of the Corporation), the Corporation issued a warrant certificate for an option to purchase up to an aggregate of 428,571 common shares of the Corporation’s common stock at a price of $0.105 USD per common share (“Warrant #35”);

AND WHEREAS the Parties desire to amend and extend the expiration date of Warrant #35 from November 23, 2015 to November 23, 2016;

AND WHEREAS in consideration for extending the expiry date of Warrant #35 by one year, and as accepted by Cambridge, the Parties desire to reduce the number of the warrant shares outstanding represented in Warrant #35 from 428,571 to 311,065 shares of common stock of the Corporation so that the value of the warrant shares (at 10.5 Cents USD) has the same approximate value of the outstanding warrant shares in the same series as set by the valuation date of February 20, 2015;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties do hereby agree as follows:

1.Defined Terms. All capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the original Warrant #35 except those Defined Terms that have been amended hereto.

2.Amendments.

(a) The definition of “Expiry Date” is Section 1.1(f) of the original Warrant #35 is deleted in its entirety and replaced with the following:

“Expiry Date” means the November 23, 2016 unless modified in accordance with section 3.3 and 3.8;

(b) The Parties hereby approve and accept the consideration for extending the expiry date of Warrant #35 to be November 23, 2016, by effectively reducing the number of the warrant shares outstanding represented in Warrant #35 from 428,571 to 311,065 shares of common stock of the Corporation.

3.Entire Agreement; Ratification. This Amendment constitutes the entire agreement among the Parties with respect to the subject matter hereof. Except as expressly amended hereby, the terms of the original Warrant #35 are each hereby confirmed and ratified in all respects by the Parties hereto and remain in full force and effect.

4.Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and any of their respective subsidiaries, affiliates, insurers, predecessors, successors, officers, directors, managers, employees, stockholders, members, agents, attorneys or assigns.

5.Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. Each of the Parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Alberta.

6.Counterparts. This Amendment may be signed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement.

7.Necessary Action. Each party shall perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Amendment.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

DEEP WELL OIL & GAS, INC.
By:	/s/ Horst A. Schmid
	Name: Dr. Horst A. Schmid
	Title: President & Chief Executive Officer
WARRANT HOLDER
By:	/s/ Satya Brata Das
	Cambridge Strategies, Inc.
	Name: Mr. Satya Brata Das
	Title:

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities
Exchange Act of 1934

I, Dr. Horst A. Schmid, President and Chief Executive Officer of Deep Well Oil & Gas, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Deep Well Oil & Gas, Inc. for the quarterly period ended June 30, 2015;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 14, 2015
By:	/s/ Horst A. Schmid
	Dr. Horst A. Schmid
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities
Exchange Act of 1934

I, Mr. Curtis James Sparrow, Chief Financial Officer of Deep Well Oil & Gas, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Deep Well Oil & Gas, Inc. for the quarterly period ended June 30, 2015;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 14, 2015
By:	/s/ Curtis Sparrow
	Mr. Curtis James Sparrow
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Deep Well Oil & Gas, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dr. Horst A. Schmid, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	August 14, 2015
By:	/s/ Horst A. Schmid
	Dr. Horst A. Schmid
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant To

18 U.S.C. Section 1350,

As Adopted Pursuant To

Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Deep Well Oil & Gas, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mr. Curtis James Sparrow, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date:	August 14, 2015
By:	/s/ Curtis Sparrow
	Mr. Curtis James Sparrow
	Chief Financial Officer

XML

Oil and Gas Properties (Details Textual)

1 Months Ended

9 Months Ended

Sep. 25, 2014

Jul. 31, 2013

USD ($)

Jun. 30, 2015

USD ($)

a

oil

Wells

Jun. 30, 2015

CAD

a

oil

Wells

Nov. 17, 2014

USD ($)

Sep. 30, 2014

Wells

Jun. 30, 2014

a

Oil and Gas Properties (Textual)

Gas and oil area, net | a

34,096

34,096

Gas and oil area, gross | a

43,015

43,015

Number of oil and gas for leases

9

9

Description for term of capital lease

If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its primary oil sands leases: 1. drill 68 wells throughout the 68 sections; or 2. drill 44 wells within the 68 sections and having acquired and processed 2 miles of seismic on each other undrilled section.

If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its primary oil sands leases: 1. drill 68 wells throughout the 68 sections; or 2. drill 44 wells within the 68 sections and having acquired and processed 2 miles of seismic on each other undrilled section.

Miles of seismic acquired on leases

25 miles of seismic.

25 miles of seismic.

Number of wells company has interest in | Wells

10

10

10

Description of purchase and sale agreement

Effective September 25, 2014, the Company, through its subsidiary Deep Well Alberta, entered into a Purchase and Sale agreement with Classic Energy Inc. (“Classic”), pursuant to which the Company acquired Classic’s 20% working interest in five sections in one Sawn Lake oil sands lease where the Company already owned working interests. As of September 25, 2014, the Company increased its net acres in the Sawn Lake oil sands properties from 33,463 to 34,096 net acres.

Minimum [Member]

Oil and Gas Properties (Textual)

Gas and oil area, net | a

33,463

Maximum [Member]

Oil and Gas Properties (Textual)

Gas and oil area, net | a

34,096

34,096

Land One [Member]

Oil and Gas Properties (Textual)

Lease agreements, expiration date

Jul. 10, 2018

Jul. 10, 2018

Number of oil and gas for leases

5

5

Land Two [Member]

Oil and Gas Properties (Textual)

Lease agreements, expiration date

Aug. 19, 2019

Aug. 19, 2019

Number of oil and gas for leases

3

3

Land Three [Member]

Oil and Gas Properties (Textual)

Lease agreements, expiration date

Apr. 09, 2024

Apr. 09, 2024

Number of oil and gas for leases

1

1

Farmout Agreement [Member]

Oil and Gas Properties (Textual)

Description and Terms of Farmout Agreement

On July 31, 2013, the Company entered into a Farmout agreement (the "Farmout Agreement) with an additional joint venture partner (the "Farmee") to fund the Company's share of the AER approved SAGD Project at the Company's Sawn Lake heavy oil reservoir in North Central Alberta, Canada. In accordance with the Farmout Agreement the Farmee has agreed to provide up to $40,000,000 in funding for the Company's portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where the Company had a working interest of 50% (before the execution of the Farmout Agreement).

Potential option under Farmout Agreement for additional funding | $

$ 110,000,000

Potential option under Farmout Agreement for additional funding description

In addition, until December 31, 2015, as amended on November 17, 2014, the Farmee has the option to elect to obtain a working interest of 45% to 50% working interest in the remaining 56 sections of land where the Company has working interests ranging from 90% to 100%, by committing an additional $110,000,000 of financing to the development of the Company's Sawn Lake oil sands properties. As of June 30, 2015, the Farmee has not exercised this option.

Funding for project under agreement | $

$ 40,000,000

Monthly maximum payable by Farmee for operating expense | $

$ 30,000

Northern Alberta Oil Ltd [Member]

Oil and Gas Properties (Textual)

Percentage of ownership interest

100.00%

100.00%

Purported gross overriding royalty percentage

6.50%

6.50%

JV Partner [Member]

Oil and Gas Properties (Textual)

Acquisition of purported gross overriding royalty from non-related party

$ 2,435,124

CAD 2,697,600

Purported gross overriding royalty percentage

3.00%

3.00%

Mr. Malik Youyou [Member]

Oil and Gas Properties (Textual)

Acquisition of purported gross overriding royalty from related party | $

$ 1,007,000

Purported gross overriding royalty percentage

2.50%

2.50%

XML

Stock Options (Details 1) - $ / shares	Jun. 30, 2015	Sep. 30, 2014	Oct. 31, 2013	Sep. 30, 2013
Summary of company's stock options
Number of underlying shares, Beginning balance			4,350,000
Stock Options [Member]
Summary of company's stock options
Number of underlying shares, Beginning balance	12,430,000	11,830,000		900,000
Number of underlying shares, Exercisable	7,760,000	6,460,000
Weighted Average Exercise Price, beginning balance	$ 0.26	$ 0.26		$ 0.14
Weighted Average Exercise Price Exercisable	0.20	0.21
Weighted Average Fair Market Value	0.21	$ 0.21
Weighted Average Fair Market Value, Exercisable	$ 0.16

XML

Asset Retirement Obligations (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Asset Retirement Obligations [Abstract]
Balance, beginning of period	$ 469,013	$ 446,155
Liabilities incurred		73,395
Effect of foreign exchange	$ (45,837)	(64,079)
Disposal		(4,045)
Accretion expense	$ 12,239	17,587
Balance, end of period	$ 435,415	$ 469,013

XML

Stock Options (Details 2) - Employee Stock Option [Member] - $ / shares	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of underlying shares, Beginning balance	11,830,000	900,000
Number of options, Granted		3,450,000
Number of option, Granted at October 28, 2013		250,000
Number of option, Granted at December 4, 2013		450,000
Number of option, Granted at September 19, 2014		6,780,000
Number of option, Granted- November 17, 2014	600,000
Number of option, Vested at November 17, 2014	200,000
Number of option, Vested at December 4, 2014	150,000
Number of option, Vested at June 20, 2015	950,000
Number of underlying shares, Ending balance	12,430,000	11,830,000
Number of underlying shares, exercisable	7,760,000	6,460,000
Weighted Average Exercise Price, Beginning balance	$ 0.26	$ 0.14
Weighted average exercise price, Granted		0.05
Weighted average exercise price, Granted at October 28, 2013		0.30
Weighted average exercise price, Granted at December 4, 2013		0.34
Weighted average exercise price, Granted at September 19, 2014		0.38
Weighted average exercise price, Granted at November 17, 2014	0.38
Weighted average exercise price, Vested at November 17, 2014	0.38
Weighted average exercise price, Vested at December 4, 2014	0.34
Weighted average exercise price, Vested at June 20, 2015	0.05
Weighted Average Exercise Price, Ending balance	0.26	0.26
Weighted average exercise price, exercisable	$ 0.20	$ 0.21

XML

Long Term Investments (Details)	9 Months Ended
	Jun. 30, 2015
Long Term Investments (Textual)
Interest rate below prime rate	0.375%

XML

Crude Oil and Natural Gas Property Information (Tables)

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

Summary of operations from oil and gas producing activities

	June 30, 2015			June 30, 2014		September 30, 2014
Oil sales after royalties	$	425,635		$	–	$	47,116
Production (Operating) expenses		(425,635	)		–		(47,115	)
Exploration expenses		(27,356	)		–		(47,182	)
Depreciation, accretion and depletion		(62,907	)		–		(97,646	)
Oil sales less expenses		(90,263	)		–		(144,827	)
Income tax expenses		–			–		–
Results of operations from producing activities	$	(90,263	)	$	–	$	(144,827	)

