CALGARY, ALBERTA--(Marketwire - Nov. 19, 2012) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company") has successfully completed the first of three planned cased-hole tests in the Oligocene Formation of the Kurdamir-2 well in the Kurdistan Region of Iraq. Flow rates of up to 3,450 barrels per day ("bbl/d") of light oil were achieved from the 20 metre perforated interval, the deepest of the planned Oligocene tests. The Company now interprets the Oligocene oil leg encountered in this well to be 146 metres minimum thickness (previously interpreted to be 118 metres). WesternZagros expects that its contingent resources estimate will increase significantly as a result of this test.
Simon Hatfield, WesternZagros's Chief Executive Officer commented,
"This first cased-hole test result far exceeded our expectations from what we consider to be the poorest quality portion of the reservoir. The primary objective of testing this deepest interval was to establish lowest known oil. We now look forward to determining the flow rate from the two additional tests in the main zone of the increasingly promising Oligocene reservoir."
The cased-hole test was conducted over a perforated interval of 20 metres of fractured reservoir below the main porous zone of the Oligocene. The maximum flow rate of 3,450 bbl/d of light oil and 8.8 mmcf/d of natural gas was reached after flowing and stabilizing the well for two days at progressively larger choke sizes. The final rate was achieved on a 72/64" choke with a wellhead flowing pressure of 810 psi. The oil was high quality 38 degree API and no formation water was detected. The Company's expectation of an increase in its contingent resources is based on the now proven lowest known oil in the Kurdamir-2 well at 2,590 metres, 28 metres deeper than reported following the initial open-hole test conducted in March 2012. The test results also validate that the prospective resources contained in the Oligocene extend still further down the structure; and this will be further evaluated in the upcoming Kurdamir-3 well to be drilled once current operations on Kurdamir-2 are completed.
The operator, Talisman (Block K44) B.V. ("Talisman") will continue the testing program of two additional Oligocene intervals at Kurdamir-2. Upon completion of the testing program, test and wire log data will be analyzed and the Company will release an updated resource estimate for the Oligocene once confirmed by its independent auditors.
WesternZagros and Talisman each have a 40 percent working interest in the Kurdamir Block with the Kurdistan Regional Government ("KRG") holding the remaining 20 percent.
About WesternZagros Resources Ltd.
WesternZagros is an international natural resources company engaged in 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 news release contains certain forward‐looking information relating, but not limited, to operational information, future drilling and testing plans, and the timing associated therewith. Forward-looking information typically contains statements with words such as "anticipate", "plan", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Company cautions readers not to 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. In addition, the forward‐looking information is made as of the date hereof, and the Company assumes no obligation to update or revise such to reflect new events or circumstances, except as required by law.
Forward‐looking information is not based on historical facts but rather on management's current expectations and assumptions regarding, among other things, plans for and results of drilling activity and testing programs, future capital and other expenditures (including the amount, nature and sources of funding thereof), continued political stability, and timely receipt of any necessary government or regulatory approvals. 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 exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or 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, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. For further information on WesternZagros and the risks associated with its business, please see the Company's Annual Information Form dated March 26, 2012 (the "AIF"), which is available on SEDAR at www.sedar.com.
In addition, statements relating to prospective oil resources contained herein are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources described can be economically produced in the future. Terms related to resource classifications referred to herein are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook which are as follows. "Prospective resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development (economic, regulatory, market, facility, corporate commitment or political risks). The chance of commerciality is the product of these two risk components. The estimates referred to herein have not been risked for either the chance of discovery or the chance of development. There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources. The combined prospective resource estimate referenced was independently audited as of May 31, 2012 (Tertiary Eocene), April 20, 2012 (Tertiary Oligocene) and January 14, 2011 (Cretaceous) and is the gross volume for the indicated reservoirs, without any adjustment for the Company's working interest or encumbrances. The Company's Statement of Oil and Gas Information contained in its Annual Information Form dated March 26, 2012 ("AIF") and Material Change Reports dated April 23, 2012 and June 6, 2012 ("Material Change Reports") filed on SEDAR at www.sedar.com contain additional detail with respect to the resource assessments and include the significant risks and uncertainties associated with the estimates and the recovery and development of the resources. In addition, the combined mean estimate of prospective resources referenced is an arithmetic sum of the mean estimates for the three individual reservoirs on the Kurdamir structure and each such individual mean estimate is the average from the probabilistic assessment that was completed for the reservoir. Readers should refer to the AIF and the Material Change Reports for a detailed breakdown of the high (P10), low (P90) and best (P50) estimates for each of the individual reservoir assessments.
WESTERNZAGROS RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50® COMPANY IN 2012. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS USED UNDER LICENSE.
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