CALGARY, ALBERTA–(Marketwired – Aug. 4, 2015) – WesternZagros Resources Ltd. (TSX VENTURE:WZR) (“WesternZagros” or “the Company”) is committed to providing timely and accurate information about its business strategy and objectives, financial and operating results, and development plan advancements. In addition to regulatory and materially-driven news releases, the Company invites investors and stakeholders to stay informed of its activity in the Kurdistan Region of Iraq through this newly-initiated status update. This periodic update comes in advance of the Company’s standard second quarter results which are scheduled for release on August 13, 2015.
Second quarter production from the Sarqala-1 well averaged 5,427 barrels of oil per day (“bbl/d). WesternZagros continues, in accordance with the KRG, to supply this production to the domestic market under pre-paid contracts. The Company currently has two domestic customers for its oil production.
The Company is incorporating final comments from the Kurdistan Regional Government (“KRG”) into its Sarqala Field Development Plan (“FDP”). Approval of the FDP is expected once the KRG has completed its contractual negotiations to build a natural gas plant to utilize the associated natural gas from the Sarqala field.
Operations to suspend the Hasira-1 well are proceeding according to plan and are anticipated to be completed in the third quarter. Although the FDP will delineate and develop the resources within the Jeribe reservoir, the Company and its partner, Gazprom Neft, are actively discussing the most effective next steps and the timing to assess the potential of Hasira-1’s Mio-Oligocene oil discovery.
The Company has prepared the Sarqala-2 well site and is ready to spud the well, which is expected to occur in the fourth quarter, once the Hasira-1 suspension operations are completed and the Sarqala FDP is approved by the KRG.
Following the Repsol S.A. (“Repsol”) acquisition of Talisman Energy Inc. in early May 2015, the Company is now actively engaged with Repsol on advancing the Kurdamir Development Plan. The KRG is keen to progress this oil and gas project although it is anticipated to take until the first quarter of 2016 for the co-venturers to finalize the development plan.
Corporate & Financial
Pursuant to the terms of the Investment Agreement between the Company and Crest dated March 10, 2013 as amended, Crest is in active discussions with the Company to appoint two directors to the WesternZagros Board. The Company welcomes these future appointments as the Company executes on its strategic and financial priorities.
In light of the ongoing oil price environment, the Company continues to implement strict cost reduction efforts that have meaningful impact to the bottom line, including optimizing capital investment, renegotiating contracts with service companies and cutting discretionary expenditures. The Company’s priorities are to manage capital spending to profitably grow production and funds flow through operational execution and maintaining prudent and conservative financial discipline.
About WesternZagros Resources Ltd.
WesternZagros is an international natural resources company focused on acquiring properties and exploring for, developing and producing crude oil and natural gas in Iraq. WesternZagros, through its wholly-owned subsidiaries, holds a 40 percent working interest in two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq. WesternZagros’s shares trade in Canada on the TSX Venture Exchange under the symbol “WZR”.
This status update contains certain forward-looking statements relating to, but not limited to, the appointment of additional directors, operational information, future development plans and the timing associated therewith. Forward-looking information typically contains statements with words such as “anticipate”, “estimate”, “expect”, “potential”, “could”, or similar words suggesting future outcomes. The Company cautions readers and prospective investors in the Company’s securities to not place undue reliance on forward-looking information as, by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by WesternZagros.
Forward looking information is not based on historical facts but rather on management’s current expectations as well as assumptions made by, and information currently available to management, concerning, among other things, outcomes of future well operations, plans for and results of extended well tests and drilling activity, future capital and other expenditures (including the amount, nature and sources of funding thereof), the continued ability to sell production in the domestic market and the prices to be received in connection therewith, anticipated operating costs, future economic conditions, future currency and exchange rates, continued political stability, continued security in the Kurdistan Region, timely receipt of any necessary co-venturer, government or regulatory approvals, the successful resolution of disputes, the Company’s continued ability to employ qualified staff and to obtain equipment in a timely and cost efficient manner and the participation of the Company’s co-venturers in joint activities. In addition, budgets are based upon WesternZagros’s current development plans and anticipated costs, both of which are subject to change based on, among other things, the actual outcomes of well operations and the installation and commissioning of facilities, unexpected delays, availability of future financing and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect. Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by WesternZagros including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in development and production; inherent uncertainties in interpreting geological data; changes in plans with respect to capital expenditures; interruptions in operations together with any associated insurance proceedings; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks relating to domestic refining capacity and continuing ability to access the domestic market, the uncertainty associated with any dispute resolution proceedings, the uncertainty associated with negotiating with foreign governments and risk associated with international activity, including the lack of federal petroleum legislation and ongoing political disputes and recent terrorist activities in Iraq in particular. For further information on WesternZagros and the risks associated with its business, please see the Company’s Annual Information Form dated March 16, 2015 (“AIF”) which is available on SEDAR at www.sedar.com.
Senior VP Finance
Manager of Investor Relations
WesternZagros Website: www.westernzagros.com