XML

Changes in Non-Cash Working Capital (Details) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Summary of changes in non-cash working capital
Accounts receivable	$ 823,334	$ (471,814)
Prepaid expenses	(5,582)	123,548
Accounts payable	(541,280)	(245,530)
Net changes in non-cash working capital (Note 13)	$ 276,472	$ (593,796)

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Oil and Gas Properties (Tables)

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

Summary of net payments due in Canadian dollars

	(Cdn $)
2015	$	12,074
2016	$	48,294
2017	$	48,294
2018	$	48,294
2019	$	29,478
Subsequent	$	22,400

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Common Stock (Details) - Warrant [Member] - $ / shares	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Summary of Warrants
Shares Underlying Warrants Outstanding	72,377,141	72,424,759
Shares Underlying Warrants Outstanding Weighted Average Remaining Contractual Life	4 months 24 days
Shares Underlying Warrants Outstanding Weighted Average Exercise Price	$ 0.105
Shares Underlying Warrants Exercisable	72,377,141
Shares Underlying Warrants Exercisable Weighted Average Exercise Price	$ 0.105	$ 0.105
$0.105 at June 30, 2015 [Member]
Summary of Warrants
Shares Underlying Warrants Outstanding	71,857,141
Shares Underlying Warrants Outstanding Weighted Average Remaining Contractual Life	11 months 23 days
Shares Underlying Warrants Outstanding Weighted Average Exercise Price	$ 0.105
Shares Underlying Warrants Exercisable	71,857,141
Shares Underlying Warrants Exercisable Weighted Average Exercise Price	$ 0.105
$0.075 at June 30, 2015 [Member]
Summary of Warrants
Shares Underlying Warrants Outstanding	520,000
Shares Underlying Warrants Outstanding Weighted Average Remaining Contractual Life	4 months 24 days
Shares Underlying Warrants Outstanding Weighted Average Exercise Price	$ 0.075
Shares Underlying Warrants Exercisable	520,000
Shares Underlying Warrants Exercisable Weighted Average Exercise Price	$ 0.075

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Exploration Activities (Details) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Acquisition of Properties:
Proved
Unproved	$ 20,175	$ 3,660,626
Exploration costs	$ 27,356	$ 21,813
Development costs

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Summary of Significant Accounting Policies (Details Textual) - USD ($)	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014	Sep. 30, 2013
Summary of significant accounting policies(Textual)
Allowance for bad debts
Capitalized equipment and facility costs	$ 19,600,000	$ 19,600,000
Asset retirement obligations	$ 435,415	$ 469,013	$ 446,155
Leasehold improvements amortization period	5 years
Antidilutive securities excluded from computation of earnings per share	1,855,000
Impairments to long-lived assets
Risk, Percentage	100.00%

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Common Stock (Details Textual) - USD ($)			9 Months Ended
	Oct. 03, 2014	Jun. 23, 2014	Jun. 30, 2015	Sep. 30, 2014
Common Stock (Textual)
Common stock, shares outstanding			229,374,605	229,326,987
Expected term			5 years
Expected volatility, Minimum			96.00%
Expected volatility, Maximum			116.00%
Risk-free Interest rate, Minimum			0.62%
Risk-free Interest rate, Maximum			1.31%
Warrant [Member]
Common Stock (Textual)
Warrants cancelled and transferred to non-related party
Exercise price of warrant			$ 0.105
Stock issued during period to warrant holder shares	47,618
Stock issued during period to warrant holder value	$ 5,000
Warrant Outstanding			72,377,141	72,424,759
Historical fair market value of warrant			$ 1,738,336	$ 1,738,336
Warrant [Member] | Non Related Party [Member]
Common Stock (Textual)
Warrants cancelled and transferred to non-related party		47,618

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Crude Oil and Natural Gas Property Information (Details Textual)	9 Months Ended
	Jun. 30, 2015 USD ($) barrels $ / Barrel	Jun. 30, 2014 USD ($) barrels	Jul. 31, 2013
Average Sales Price and Production Costs Per Unit of Production [Line Items]
Costs paid to Operator by Farmee under Farmout Agreement for Phase 1 SAGD Project	$ 22,800,000
Crude Oil and NGL [Member]
Average Sales Price and Production Costs Per Unit of Production [Line Items]
Oil revenue after royalties	$ 425,635
Consolidated oil and gas production volumes net | barrels	17,043
Average oil sales price | $ / Barrel	26.35
Production (Operating) expenses	$ 0
SAGD [Member]
Average Sales Price and Production Costs Per Unit of Production [Line Items]
Estimated Gross Capital Costs for Phase 1 SAGD Project	$ 32,800,000
Description and Terms of Farmout Agreement	100.00%		25.00%

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Significant Transactions With Related Parties (Details) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Significant Transactions With Related parties (Textual)
Accounts payable and accrued liabilities - related parties	$ 7,101		$ 16,977
Percentage of outstanding common capital stock	53.63%
Professional fees and consulting services	$ 112,590	$ 124,997

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Capitalization of Costs Incurred in Oil and Gas Activities

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES

4. CAPITALIZATION OF COSTS INCURRED IN OIL AND GAS ACTIVITIES

The Company accounts for the cost of its oil sands projects and continues to capitalize project costs after the completion of drilling, equipping and facility construction as long as sufficient progress is being made in assessing the oil sands reserves to justify the oil sands project as a producing well.

For the period ended June 30, 2015, the Company’s management determined that sufficient progress has been made in assessing its oil sands reserves for continued capitalization of exploratory drilling, equipping and facility 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, economic studies, and AER approved thermal recovery projects; including the Company’s now producing SAGD Project, 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.

For the Company’s oil sands projects, exploratory drilling, equipping and facility costs are capitalized on the balance sheet under “Oil and Gas Properties” line item, pending a determination of whether potentially economic oil sands reserves have been discovered by the drilling effort to justify oil sands project as a producing well. The Company periodically assesses the exploration drilling, equipping and facility capitalized costs for impairment and once a determination is made that a well is of no potential economic value, the costs related to that oil sands project are expensed as dry hole and reported in exploration expense. No impairments to the Company’s long-lived assets were identified or recorded in the nine months ended June 30, 2015 or in the fiscal year ended September 30, 2014.

The following table illustrates capitalized costs relating to oil producing activities as of June 30, 2015 and September 30, 2014:

	June 30,  2015			September 30, 2014
Unproved Oil and Gas Properties	$	19,671,471		$	19,651,296
Proved Oil and Gas Properties		4,568			4,568
Accumulated Depreciation and Depletion		(62,614	)		(51,814	)
Net Capitalized Cost	$	19,613,425		$	19,604,050

Depreciation and depletion expense for the nine months ended June 30, 2015 and 2014 was $10,800 and $7,178, respectively.

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Subsequent Events (Details)	Jul. 27, 2015 CAD
Summary of annual payments under office lease agreement
Quarterly payments due	CAD 7,969
Subsequent Event [Member] | 2015 Q4 (July - September) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2016 Q1 (October - December) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2016 Q2 (January - March) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2016 Q3 (April - June) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2016 Q4 (July - September) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2017 Q1 (October - December) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2017 Q2 (January - March) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	7,969
Subsequent Event [Member] | 2017 Q3 (April - June) [Member]
Summary of annual payments under office lease agreement
Quarterly payments due	CAD 7,969

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Investment in Equity Securities (Details) - shares	1 Months Ended
	Nov. 19, 2008	Dec. 31, 2014
Investment in Equity Securities (Textual)
Conversion of Signet shares into shares of Andora Energy Corporation	2,241,558
Percentage of equity interest in Andora		2.24%

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Asset Retirement Obligations (Tables)

9 Months Ended

Jun. 30, 2015

Asset Retirement Obligations [Abstract]

Schedule of changes to the asset retirement obligation

	June 30, 2015			September 30, 2014
Balance, beginning of period	$	469,013		$	446,155
Liabilities incurred		–			73,395
Effect of foreign exchange		(45,837	)		(64,079	)
Disposal		–			(4,045	)
Accretion expense		12,239			17,587
Balance, end of period	$	435,415		$	469,013

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Property and Equipment (Tables)

9 Months Ended

Jun. 30, 2015

Property and Equipment [Abstract]

Summary of Property and Equipment

	June 30, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,197	$	31,723	$	474
Office furniture and equipment		34,130		28,055		6,075
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		151,764		18,816
Vehicles		38,077		33,861		4,216
Oilfield equipment		249,046		152,133		96,913
Road mats		364,614		324,245		40,369
Wellhead		3,254		2,278		976
Tanks		96,085		46,227		49,858
	$	998,745	$	781,048	$	217,697

	September 30, 2014
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,198	$	31,264	$	934
Office furniture and equipment		34,130		26,880		7,250
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		146,211		24,369
Vehicles		38,077		32,637		5,440
Oilfield equipment		249,045		135,030		114,015
Road mats		364,614		312,525		52,089
Wellhead		3,254		2,053		1,201
Tanks		96,085		42,185		53,900
	$	998,745	$	739,547	$	259,198

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Stock Options (Details Textual)					1 Months Ended		9 Months Ended		12 Months Ended
	Nov. 17, 2014 shares	Dec. 04, 2013 Directors shares	Oct. 28, 2013 shares	Mar. 23, 2011 shares	Sep. 19, 2014 Directors Employee Consultants $ / shares shares	Jun. 20, 2013 shares	Jun. 30, 2015 USD ($) shares	Jun. 30, 2014 USD ($)	Sep. 30, 2014 USD ($) shares	Oct. 31, 2013 shares	Sep. 30, 2013 shares	Nov. 28, 2005
Stock Options (Textual)
Unrecognized compensation cost related to awards | $							$ 491,074
Share-based Compensation | $							$ 865,756	$ 239,480
Expected term							5 years
Expected volatility, Minimum							96.00%
Expected volatility, Maximum							122.00%
Risk-free Interest rate, Minimum							0.62%
Risk-free Interest rate, Maximum							1.83%
Stock option outstanding										4,350,000
Stock option granted unvested						950,000
Portwest Investments Ltd [Member]
Stock Options (Textual)
Number of consultants | Consultants					2
Description of stock options vesting					600,000 vesting immediately and remaining vesting on September 19, 2015.
Number of option, Granted at September 19, 2014					1,200,000
Option exercise price | $ / shares					$ 0.38
Number of shares vested immediately					600,000
Option vesting period					5 years
Directors [Member]
Stock Options (Textual)
Number of directors | Directors		1			7
Description of stock options vesting	200,000 vesting immediately and the remaining vesting one-third on November 17, 2015, and one-third on November 17, 2016, with a five-year life.	150,000 vesting immediately and the remaining vesting one-third on December 4, 2014, and one-third on December 4, 2015, with a five-year life.			200,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.
Number of options, Granted	600,000	450,000
Number of option, Granted at September 19, 2014					600,000
Option exercise price | $ / shares					$ 0.38
Number of shares vested immediately	200,000	150,000			200,000
Option vesting period	5 years	5 years			5 years
Employee [Member]
Stock Options (Textual)
Number of Employee | Employee					1
Description of stock options vesting					60,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.
Number of option, Granted at September 19, 2014					180,000
Option exercise price | $ / shares					$ 0.38
Number of shares vested immediately					60,000
Option vesting period					5 years
Contractor [Member]
Stock Options (Textual)
Number of options, Granted			250,000
Option vesting period			5 years
Directors, Consultants and Employee [Member]
Stock Options (Textual)
Number of options, Granted				3,450,000		900,000
Maximum
Stock Options (Textual)
Maximum percentage of number of shares which may be reserved for issuance												10.00%
Stock options and stock units issued vesting percentage												2.00%
Stock Options [Member]
Stock Options (Textual)
Number of options, Granted									3,450,000
Number of option, Granted at September 19, 2014									6,780,000
Stock options - Exercised August 12, 2013, shares
Stock option outstanding unvested							4,670,000		5,370,000
Aggregate intrinsic value of exercisable options | $									$ 0.11
Stock option outstanding							12,430,000		11,830,000		900,000

