Exhibit 10.1
 
Minutes of Settlement
 
Between:     Deep Well Oil & Gas, Inc. and
Northern Alberta Oil Ltd.
Deep Well Oil & Gas (Alberta) Ltd., ("the Farmor")
 
and
 
1350826 Alberta Ltd. (the Farmee")
 
and
 
Andora Energy Corporation ("Andora")
 
Whereas the parties are the successors in interest to a Farmout Agreement dated
February 25, 2005, as amended, attached hereto as Schedule "A";
 
And whereas Andora is the beneficial owner of 3 percentage points of the Gross
Overriding Royalty created under a royalty agreement dated December 12, 2003
originally between Mikwec Energy Canada Ltd. and Nearshore Petroleum Corporation
(the “Nearshore ORR”)
 
And whereas a dispute has arisen with respect to the performance of the Farmee's
obligations under clause 4 of the Farmout Agreement and the selection of earned
sections under clause 4;
 
And whereas the parties have mediated and resolved these differences and certain
collateral matters on the terms contained herein:
 
1.
The Farmee shall be regarded as having earned the two sections on which the
Option Wells were drilled and 4 additional sections of its choosing, which shall
consists of the following:

 

 
·
40% W.I. Twp 91 Range 12 W5 sections 29 & 28

 
·
40% W.I. Twp 91 Range 13 W5 section 25

 
·
40% W.I. Twp 92 Range 13 W5 section 1

 
·
40% W.I. Twp 91 Range 12 W5 section 32

 
·
40% W.I. Twp 91 Range 12 W5 section 30

 
(the "Earned Sections")
 
2.
Farmee and Andora acknowledge that their only interest in the Nearshore ORR in
the 12 sections earned by Farmee under the Farmout Agreement is 3 percentage
points of the Nearshore ORR on the Farmor's 40% beneficial interest in such
sections.

 
 
 

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Further, should the Farmee or Andora acquire any additional percentage points of
the Nearshore ORR, the additional percentage points of the Nearshore ORR will
only apply to Farmor’s 40% beneficial interest on those additional lands where a
40% beneficial interest was transferred by Farmor to Farmee.
 
3.
The Farmee shall provide the following information to the Farmor:

 

 
·
a complete copy of the well files;

 
·
a copy of the interpretation of the reprocessed seismic information;

 
·
a copy of all aero-magnetic studies and geo-physical interpretations;

 
·
a copy of the D&M Report.

 
4.
The parties shall jointly discontinue and release the other with respect to
Court of Queen's Bench Action No. 0701-05692 Claim and Counterclaim.

 
5.
The Farmee shall sign an authorization permitting any present or former employee
of the Farmor or its predecessor to disclose and discuss with the Farmor
technical information known to them regarding the Sawn Lake Project.

 
6.
The Farmee expressly acknowledges that the Farmor has the right to perform such
retesting with respect to the Option Wells as it may choose to perform at the
Farmor's sole cost and expense. If, however, such retesting results in the
production of at least 100 barrels of oil per day for 20 consecutive days, the
Farmee shall share in such costs to the extent of its Working Interest
ownership.

 
7.
The Farmee, within 30 days, will reconvey registered title to all unearned
sections of the Farmout Lands to the Farmor.

 
8.
The Farmee agrees and acknowledges that it has no ownership or interest in any
other sections of the Farmout Lands other than what it has previously earned
pursuant to clause 3 of the Farmout Agreement and in those sections indicated in
paragraph 1 of this Settlement Agreement.

 
9.
The Farmor and Farmee agree to use their best efforts to negotiate and enter
into a new Joint Operating Agreement with respect to the Farmout Lands using the
UK Operating Agreement as a working document. Until such time as a new Joint
Operating Agreement is executed, the Operating Procedure as defined in the
Farmout Agreement shall continue to govern the relationship between the Farmor
and the Farmee. With respect to the lands earned under clause 3 of the Farmout
Agreement and the lands described in paragraph 1 of this Agreement, the Farmee
shall be designated as the Operator.

 
10.
The parties shall execute such additional documents as may be necessary to give
effect to the above terms.

 
 

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Agreed to this 26th day of November 2007.
 
Deep Well Oil & Gas, Inc.
 
1350826 Alberta Ltd.
Northern Alberta Oil Ltd.
 
Deep Well Oil & Gas (Alberta) Ltd.
         
/s/ Curtis Sparrow
 
/s/ Jeff Chisholm
Per:
 
Per:
     
Andora Energy Corporation
         
/s/ Jeff Chisholm
   
Per:
   

 
 
 

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