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Property and Equipment (Details) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Summary of Property and Equipment
Cost	$ 998,745	$ 998,745
Accumulated Depreciation	781,048	739,547
Net Book Value	217,697	259,198
Computer equipment [Member]
Summary of Property and Equipment
Cost	32,197	32,198
Accumulated Depreciation	31,723	31,264
Net Book Value	474	934
Office furniture and equipment [Member]
Summary of Property and Equipment
Cost	34,130	34,130
Accumulated Depreciation	28,055	26,880
Net Book Value	6,075	7,250
Software [Member]
Summary of Property and Equipment
Cost	5,826	5,826
Accumulated Depreciation	$ 5,826	$ 5,826
Net Book Value
Leasehold Improvements [Member]
Summary of Property and Equipment
Cost	$ 4,936	$ 4,936
Accumulated Depreciation	$ 4,936	$ 4,936
Net Book Value
Portable work camp [Member]
Summary of Property and Equipment
Cost	$ 170,580	$ 170,580
Accumulated Depreciation	151,764	146,211
Net Book Value	18,816	24,369
Vehicles [Member]
Summary of Property and Equipment
Cost	38,077	38,077
Accumulated Depreciation	33,861	32,637
Net Book Value	4,216	5,440
Oilfield equipment [Member]
Summary of Property and Equipment
Cost	249,046	249,045
Accumulated Depreciation	152,133	135,030
Net Book Value	96,913	114,015
Road mats [Member]
Summary of Property and Equipment
Cost	364,614	364,614
Accumulated Depreciation	324,245	312,525
Net Book Value	40,369	52,089
Wellhead [Member]
Summary of Property and Equipment
Cost	3,254	3,254
Accumulated Depreciation	2,278	2,053
Net Book Value	976	1,201
Tanks [Member]
Summary of Property and Equipment
Cost	96,085	96,085
Accumulated Depreciation	46,227	42,185
Net Book Value	$ 49,858	$ 53,900

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Common Stock (Tables)

9 Months Ended

Jun. 30, 2015

Common Stock [Abstract]

Summary of Company's warrants outstanding

	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 June 30, 2015		71,857,141		0.40		0.105		71,857,141		0.105
$0.075 at June 30, 2015		520,000		0.98		0.075		520,000		0.075
		72,377,141		0.40		0.105		72,377,141		0.105

Summary of warrants activity

	Number of Warrants		Weighted Average Exercise Price		Intrinsic Value
Balance, September 30, 2014		72,424,759	$	0.105	$	0.215
Cancelled		–		–		–
Granted		–		–		–
Exercised		47,618		0.105		–
Balance, June 30, 2015		72,377,141	$	0.105	$	–
Outstanding Warrants, June 30, 2015		72,377,141	$	0.105	$	–
Exercisable Warrants, June 30, 2015		72,377,141	$	0.105	$	–

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Stock Options (Tables)

9 Months Ended

Jun. 30, 2015

Stock Options [Abstract]

Summary of stock options

	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 June 30, 2015		900,000		0.73	$	0.14		900,000	$	0.14
$0.05 at June 30, 2015		3,450,000		2.98		0.05		3,450,000		0.05
$0.30 at June 30, 2015		250,000		3.33		0.30		250,000		0.30
$0.34 at June 30, 2015		450,000		3.43		0.34		300,000		0.34
$0.38 at June 30, 2015		6,780,000		4.22		0.38		2,660,000		0.38
$0.23 at June 30, 2015		600,000		4.39		0.23		200,000		0.23
		12,430,000		3.59	$	0.26		7,760,000	$	0.20

Summary of stock option activity

	Number of Underlying Shares		Weighted Average Exercise Price		Weighted Average Fair Market Value
Balance, September 30, 2014		11,830,000	$	0.26	$	0.21
Balance, June 30, 2015		12,430,000	$	0.26	$	0.21
Exercisable, June 30, 2015		7,760,000	$	0.20	$	0.16

Summary of option granted

	June 30, 2015				September 30, 2014
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding balance at beginning of period		11,830,000	$	0.26		900,000	$	0.14
		–		–		3,450,000		0.05
Granted- October 28, 2013		–		–		250,000		0.30
Granted- December 4, 2013		–		–		450,000		0.34
Granted- September 19, 2014		–		–		6,780,000		0.38
Granted- November 17, 2014		600,000		0.38		–		–
Vested- November 17, 2014		200,000		0.38		–		–
Vested- December 4, 2014		150,000		0.34		–		–
Vested- June 20, 2015		950,000		0.05		–		–
Outstanding at end of period		12,430,000	$	0.26		11,830,000	$	0.26
Exercisable		7,760,000		0.20		6,460,000		0.21

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Oil and Gas Properties

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

OIL AND GAS PROPERTIES

3. OIL AND GAS PROPERTIES

The Company’s oil sands acreage as of June 30, 2015, covers 43,015 gross acres (34,096 net acres) on 68 sections of land under nine oil sands leases. Until the Company extends the leases “into perpetuity” based on the Alberta governmental regulations, the lease expiration dates of the Company’s nine oil sands leases are as follows:

1) 32 sections of land under 5 oil sands leases are set to expire on July 10, 2018;

2) 31 sections of land under 3 oil sands leases are set to expire on August 19, 2019; and

3) 5 sections of land under 1 oil sands lease are set expire on April 9, 2024. It is the Company’s opinion that the Company has already met the governmental requirements for this lease and it will be applying to continue this lease into perpetuity.

Effective September 25, 2014, the Company, through its subsidiary Deep Well Alberta, entered into a Purchase and Sale agreement with Classic Energy Inc. (“Classic”), pursuant to which the Company acquired Classic’s 20% working interest in five sections in one Sawn Lake oil sands lease where the Company already owned working interests. As of September 25, 2014, the Company increased its net acres in the Sawn Lake oil sands properties from 33,463 to 34,096 net acres.

Lease Rental Commitments

The Company has acquired interests in certain oil sands properties located in North Central Alberta, Canada. The terms include certain commitments related to oil sands properties that require the payments of rents as long as the leases are non-producing. As of June 30, 2015, the Company’s net payments due under this commitment are as follows:

	(Cdn $)
2015	$	12,074
2016	$	48,294
2017	$	48,294
2018	$	48,294
2019	$	29,478
Subsequent	$	22,400

The government of Alberta owns this land and the Company has acquired the rights to perform oil activities on these lands. If the Company meets the conditions of the leases the Company will then be permitted to drill on and produce oil from the land into perpetuity. These conditions give the Company until the expiration of the leases to meet the following requirements on its primary oil sands leases:

1) drill 68 wells throughout the 68 sections; or

2) drill 44 wells within the 68 sections and having acquired and processed two miles of seismic on each other undrilled section.

The Company plans to meet the second of these conditions. As at June 30, 2015 and September 30, 2014, the Company has an interest in ten wells, which can be counted towards these requirements.

The Company has identified two other wells drilled on these leases, which may be included in the satisfaction of this requirement. The Company has also acquired and processed 25 miles of seismic on the leases, which can be counted towards these requirements. Our joint venture partner and operator of the SAGD Project has also acquired additional seismic that can be used towards our MLE requirements.

The Company follows the successful efforts method of accounting for costs of oil properties. Under this method, only those exploration and development costs that relate directly to specific oil reserves are capitalized; costs that do not relate directly to specific reserves are charged to expense. Producing, non-producing and unproven properties are assessed annually, or more frequently as economic events indicate, for potential impairment.

This consists of comparing the carrying value of the asset with the asset’s expected future undiscounted cash flows without interest costs. Estimates of expected future cash flows represent management’s best estimate based on reasonable and supportable assumptions. Proven oil properties are reviewed for impairment on a field-by-field basis. No impairment losses were recognized for the period ended June 30, 2015 (September 30, 2014 - $nil).

Capitalized costs of proven oil properties will be depleted using the unit-of-production method when the property is placed in production.

Substantially all of the Company’s oil activities are conducted jointly with others. The accounts reflect only the Company’s proportionate interest in such activities.

Farmout Agreement

On July 31, 2013, the Company entered into a Farmout agreement (the “Farmout Agreement”) with an additional joint venture partner (the “Farmee”) to fund the Company’s share of the Alberta Energy Regulator (“AER”) approved SAGD Project at the Company’s Sawn Lake heavy oil reservoir in North Central Alberta, Canada. In accordance with the Farmout Agreement the Farmee has agreed to provide up to $40,000,000 in funding for the Company’s portion of the costs for the SAGD Project, in return for a net 25% working interest in 12 sections where the Company had a working interest of 50% (before the execution of the Farmout Agreement). The Farmee will also provide funding to cover monthly operating expenses of the Company, of which the first such monthly payment began in respect of the month of August 2013 and shall not to exceed $30,000 per month. In addition, until December 31, 2015, as amended on November 17, 2014, the Farmee has the option to elect to obtain a working interest of 45% to 50% working interest in the remaining 56 sections of land where the Company has working interests ranging from 90% to 100%, by committing an additional $110,000,000 of financing to the development of the Company’s Sawn Lake oil sands properties. As of June 30, 2015, the Farmee has not exercised this option.

Acquisition of Royalty Interests

On March 18, 2014 and June 27, 2014, the Company, through its 100% wholly owned subsidiary company Northern Alberta Oil Ltd., entered into and subsequently closed two Acquisition of Royalty Interest Agreements and General Indenture of Conveyance, Assignment and Transfer Agreements (collectively the “Agreements”), with the Company’s joint venture partner (“JV Partner”) and one related party (Mr. Malik Youyou), whereby the Company acquired and cancelled 5.5% of a disputed 6.5% overriding royalty claim (the “Purported 6.5% Royalty”) potentially on some lands owned by the Company. The Company’s counsel and vendor’s counsel negotiated the terms and conditions of both the “Acquisition of Royalty Interest” and “General Indenture of Conveyance, Assignment and Transfer” agreements. Although the Company does not confirm the validity of the Purported 6.5% Royalty, the Company determined that it was in the best interests of its shareholders to come to an arrangement to acquire and cancel most of the Purported 6.5% Royalty to prevent a potential encumbrance over its land or the possibility of future litigation resulting from these alleged royalty claims. Pursuant to the terms and conditions of the Agreements to acquire the purported overriding royalty interest claims, the Company paid the following consideration:

(i) US $2,435,124 (Cdn $2,697,600) was paid to the JV Partner for the purchase and transfer of an undivided 3% interest out of the Purported 6.5% Royalty. The consideration paid was the original cost (in Canadian dollars) that the JV Partner paid to acquire its 3% interest in the Purported 6.5% Royalty.

(ii) US $1,007,000 was paid to Mr. Malik Youyou, who is a director and majority shareholder of the Company, for the purchase and transfer of an undivided 2.5% interest out of the Purported 6.5% Royalty. The consideration paid was for the reimbursement of the original cost (in US dollars) that Mr. Youyou paid to acquire this 2.5% interest in the Purported 6.5% Royalty from an arm’s length third party.

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Changes in Non-Cash Working Capital (Tables)

9 Months Ended

Jun. 30, 2015

Changes in Non-Cash Working Capital [Abstract]

Summary of changes in non-cash working capital

	Nine Months Ended			Nine Months Ended
	June 30, 2015			June 30, 2014
Accounts receivable	$	823,334			(471,814	)
Prepaid expenses		(5,582	)		123,548
Accounts payable		(541,280	)		(245,530	)
	$	276,472			(593,796	)

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Capitalization of Costs Incurred in Oil and Gas Activities (Details) - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Summary of capitalized costs relating to oil and gas producing activities
Unproved Oil and Gas Properties	$ 19,671,471	$ 19,651,296
Proved Oil and Gas Properties	4,568	4,568
Accumulated Depreciation and Depletion	(62,614)	(51,814)
Net Capitalized Cost	$ 19,613,425	$ 19,604,050

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Stock Options (Details) - Jun. 30, 2015 - $ / shares	Total
Summary of stock options
Shares Underlying Options Outstanding	12,430,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	3 years 7 months 2 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.26
Shares Underlying Options Exercisable	7,760,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.20
$0.14 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	900,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	8 months 23 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.14
Shares Underlying Options Exercisable	900,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.14
$0.05 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	3,450,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	2 years 11 months 23 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.05
Shares Underlying Options Exercisable	3,450,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.05
$0.30 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	250,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	3 years 3 months 29 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.30
Shares Underlying Options Exercisable	250,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.30
$0.34 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	450,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	3 years 5 months 5 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.34
Shares Underlying Options Exercisable	300,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.34
$0.38 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	6,780,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	4 years 2 months 19 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.38
Shares Underlying Options Exercisable	2,660,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.38
$0.23 at June 30, 2015 [Member] | Employee Stock Option [Member]
Summary of stock options
Shares Underlying Options Outstanding	600,000
Shares Underlying Options Outstanding, Weighted Average Remaining Contractual Life	4 years 4 months 21 days
Shares Underlying Options Outstanding, Weighted Average Exercise Price	$ 0.23
Shares Underlying Options Exercisable	200,000
Shares Underlying Options Exercisable, Weighted Average Exercise Price	$ 0.23

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Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2015	Sep. 30, 2014
Current Assets
Cash and cash equivalents	$ 2,023,228	$ 2,324,755
Accounts receivable net of allowance of $Nil (September 30, 2014 - $Nil)	226,765	1,050,099
Prepaid expenses	49,457	43,875
Total Current Assets	2,299,450	3,418,729
Long term investments	372,571	409,618
Oil and gas properties, net, based on successful efforts method of accounting	19,613,425	19,604,050
Property and equipment, net	217,697	259,198
TOTAL ASSETS	22,503,143	23,691,595
Current Liabilities
Accounts payable and accrued liabilities	182,794	714,198
Accounts payable and accrued liabilities- related parties	7,101	16,977
Total Current Liabilities	189,895	731,175
Asset retirement obligations (Note 10)	435,415	469,013
TOTAL LIABILITIES	625,310	1,200,188
SHAREHOLDERS' EQUITY
Common Stock: (Note 11) Authorized: 600,000,000 shares at $0.001 par value Issued and outstanding: 229,374,605 shares (September 30, 2014 - 229,326,987 shares)	229,374	229,326
Additional paid in capital	41,911,156	41,040,447
Accumulated Deficit	(20,262,697)	(18,778,366)
Total Shareholders' Equity	21,877,833	22,491,407
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 22,503,143	$ 23,691,595

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Property and Equipment (Details Textual) - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Property and Equipment (Textual)
Depreciation expense	$ 41,501	$ 54,361

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Nature of Business and Basis of Presentation

9 Months Ended

Jun. 30, 2015

Nature of Business and Basis of Presentation [Abstract]

NATURE OF BUSINESS AND BASIS OF PRESENTATION

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Deep Well Oil & Gas, Inc. was originally incorporated on July 18, 1988 under the laws of the state of Nevada as Worldwide Stock Transfer, Inc. (Worldwide Stock Transfer, Inc. later changed its name to Allied Devices Corporation) and in connection with a plan of reorganization, effective on September 10, 2003, the company was reorganized and changed its name to Deep Well Oil & Gas, Inc. (“Deep Well”).

These consolidated financial statements have been prepared showing the name “Deep Well Oil & Gas, Inc. (and Subsidiaries)” (“the Company”) and the post-split common stock, with $0.001 par value.

Basis of Presentation

The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading.

These interim condensed consolidated financial statements follow the same significant accounting policies and methods of application as the Company’s annual consolidated financial statements for the year ended September 30, 2014.

These statements reflect all adjustments, consisting solely of normal recurring adjustments (unless otherwise disclosed) which, in the opinion of management, are necessary for a fair presentation of the information contained therein. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2014.

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Legal Actions (Details)	Mar. 10, 2005 CAD
I.G.M. Resources Corp [Member]
Legal Action (Textual)
Compensation amount dismissed by court	CAD 15,000,000

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Nature of Business and Basis of Presentation (Details) - $ / shares	Jun. 30, 2015	Sep. 30, 2014
Nature of Business and Basis of Presentation (Textual)
Common stock, par value	$ 0.001	$ 0.001

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Subsequent Events

9 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent events

17. Subsequent events

On July 27, 2015, the Company renewed its Edmonton office lease commencing effective on July 1, 2015 and expiring on June 30, 2017. The quarterly payments due in Cdn dollars are as follows:

2015 Q4 (July - September)	7,969
2016 Q1 (October - December)	7,969
2016 Q2 (January - March)	7,969
2016 Q3 (April - June)	7,969
2016 Q4 (July - September)	7,969
2017 Q1 (October - December)	7,969
2017 Q2 (January - March)	7,969
2017 Q3 (April - June)	7,969

On July 28, 2015, the Company’s Board approved the extension of the expiration date of some warrants to purchase shares of the Company’s common stock. The exercise price of the warrants remained unchanged at $0.105 per share. As a result of this extension, the expiration dates of the warrants were amended from the original expiry date of November 23, 2015 to November 23, 2016, with all other terms of the original warrants remaining in full force and effect. In consideration of extending the expiry date of this series of warrants, the number of outstanding warrants was reduced from 71,857,141 to 52,155,221 common share purchase warrants.

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Summary of Significant Accounting Policies (Details)	Jun. 30, 2015
Software [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	100.00%
Computer equipment [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	55.00%
Portable work camp [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	30.00%
Vehicles [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	30.00%
Road Mats [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	30.00%
Wellhead [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	25.00%
Office furniture and equipment [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	20.00%
Oilfield Equipment [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	20.00%
Tanks [Member]
Summary of the depreciation rates used in computing depreciation expense
Depreciation percentage in depreciation expense	10.00%

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Jun. 30, 2015

Summary of Significant Accounting Policies [Abstract]

Summary of depreciation rates used in computing depreciation expense

	%
Software		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

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Summary of Significant Accounting Policies

9 Months Ended

Jun. 30, 2015

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

These condensed consolidated financial statements include the accounts of two wholly owned subsidiaries: (1) Northern Alberta Oil Ltd. (“Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd., incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005. All inter-company balances and transactions have been eliminated.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Allowance for Doubtful Accounts

The Company determines allowances for doubtful accounts based on aging of specific accounts. Accounts receivable are stated at the historical carrying amounts net of allowances for doubtful accounts and include only the amounts the Company deems to be collectable. The allowance for bad debts was $nil and $nil at June 30, 2015 and September 30, 2014, respectively.

Crude oil and natural gas properties

The Company uses the successful efforts method of accounting for crude oil and natural gas properties whereby costs incurred to acquire mineral interests in crude oil and natural gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells, and expenditures for enhanced recovery operations are capitalized. Geological and geophysical costs, seismic costs incurred for exploratory projects, lease rentals and costs associated with unsuccessful exploratory wells or projects are expensed as incurred. Costs of seismic studies that are utilized in development drilling within an area of proved reserves are capitalized as development costs. To the extent a seismic project covers areas of both developmental and exploratory drilling, those seismic costs are proportionately allocated between capitalized development costs and exploration expense. Maintenance, repairs and costs of injection are expensed as incurred, except that the costs of replacements or renewals that expand capacity or improve production are capitalized.

Under the successful efforts method of accounting, the Company capitalizes exploratory drilling, equipping and facility costs on the balance sheet pending determination of whether the project has found proved reserves in economically producible quantities. The Company capitalizes costs associated with the acquisition or construction of support equipment and facilities with the drilling and development costs to which they relate. If proved reserves are assigned to a project, the associated capitalized costs become part of well equipment and facilities. However, if proved reserves are not found in a project, the capitalized costs associated with the project are expensed, net of any salvage value. Total capitalized costs pending the determination of proved reserves were approximately $19.6 million and $19.6 million at June 30, 2015 and September 30, 2014, respectively.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. Only half of the depreciation rate is taken in the year of acquisition. The following is a summary of the depreciation rates used in computing depreciation expense:

	%
Software		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

Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred. Leasehold improvements are amortized over the greater of five years or the remaining life of the lease agreement.

Long-Lived Assets

Oil and Gas Properties - Proved crude oil and natural gas properties are reviewed for impairment on a field-by-field basis each quarter, or when events and circumstances indicate a possible decline in the recoverability of the carrying value of such field. The estimated future cash flows expected in connection with the field are compared to the carrying amount of the field to determine if the carrying amount is recoverable. If the carrying amount of the field exceeds its estimated undiscounted future cash flows, the carrying amount of the field is reduced to its estimated fair value. Due to the unavailability of relevant comparable market data, a discounted cash flow method is used to determine the fair value of proved properties. The discounted cash flow method estimates future cash flows based on management’s estimates of future crude oil and natural gas production, commodity prices based on commodity futures price strips, operating and development costs, and a risk-adjusted discount rate.

Non-producing crude oil and natural gas properties primarily consist of undeveloped leasehold costs and costs associated with the purchase of certain proved undeveloped reserves. Individually significant non-producing properties, if any, are assessed for impairment on a property-by-property basis and, if the assessment indicates an impairment, a loss is recognized by providing a valuation allowance consistent with the level at which impairment was assessed. For individually insignificant non-producing properties, impairment losses are recognized by amortizing the portion of the properties’ costs which management estimates will not be transferred to proved properties over the lives of the leases based on experience of successful drilling and the average holding period. The Company’s impairment assessments are affected by economic factors such as the results of exploration activities, commodity price outlooks, anticipated drilling programs, remaining lease terms, and potential shifts in business strategy employed by management.

Non Oil and Gas Assets - The Company reviews for the impairment of long-lived assets annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment is measured as the amount by which the assets’ carrying value exceeds its fair value. No impairments to the Company’s long-lived assets were identified or recorded in the nine months ended June 30, 2015 or in the fiscal year ended September 30, 2014.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization of capitalized drilling and development costs of producing crude oil and natural gas properties, including related support equipment and facilities, are computed using the unit-of-production method on a field basis based on total estimated proved developed crude oil and natural gas reserves. Amortization of producing leaseholds is based on the unit-of-production method using total estimated proved reserves. In arriving at rates under the unit-of-production method, the quantities of recoverable crude oil and natural gas reserves are established based on estimates made by the Company’s internal geologists and engineers and external independent reserve engineers. Upon sale or retirement of properties, the cost and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss, if any, is recognized. Unit of production rates are revised whenever there is an indication of a need, but at least in conjunction with annual reserve reports. Revisions are accounted for prospectively as changes in accounting estimates.

Asset Retirement Obligations

The Company accounts for asset retirement obligations by recording the fair value of the estimated future cost of the Company’s plugging and abandonment obligations. The asset retirement obligation is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to oil and gas production and well operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, depletion, and amortization. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the asset retirement cost.

Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. As at June 30, 2015 and September 30, 2014, asset retirement obligations amount to $435,415 and $469,013, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the cost of abandonment and reclamation to be.

Foreign Currency Translation

The functional currency of the Canadian subsidiaries is the United States dollar. However, the Canadian subsidiaries transact in Canadian dollars. Consequently, monetary assets and liabilities are remeasured into United States dollars at the exchange rate on the balance sheet date and non-monetary items are remeasured at the rate of exchange in effect when the assets are acquired or obligations incurred. Revenues and expenses are remeasured at the average exchange rate prevailing during the period. Foreign currency transaction gains and losses are included in results of operations.

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Financial, Concentration and Credit Risk

The Company does not have any concentration or related financial credit risk related to cash as most of the Company’s funds are maintained in a financial institution which has its deposits fully guaranteed by the Government of Alberta.

The Company is not directly subject to credit risk resulting from the concentration of its crude oil sales. For the period ending June 30, 2015 and for the year ended September 30, 2014, the Company has recorded oil sales received from the operator of the Company’s producing properties. The Company’s joint venture partner is the operator of the Company’s producing properties and it is the Company’s joint venture partner who sells 100% of the Company’s oil production to one or more purchasers in the oil and gas industry. The Company does not require collateral and management periodically evaluates the operator’s financial statements and the collectability of oil sales receivables from the operator and believes that the Company’s oil sales receivables are fully collectable and that the risk of loss is minimal.

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Due to the uncertainty regarding the Company’s profitability, a valuation allowance has been recorded against the future tax benefits of its losses and no net benefit has been recorded in the consolidated financial statements.

Revenue Recognition

The Company is in the business of exploring for, developing, producing, and selling crude oil. Crude oil revenue is recognized when the product is taken from the storage tanks on the lease and delivered to the purchaser and title transfers to the purchaser. Payment is generally received one to three months after the sale has occurred.

Occasionally the Company may sell specific leases, and the gain or loss associated with these transactions will be shown separately from the profit or loss from the operations or sales of oil products. Such gain or losses will be measured and recognized when all of the following have occurred: (1) there is persuasive evidence of an arrangement to sell; (2) the price of the sale is fixed or determinable; (3) the title to the lease has transferred; and (4) collection is reasonably assured.

Advertising and Market Development

The Company expenses advertising and market development costs as incurred.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were 1,855,000 common stock equivalents excluded from the calculation because their effect would be antidilutive.

Financial Instruments

Financial instruments include cash and cash equivalents, accounts receivable, long term investments, investment in equity securities, accounts payable and accounts payable - related parties. The fair value of these financial instruments approximates their carrying value 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.

Environmental Requirements

At the report date, environmental requirements related to the oil properties acquired are unknown and therefore an estimate of any future cost cannot be made.

Share-Based Compensation

The Company accounts for stock options granted to directors, officers, employees and non-employees using the fair value method of accounting. The fair value of stock options for directors, officers and employees are calculated at the date of grant and is expensed over the vesting period of the options on a straight-line basis. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date at which the performance commitment is reached. The Company uses the Black-Scholes model to calculate the fair value of stock options issued, which requires certain assumptions to be made at the time the options are awarded, including the expected life of the option, the expected number of granted options that will vest and the expected future volatility of the stock. The Company reflects estimates of award forfeitures at the time of grant and revises in subsequent periods, if necessary, when forfeiture rates are expected to change.

Recently Adopted Accounting Standards

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company's financial statements.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing these consolidated financial statements.

Significant estimates by management include valuations of oil properties, valuation of accounts receivable, useful lives of long-lived assets, asset retirement obligations, valuation of share-based compensation, and the realizability of future income taxes.

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) None in scaling factor is -9223372036854775296	Jun. 30, 2015	Sep. 30, 2014
Balance Sheets [Abstract]
Allowance related to accounts receivable
Common stock, shares authorized	600,000,000	600,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	229,374,605	229,326,987
Common stock, shares outstanding	229,374,605	229,326,987

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Stock Options

9 Months Ended

Jun. 30, 2015

Stock Options [Abstract]

STOCK OPTIONS

12. STOCK OPTIONS

On November 28, 2005, and as amended on December 4, 2014, the Board of Deep Well adopted the Deep Well Oil & Gas, Inc. Stock Option Plan (the “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.

The maximum number of shares, which may be reserved for issuance under the Plan, may not exceed 10% of the Company’s issued and outstanding Common Shares, subject to adjustment as contemplated by the Plan. The aggregate number of Common Shares with respect to which options may be vested to any one person (together with their associates) under the plan, together with all other incentive plans of the Company in any one year shall not exceed 2% of the total number of Common Shares outstanding, and in total may not exceed 6% of the total number of Common Shares outstanding.

Prior to October 1, 2013, the Company had a total of 4,350,000 options outstanding, that were previously granted to directors, consultants and an employee of the Company on March 23, 2011 and June 20, 2013, to purchase up to 3,450,000 and 900,000 shares, respectively, each of common stock at exercise prices ranging from $0.14 to $0.05, respectively, of which a total of 950,000 options granted on June 20, 2013 remain unvested.

On October 28, 2013, the Company granted a contractor 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 Farmout Agreement dated July 31, 2013.

On December 4, 2013, the Company appointed a new director to its Board and in connection with the appointment the Company granted the new director an option to purchase 450,000 shares each of common stock at an exercise price of $0.34 per Common Share, 150,000 vesting immediately and the remaining vesting one-third on December 4, 2014, and one-third on December 4, 2015, with a five-year life.

On September 19, 2014, the Company granted seven of its directors options to purchase 600,000 shares each of common stock at an exercise price of $0.38 per Common Share, 200,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.

On September 19, 2014, the Company granted two consultants an option to purchase each 1,200,000 shares each of common stock at an exercise price of $0.38 per Common Share, 600,000 vesting immediately and remaining vesting on September 19, 2015.

On September 19, 2014, the Company granted one employee an option to purchase 180,000 shares each of common stock at an exercise price of $0.38 per Common Share, 60,000 vesting immediately and the remaining vesting one-third on September 19, 2015, and one-third on September 19, 2016, with a five-year life.

On November 17, 2014, the Company appointed a new director to its Board and in connection with the appointment the Company granted the new director an option to purchase 600,000 shares each of common stock at an exercise price of $0.23 per Common Share, 200,000 vesting immediately and the remaining vesting one-third on November 17, 2015, and one-third on November 17, 2016, with a five-year life.

For the period ended June 30, 2015, the Company recorded share based compensation expense related to stock options in the amount of $865,756 (June 30, 2014 – $239,480) on the stock options that were previously granted. As of June 30, 2015, there was remaining unrecognized compensation cost of $491,074 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 June 30, 2015		900,000		0.73	$	0.14		900,000	$	0.14
$0.05 at June 30, 2015		3,450,000		2.98		0.05		3,450,000		0.05
$0.30 at June 30, 2015		250,000		3.33		0.30		250,000		0.30
$0.34 at June 30, 2015		450,000		3.43		0.34		300,000		0.34
$0.38 at June 30, 2015		6,780,000		4.22		0.38		2,660,000		0.38
$0.23 at June 30, 2015		600,000		4.39		0.23		200,000		0.23
		12,430,000		3.59	$	0.26		7,760,000	$	0.20

The aggregate intrinsic value of exercisable options as of June 30, 2015, was $Nil (September 30, 2014 - $0.11).

The following is a summary of stock option activity as at June 30, 2015:

	Number of Underlying Shares		Weighted Average Exercise Price		Weighted Average Fair Market Value
Balance, September 30, 2014		11,830,000	$	0.26	$	0.21
Balance, June 30, 2015		12,430,000	$	0.26	$	0.21
Exercisable, June 30, 2015		7,760,000	$	0.20	$	0.16

A summary of the options granted at June 30, 2015 and September 30, 2014 and changes during the periods then ended is presented below:

	June 30, 2015				September 30, 2014
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding balance at beginning of period		11,830,000	$	0.26		900,000	$	0.14
		–		–		3,450,000		0.05
Granted- October 28, 2013		–		–		250,000		0.30
Granted- December 4, 2013		–		–		450,000		0.34
Granted- September 19, 2014		–		–		6,780,000		0.38
Granted- November 17, 2014		600,000		0.38		–		–
Vested- November 17, 2014		200,000		0.38		–		–
Vested- December 4, 2014		150,000		0.34		–		–
Vested- June 20, 2015		950,000		0.05		–		–
Outstanding at end of period		12,430,000	$	0.26		11,830,000	$	0.26
Exercisable		7,760,000		0.20		6,460,000		0.21

There were 4,670,000 unvested stock options outstanding as of June 30, 2015 (September 30, 2014 – 5,370,000).

Measurement Uncertainty for Stock Options

The Company used the Black-Scholes option 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. The stock options that are granted to employees and directors and the warrants attached to the units issued by the Company are non-transferable and some vest over time, and all 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:

Expected Term – Expected term of 5 years represents the period that the Company’s stock-based awards are expected to be outstanding.

Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used ranged from 96% to 122%.

Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future.

Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used ranged from 0.62% to 1.83%.

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Document and Entity Information - Jun. 30, 2015 - shares	Total
Document and Entity Information [Abstract]
Entity Registrant Name	DEEP WELL OIL & GAS INC
Entity Central Index Key	0000869495
Trading Symbol	DWOG
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock Shares Outstanding	229,374,605

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Changes in Non-Cash Working Capital

9 Months Ended

Jun. 30, 2015

Changes in Non-Cash Working Capital [Abstract]

CHANGES IN NON-CASH WORKING CAPITAL

13. CHANGES IN NON-CASH WORKING CAPITAL

	Nine Months Ended			Nine Months Ended
	June 30, 2015			June 30, 2014
Accounts receivable	$	823,334			(471,814	)
Prepaid expenses		(5,582	)		123,548
Accounts payable		(541,280	)		(245,530	)
	$	276,472			(593,796	)

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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statements of Operations and Comprehensive Income (Loss) [Abstract]
Revenue	$ 219,346		$ 449,147
Royalty expenses	(11,127)		(23,512)
Revenue, net of royalty	208,219		425,635
Expenses
Operating expenses	425,684		1,540,206
Operating expenses covered by Farmout (Note 3)	(217,465)		(1,114,571)
General and administrative	337,016	$ 55,031	1,434,203	$ 862,245
Depreciation, accretion and depletion	21,721	25,790	64,541	74,315
Net loss from operations	(358,737)	(80,821)	(1,498,744)	(936,560)
Other income and expenses
Rental and other income	3,432	4,347	10,635	15,813
Interest income	$ 1,081	2,091	$ 3,778	9,009
Loss on disposal of assets		387		387
Net loss and comprehensive loss	$ (354,224)	$ (73,996)	$ (1,484,331)	$ (911,351)
Net loss per common share
Basic and Diluted	$ 0	$ 0	$ 0	$ 0
Weighted Average Outstanding Shares (in thousands)
Basic and Diluted	229,374	229,326	229,374	229,326

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Property and Equipment

9 Months Ended

Jun. 30, 2015

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

7. PROPERTY AND EQUIPMENT

	June 30, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,197	$	31,723	$	474
Office furniture and equipment		34,130		28,055		6,075
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		151,764		18,816
Vehicles		38,077		33,861		4,216
Oilfield equipment		249,046		152,133		96,913
Road mats		364,614		324,245		40,369
Wellhead		3,254		2,278		976
Tanks		96,085		46,227		49,858
	$	998,745	$	781,048	$	217,697

	September 30, 2014
			Accumulated		Net Book
	Cost		Depreciation		Value
Computer equipment	$	32,198	$	31,264	$	934
Office furniture and equipment		34,130		26,880		7,250
Software		5,826		5,826		–
Leasehold improvements		4,936		4,936		–
Portable work camp		170,580		146,211		24,369
Vehicles		38,077		32,637		5,440
Oilfield equipment		249,045		135,030		114,015
Road mats		364,614		312,525		52,089
Wellhead		3,254		2,053		1,201
Tanks		96,085		42,185		53,900
	$	998,745	$	739,547	$	259,198

There was $41,501 of depreciation expense for the period ended June 30, 2015 (June 30, 2014 - $54,361).

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Investment in Equity Securities

9 Months Ended

Jun. 30, 2015

Investment in Equity Securities [Abstract]

INVESTMENT IN EQUITY SECURITIES

6. INVESTMENT IN EQUITY SECURITIES

On February 25, 2005, the Company acquired an interest in Signet Energy Inc. (“Signet” formerly Surge Global Energy, Inc.) as a result of a Farmout Agreement dated February 25, 2005. Signet amalgamated with Andora Energy Corporation (“Andora”) in 2007.

As of November 19, 2008, the Company converted its Signet shares into 2,241,558 shares of Andora, which represents an equity interest in Andora of approximately 2.24% as of December 31, 2014, which is Andora’s fiscal year end. These shares are carried at a nominal value using the cost method and their value is included under oil and gas properties on the Company’s balance sheet.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2015

Summary of Significant Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation

These condensed consolidated financial statements include the accounts of two wholly owned subsidiaries: (1) Northern Alberta Oil Ltd. (“Northern”) from the date of acquisition, being June 7, 2005, incorporated under the Business Corporations Act (Alberta), Canada; and (2) Deep Well Oil & Gas (Alberta) Ltd., incorporated under the Business Corporations Act (Alberta), Canada on September 15, 2005. All inter-company balances and transactions have been eliminated.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The Company determines allowances for doubtful accounts based on aging of specific accounts. Accounts receivable are stated at the historical carrying amounts net of allowances for doubtful accounts and include only the amounts the Company deems to be collectable. The allowance for bad debts was $nil and $nil at June 30, 2015 and September 30, 2014, respectively.

Crude oil and natural gas properties

Crude oil and natural gas properties

The Company uses the successful efforts method of accounting for crude oil and natural gas properties whereby costs incurred to acquire mineral interests in crude oil and natural gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells, and expenditures for enhanced recovery operations are capitalized. Geological and geophysical costs, seismic costs incurred for exploratory projects, lease rentals and costs associated with unsuccessful exploratory wells or projects are expensed as incurred. Costs of seismic studies that are utilized in development drilling within an area of proved reserves are capitalized as development costs. To the extent a seismic project covers areas of both developmental and exploratory drilling, those seismic costs are proportionately allocated between capitalized development costs and exploration expense. Maintenance, repairs and costs of injection are expensed as incurred, except that the costs of replacements or renewals that expand capacity or improve production are capitalized.

Under the successful efforts method of accounting, the Company capitalizes exploratory drilling, equipping and facility costs on the balance sheet pending determination of whether the project has found proved reserves in economically producible quantities. The Company capitalizes costs associated with the acquisition or construction of support equipment and facilities with the drilling and development costs to which they relate. If proved reserves are assigned to a project, the associated capitalized costs become part of well equipment and facilities. However, if proved reserves are not found in a project, the capitalized costs associated with the project are expensed, net of any salvage value. Total capitalized costs pending the determination of proved reserves were approximately $19.6 million and $19.6 million at June 30, 2015 and September 30, 2014, respectively.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed using the declining balance method over the estimated useful life of the asset. Only half of the depreciation rate is taken in the year of acquisition. The following is a summary of the depreciation rates used in computing depreciation expense:

	%
Software		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

Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred. Leasehold improvements are amortized over the greater of five years or the remaining life of the lease agreement.

Long-Lived Assets

Long-Lived Assets

Oil and Gas Properties - Proved crude oil and natural gas properties are reviewed for impairment on a field-by-field basis each quarter, or when events and circumstances indicate a possible decline in the recoverability of the carrying value of such field. The estimated future cash flows expected in connection with the field are compared to the carrying amount of the field to determine if the carrying amount is recoverable. If the carrying amount of the field exceeds its estimated undiscounted future cash flows, the carrying amount of the field is reduced to its estimated fair value. Due to the unavailability of relevant comparable market data, a discounted cash flow method is used to determine the fair value of proved properties. The discounted cash flow method estimates future cash flows based on management’s estimates of future crude oil and natural gas production, commodity prices based on commodity futures price strips, operating and development costs, and a risk-adjusted discount rate.

Non-producing crude oil and natural gas properties primarily consist of undeveloped leasehold costs and costs associated with the purchase of certain proved undeveloped reserves. Individually significant non-producing properties, if any, are assessed for impairment on a property-by-property basis and, if the assessment indicates an impairment, a loss is recognized by providing a valuation allowance consistent with the level at which impairment was assessed. For individually insignificant non-producing properties, impairment losses are recognized by amortizing the portion of the properties’ costs which management estimates will not be transferred to proved properties over the lives of the leases based on experience of successful drilling and the average holding period. The Company’s impairment assessments are affected by economic factors such as the results of exploration activities, commodity price outlooks, anticipated drilling programs, remaining lease terms, and potential shifts in business strategy employed by management.

Non Oil and Gas Assets - The Company reviews for the impairment of long-lived assets annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. Impairment is measured as the amount by which the assets’ carrying value exceeds its fair value. No impairments to the Company’s long-lived assets were identified or recorded in the nine months ended June 30, 2015 or in the fiscal year ended September 30, 2014.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization of capitalized drilling and development costs of producing crude oil and natural gas properties, including related support equipment and facilities, are computed using the unit-of-production method on a field basis based on total estimated proved developed crude oil and natural gas reserves. Amortization of producing leaseholds is based on the unit-of-production method using total estimated proved reserves. In arriving at rates under the unit-of-production method, the quantities of recoverable crude oil and natural gas reserves are established based on estimates made by the Company’s internal geologists and engineers and external independent reserve engineers. Upon sale or retirement of properties, the cost and related accumulated depreciation, depletion and amortization are eliminated from the accounts and the resulting gain or loss, if any, is recognized. Unit of production rates are revised whenever there is an indication of a need, but at least in conjunction with annual reserve reports. Revisions are accounted for prospectively as changes in accounting estimates.

Asset Retirement Obligations

Asset Retirement Obligations

The Company accounts for asset retirement obligations by recording the fair value of the estimated future cost of the Company’s plugging and abandonment obligations. The asset retirement obligation is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to oil and gas production and well operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, depletion, and amortization. If the fair value of the estimated asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the asset retirement cost.

Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling asset retirement obligations. As at June 30, 2015 and September 30, 2014, asset retirement obligations amount to $435,415 and $469,013, respectively. The Company has posted bonds, where required, with the Government of Alberta based on the amount the government estimates the cost of abandonment and reclamation to be.

Foreign Currency Translation

Foreign Currency Translation

The functional currency of the Canadian subsidiaries is the United States dollar. However, the Canadian subsidiaries transact in Canadian dollars. Consequently, monetary assets and liabilities are remeasured into United States dollars at the exchange rate on the balance sheet date and non-monetary items are remeasured at the rate of exchange in effect when the assets are acquired or obligations incurred. Revenues and expenses are remeasured at the average exchange rate prevailing during the period. Foreign currency transaction gains and losses are included in results of operations.

Accounting Methods

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Financial, Concentration and Credit Risk

Financial, Concentration and Credit Risk

The Company does not have any concentration or related financial credit risk related to cash as most of the Company’s funds are maintained in a financial institution which has its deposits fully guaranteed by the Government of Alberta.

The Company is not directly subject to credit risk resulting from the concentration of its crude oil sales. For the period ending June 30, 2015 and for the year ended September 30, 2014, the Company has recorded oil sales received from the operator of the Company’s producing properties. The Company’s joint venture partner is the operator of the Company’s producing properties and it is the Company’s joint venture partner who sells 100% of the Company’s oil production to one or more purchasers in the oil and gas industry. The Company does not require collateral and management periodically evaluates the operator’s financial statements and the collectability of oil sales receivables from the operator and believes that the Company’s oil sales receivables are fully collectable and that the risk of loss is minimal.

Income Taxes

Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Due to the uncertainty regarding the Company’s profitability, a valuation allowance has been recorded against the future tax benefits of its losses and no net benefit has been recorded in the consolidated financial statements.

Revenue Recognition

Revenue Recognition

The Company is in the business of exploring for, developing, producing, and selling crude oil. Crude oil revenue is recognized when the product is taken from the storage tanks on the lease and delivered to the purchaser and title transfers to the purchaser. Payment is generally received one to three months after the sale has occurred.

Occasionally the Company may sell specific leases, and the gain or loss associated with these transactions will be shown separately from the profit or loss from the operations or sales of oil products. Such gain or losses will be measured and recognized when all of the following have occurred: (1) there is persuasive evidence of an arrangement to sell; (2) the price of the sale is fixed or determinable; (3) the title to the lease has transferred; and (4) collection is reasonably assured.

Advertising and Market Development

Advertising and Market Development

The Company expenses advertising and market development costs as incurred.

Basic and Diluted Net Income (Loss) Per Share

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights, unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. There were 1,855,000 common stock equivalents excluded from the calculation because their effect would be antidilutive.

Financial Instruments

Financial Instruments

Financial instruments include cash and cash equivalents, accounts receivable, long term investments, investment in equity securities, accounts payable and accounts payable - related parties. The fair value of these financial instruments approximates their carrying value 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.

Environmental Requirements

Environmental Requirements

At the report date, environmental requirements related to the oil properties acquired are unknown and therefore an estimate of any future cost cannot be made.

Share-Based Compensation

Share-Based Compensation

The Company accounts for stock options granted to directors, officers, employees and non-employees using the fair value method of accounting. The fair value of stock options for directors, officers and employees are calculated at the date of grant and is expensed over the vesting period of the options on a straight-line basis. For non-employees, the fair value of the options is measured on the earlier of the date at which the counterparty performance is complete or the date at which the performance commitment is reached. The Company uses the Black-Scholes model to calculate the fair value of stock options issued, which requires certain assumptions to be made at the time the options are awarded, including the expected life of the option, the expected number of granted options that will vest and the expected future volatility of the stock. The Company reflects estimates of award forfeitures at the time of grant and revises in subsequent periods, if necessary, when forfeiture rates are expected to change.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company's financial statements.

Estimates and Assumptions

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used in preparing these consolidated financial statements.

Significant estimates by management include valuations of oil properties, valuation of accounts receivable, useful lives of long-lived assets, asset retirement obligations, valuation of share-based compensation, and the realizability of future income taxes.

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Commitments

9 Months Ended

Jun. 30, 2015

Commitments [Abstract]

COMMITMENTS

14. COMMITMENTS

Compensation to Directors

Since the acquisition of Northern Alberta Oil Ltd., the Company and Northern have entered into the following contracts with the following companies for the services of their officers:

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 per month. On July 1, 2005, the Company entered 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 amend (the “Amending Agreement”) the Prior Agreement whereby the following was settled and amended:

i.	Effective date of the Amending Agreement will be June 20, 2013;
ii.	Term of Agreement will be until December 31, 2014;
iii.	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, which was the market price at that time. One half of these shares were vested immediately and the remaining one half vested on June 20, 2014;
iv.	The Consultant received:

a.	Cdn $70,000, and
b.	850,000 units of the Company’s shares and warrants at a price of $0.05 per unit, which was the market price at the time. 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.

As consideration for the execution of the Amending Agreement and the Termination of parts of the Prior Agreement, and waiving Cdn $239,528 accrued by the Company as owing to Portwest.

In the June 30, 2015 quarter end period, no fees were owed or paid to Portwest. As of September 30, 2013, the Company had settled all outstanding amounts owed to Portwest.

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 per month. As of June 30, 2015, the Company did not owe Concorde Consulting any of this amount.

Rental Agreement

See Note 17 subsequent events.

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Asset Retirement Obligations

9 Months Ended

Jun. 30, 2015

Asset Retirement Obligations [Abstract]

ASSET RETIREMENT OBLIGATIONS

10. ASSET RETIREMENT OBLIGATIONS

The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At June 30, 2015, the Company estimates the undiscounted cash flows related to asset retirement obligation to total approximately $622,593 (September 30, 2014 - $ 689,445). The fair value of the liability at June 30, 2015 is estimated to be $435,415 (September 30, 2014 - $ 469,013) 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.

Changes to the asset retirement obligation were as follows:

	June 30, 2015			September 30, 2014
Balance, beginning of period	$	469,013		$	446,155
Liabilities incurred		–			73,395
Effect of foreign exchange		(45,837	)		(64,079	)
Disposal		–			(4,045	)
Accretion expense		12,239			17,587
Balance, end of period	$	435,415		$	469,013

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Crude Oil and Natural Gas Property Information (Details) - CANADA [Member] - USD ($)	9 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Results of Operations for Oil and Gas Producing Activities, by Geographic Area [Line Items]
Oil sales after royalties	$ 425,635		$ 47,116
Production (Operating) expenses	(425,635)		(47,115)
Exploration expenses	(27,356)		(47,182)
Depreciation, accretion and depletion	(62,907)		(97,646)
Oil sales less expenses	$ (90,263)		$ (144,827)
Income tax expenses
Results of operations from producing activities	$ (90,263)		$ (144,827)

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Long Term Investments

9 Months Ended

Jun. 30, 2015

Long Term Investments [Abstract]

LONG TERM INVESTMENTS

8. LONG TERM INVESTMENTS

Long term investments consist of cash held in trust by the AER which bears interest at a rate of prime minus 0.375% and has no stated date of maturity. These investments are required by the AER to ensure there are sufficient future cash flows to meet the expected future asset retirement obligations and are restricted for this purpose.

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Significant Transactions With Related Parties

9 Months Ended

Jun. 30, 2015

Significant Transactions With Related Parties [Abstract]

SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

9. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Accounts payable – related parties was $7,101 as of June 30, 2015 (September 30, 2014 - $16,977) for expenses to be reimbursed to directors. This amount is unsecured, non-interest bearing, and has no fixed terms of repayment.

As of June 30, 2015, officers, directors, their families, and their controlled entities have acquired 53.63% of the Company’s outstanding common capital stock. This percentage does not include unexercised warrants or stock options.

The Company incurred expenses $112,590 to one related party, Concorde Consulting, an entity controlled by a director, for professional fees and consulting services provided to the Company during the period ended June 30, 2015 (June 30, 2014 - $124,997). These amounts were fully paid as of June 30, 2015.

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Common Stock

9 Months Ended

Jun. 30, 2015

Common Stock [Abstract]

Common Stock

11. COMMON STOCK

As of June 30, 2015, the Company had outstanding approximately 229,374,605 shares of common stock.

Warrants

On June 23, 2014, 47,618 common share purchase warrants were transferred to a non-related party. 

On October 3, 2014, a warrant holder of the Company acquired 47,618 shares of the Company’s common stock, upon exercising warrants, at an exercise price of $0.105 per share of common stock for gross proceeds to the Company of $5,000.

The following table summarizes the Company’s warrants outstanding as of June 30, 2015:

	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 June 30, 2015		71,857,141		0.40		0.105		71,857,141		0.105
$0.075 at June 30, 2015		520,000		0.98		0.075		520,000		0.075
		72,377,141		0.40		0.105		72,377,141		0.105

The following is a summary of warrant activity for the period ended June 30, 2015:

	Number of Warrants		Weighted Average Exercise Price		Intrinsic Value
Balance, September 30, 2014		72,424,759	$	0.105	$	0.215
Cancelled		–		–		–
Granted		–		–		–
Exercised		47,618		0.105		–
Balance, June 30, 2015		72,377,141	$	0.105	$	–
Outstanding Warrants, June 30, 2015		72,377,141	$	0.105	$	–
Exercisable Warrants, June 30, 2015		72,377,141	$	0.105	$	–

There were 72,377,141 warrants outstanding as of June 30, 2015 (September 30, 2014 – 72,424,759), which have a historical fair market value of $1,738,336 (September 30, 2014 - $1,738,336).

Measurement Uncertainty for Warrants

The Company used the Black-Scholes option 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. The stock options that are granted to employees and directors and the warrants attached to the units issued by the Company are non-transferable and some vest over time, and all 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:

Expected Term – Expected term of 5 years represents the period that the Company’s stock-based awards are expected to be outstanding.

Expected Volatility – Expected volatilities are based on historical volatility of the Company’s stock, adjusted where determined by management for unusual and non-representative stock price activity not expected to recur. The expected volatility used ranged from 96% to 116%.

Expected Dividend – The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company currently pays no dividends and does not expect to pay dividends in the foreseeable future.

Risk-Free Interest rate – The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The risk-free rate used ranged from 0.62% to 1.31%.

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Subsequent Events (Details Textual) - Subsequent Event [Member] - $ / shares		1 Months Ended
	Jul. 28, 2015	Jul. 27, 2015
Subsequent Event [Textual]
Warrants expiration date	Nov. 23, 2016
Original Number of Warrants	71,857,141
Remaining Number of Warrants	52,155,221
Exercise price of warrant	$ 0.105
Lease expiration date		Jun. 30, 2017

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Subsequent Events (Tables)

9 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Summary of annual payments under office lease agreement

2015 Q4 (July - September)	7,969
2016 Q1 (October - December)	7,969
2016 Q2 (January - March)	7,969
2016 Q3 (April - June)	7,969
2016 Q4 (July - September)	7,969
2017 Q1 (October - December)	7,969
2017 Q2 (January - March)	7,969
2017 Q3 (April - June)	7,969

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Common Stock (Details 1) - Warrant [Member] - $ / shares	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Summary of warrant activity
Number of underlying shares, Beginning Balance	72,424,759
Number of Warrants, Warrants Cancelled
Number of Warrants, Warrants granted
Number of Warrants, Warrants Exercised	47,618
Number of underlying shares, Ending Balance	72,377,141
Outstanding Warrants, Number of Warrants	72,424,759	72,377,141
Exercisable Warrants, Number of Warrants	72,377,141
Weighted Average Exercise Price, Beginning balance	$ 0.105
Weighted Average Exercise Price, Warrants cancelled
Weighted Average Exercise Price, Warrants granted
Weighted Average Exercise Price, Warrants exercised	$ 0.105
Weighted Average Exercise Price, Ending balance	0.105
Outstanding Warrants, Weighted Average Exercise Price		$ 0.105
Exercisable Warrants, Weighted Average Exercise Price	0.105
Intrinsic Value, Beginning balance	$ 0.215
Intrinsic Value, Warrants cancelled
Intrinsic Value, Warrants granted
Intrinsic Value, Warrants exercised
Intrinsic Value, Balance, Ending balance
Outstanding Warrants, Intrinsic Value
Exercisable Warrants, Intrinsic Value

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Crude Oil and Natural Gas Property Information

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

CRUDE OIL AND NATURAL GAS PROPERTY INFORMATION

16. CRUDE OIL AND NATURAL GAS PROPERTY INFORMATION

Results of Operations from Oil and Gas Producing Activities

The following table sets forth the results of the Company’s operations from oil producing activities from the Company’s Sawn Lake oil sands properties located in Alberta, Canada, for the periods ending June 30, 2015 and 2014 and for the year ended September 30, 2014:

	June 30, 2015			June 30, 2014		September 30, 2014
Oil sales after royalties	$	425,635		$	–	$	47,116
Production (Operating) expenses		(425,635	)		–		(47,115	)
Exploration expenses		(27,356	)		–		(47,182	)
Depreciation, accretion and depletion		(62,907	)		–		(97,646	)
Oil sales less expenses		(90,263	)		–		(144,827	)
Income tax expenses		–			–		–
Results of operations from producing activities	$	(90,263	)	$	–	$	(144,827	)

For the periods ending June 30, 2015 and June 30, 2014, the Company booked oil revenue in the amount of $425,635 and $Nil, respectively, after deduction of royalties. For the periods ending June 30, 2015 and June 30, 2014, the volumes of oil delivered were booked to be 17,043 and Nil barrels, respectively, net to the Company, before royalties, with an average oil sales price of $26.35 per barrel for the period ending June 30, 2015. Operating expenses are zero since at this time they were paid for under the Farmout Agreement. Transportation costs are included in these operating costs. The total share of the material costs and operating expenses of the Company’s joint SAGD Project, has been funded in accordance with the Farmout Agreement, at a net cost to the Company of $Nil. As required by the Farmout Agreement, the Farmee has since paid Cdn $22.8 million to the operator of the SAGD Project for the Farmee’s share and the Company’s share of the capital costs and start-up operating expenses of the SAGD Project up to June 30, 2015. These costs include the capital costs of the drilling of the SAGD well pair; the purchase and transportation of equipment; installation and construction of the steam plant facility; testing and commissioning; the purchase of the water source and disposal wells and expenditures to connect these water wells with pipelines to the steam plant facility along with a fuel source tie-in pipeline; emulsion treatment package; Phase 2 front end costs; and the start-up operating expenses associated with the steaming and production of the SAGD well pair up to June 30, 2015.

Steam Assisted Gravity Drainage Demonstration Project

On July 30, 2013, the Company entered into a Steam Assisted Gravity Drainage Demonstration project (“SAGD Project”) to jointly participate in an AER approved SAGD Project on one section of land where the Company now has a 25% working interest (after the execution of the Farmout Agreement as defined below). The SAGD Project is located on section 30-91-12W5 of the Company’s Peace River oil sands properties located in North Central Alberta, Canada (also known as the Sawn Lake heavy oil reservoir). On August 15, 2013, and in accordance with the SAGD Project Agreement and the Amendment, the Company served notice (“Notice of Election”) to of the operator of the Company’s election to participate in the SAGD Project. Upon signing the Notice of Election the Company was required to pay in full the cash calls for the Company’s initial share of the capital costs of the SAGD Project and in accordance with a Farmout Agreement dated July 31, 2013 the Company has since paid all cash calls in full to the operator of the SAGD Project.

SAGD Project Phase 1 - The SAGD Project started with the first phase (“Phase 1”) consisting of the drilling and completion of one SAGD well pair, the construction of a facility for steam generation, water handling and oil treating, plus water source and disposal facilities, and pipelines to connect the source wells and fuel tie-in to the SAGD facility. This first phase included start-up steam operations of the SAGD facility with production commencing on September 16, 2014. The estimated capital costs to complete the SAGD Project steam plant facility with one SAGD well pair has been estimated by the operator to be Cdn $32.8 million on a 100% working interest basis, of which the Company’s share is covered under the Farmout Agreement (this estimate does not include start-up operating expenses to produce bitumen from the first SAGD well pair).

SAGD Project Phase 2 - The Phase 2 front end work includes preliminary engineering design, regulatory approval, environmental approval work and determining regulatory requirements sufficient to define the work program, schedule and estimated cost of this second phase which is anticipated to include the drilling of two additional SAGD well pairs and the associated expansion of the current SAGD steam plant.

Capitalized Costs Relating Specifically to the SAGD Project

The Company entered into a Farmout Agreement dated July 31, 2013, whereby the Company’s operating costs of the SAGD Project are paid in full by the Farmee in accordance with the Farmout Agreement; therefore the Company has not capitalized any of the capital costs and operating expenses paid by the Farmee to the operator of the SAGD Project. See Note 4 herein “Capitalization of Costs Incurred in Oil and Gas Activities”.

Costs Incurred in Oil and Gas Property Acquisition, Exploration, and Development

See Note 5 herein “Exploration Activities”.

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Capitalization of Costs Incurred in Oil and Gas Activities (Tables)

9 Months Ended

Jun. 30, 2015

Oil and Gas Properties [Abstract]

Summary of capitalized costs relating to oil and gas - producing activities

	June 30,  2015			September 30, 2014
Unproved Oil and Gas Properties	$	19,671,471		$	19,651,296
Proved Oil and Gas Properties		4,568			4,568
Accumulated Depreciation and Depletion		(62,614	)		(51,814	)
Net Capitalized Cost	$	19,613,425		$	19,604,050

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Asset Retirement Obligations (Details Textual) - USD ($)	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
Asset Retirement Obligations (Textual)
Estimate of undiscounted cash flows related to asset retirement obligation	$ 622,593	$ 689,445
Fair value of liability	$ 435,415	$ 469,013
Risk free rate	3.74%
Inflation rate	2.00%
Term of settlement of the obligation	35 years

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Capitalization of Costs Incurred in Oil and Gas Activities (Details Textual) - USD ($)	Jun. 30, 2015	Jun. 30, 2014
Capitalization Of Costs Incurred In Oil And Gas Activities (Textual)
Depreciation and depletion expense	$ 10,800	$ 7,178

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Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities
Net loss	$ (1,484,331)	$ (911,351)
Items not affecting cash:
Share based compensation	865,756	239,480
Depreciation, accretion and depletion	$ 64,541	74,315
Bad debts		428
Loss on disposal of assets		(387)
Net changes in non-cash working capital (Note 13)	$ 276,472	(593,796)
Net Cash Used in Operating Activities	$ (277,562)	(1,191,311)
Investing Activities
Purchase of property and equipment		(408)
Investment in oil and gas properties	$ (31,637)	(3,635,922)
Long term investments	2,671	(81,809)
Net Cash Used in Investing Activities	$ (28,966)	(3,718,139)
Financing Activities
Payments on loan payable - related parties		$ (189,500)
Proceeds from issuance of common stock	$ 5,001
Net Cash Provided by (Used in) Financing Activities	5,001	$ (189,500)
Decrease in cash and cash equivalents	(301,527)	(5,098,950)
Cash and cash equivalents, beginning of period	2,324,755	7,633,009
Cash and cash equivalents, end of period	$ 2,023,228	$ 2,534,059
Supplemental Cash Flow Information:
Cash paid for interest
Cash paid for income taxes

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Exploration Activities

9 Months Ended

Jun. 30, 2015

Exploration Activities [Abstract]

EXPLORATION ACTIVITIES

5. EXPLORATION ACTIVITIES

The following table presents information regarding the Company’s costs incurred in the oil property acquisition, exploration and development activities for the nine months ended June 30, 2015 and 2014:

	June 30, 2015		June 30, 2014
Acquisition of Properties:
Proved	$	–	$	–
Unproved		20,175		3,660,626
Exploration costs		27,356		21,813
Development costs		–		–

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Commitments (Details)

1 Months Ended

9 Months Ended

12 Months Ended

Jan. 21, 2014

Jun. 20, 2013

USD ($)

$ / shares

shares

Jun. 30, 2015

CAD

Sep. 30, 2014

Jun. 20, 2013

CAD

shares

Commitments (Textual)

Office Lease Agreement

Jun. 30, 2015

Jun. 30, 2015

Shares and warrants issued, price per share | $ / shares

$ 1.00

Portwest Investments Ltd [Member]

Commitments (Textual)

Value of settlement of accrued payables to related party | $

$ 239,528

Portwest Investments Ltd [Member] | Chief Executive Officer and President [Member]

Commitments (Textual)

Percentage of ownership interest

100.00%

Compensation to directors per month

CAD 12,500

Portwest Investments Ltd [Member] | Amending Agreement [Member] | Chief Executive Officer and President [Member]

Commitments (Textual)

Term of agreement

Dec. 31, 2014

Option vesting period

5 years

Number of common shares called by options | shares

1,000,000

1,000,000

Option exercise price | $ / shares

$ 0.05

Description of stock options vesting

One half of these shares were vested immediately and the remaining one half vested on June 20, 2014

Consideration paid for termination of parts of the Prior Agreement

CAD 70,000

Units of shares and warrants issued for termination of original agreement | shares

850,000

850,000

Shares and warrants issued, price per share | $ / shares

$ 0.05

Description of units issued

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

Warrants expiration date

Jun. 20, 2016

Concorde Consulting [Member] | Chief Financial Officer [Member]

Commitments (Textual)

Percentage of ownership interest

100.00%

Compensation to directors per month

CAD 15,000

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Exploration Activities (Tables)

9 Months Ended

Jun. 30, 2015

Exploration Activities [Abstract]

Summary of cost incurred in oil and gas property acquisition, exploration and development activities

	June 30, 2015		June 30, 2014
Acquisition of Properties:
Proved	$	–	$	–
Unproved		20,175		3,660,626
Exploration costs		27,356		21,813
Development costs		–		–

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Oil and Gas Properties (Details)	Jun. 30, 2015 CAD
Oil and Gas Properties [Abstract]
2015	CAD 12,074
2016	48,294
2017	48,294
2018	48,294
2019	29,478
Subsequent	CAD 22,400

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Legal Actions

9 Months Ended

Jun. 30, 2015

Legal Actions [Abstract]

LEGAL ACTIONS

15. LEGAL ACTIONS

IGM Resources Corp vs. Deep Well Oil & Gas, Inc., et al – DISMISSED

On February 11, 2014, the Court dismissed, without any costs to the Company, the Plaintiff’s claims against Deep Well Oil & Gas, Inc. and its subsidiary Northern Alberta Oil Ltd.

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

The Plaintiff was a minority shareholder of 979708 Alberta Ltd. ("979708"). 979708 was in the business of discovering, assembling and acquiring oil and gas prospects. In 2002 and 2003, 979708 acquired oil and gas prospects in the Sawn Lake area of Alberta. On or about the 14^thof July, 2003, all or substantially all the assets of 979708 were sold to Classic Energy Inc. The Plaintiff claims the value of the assets sold was far in excess of the value paid for those assets. On April 23, 2004, Northern purchased Classic Energy Inc.'s assets, some of which are under dispute by the Plaintiff. 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 in which the Plaintiff is claiming an interest.

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