WesternZagros Resources Ltd.
TSX VENTURE : WZR

WesternZagros Resources Ltd.

June 07, 2017 07:30 ET

WesternZagros Provides Corporate and Operational Update

CALGARY, ALBERTA--(Marketwired - June 7, 2017) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or the "Company") provides a corporate update and an operational update for its Garmian Block in the Kurdistan Region of Iraq.

Interim Order Obtained for Arrangement

The Company has obtained an interim order (the "Interim Order") of the Court of Queen's Bench of Alberta (the "Court") in connection with its plan of arrangement (the "Arrangement") with WZG Acquisition Ltd. ("Crest AcquireCo"), an affiliate of Crest Energy International LLC ("Crest"), pursuant to the provisions of the Business Corporations Act (Alberta). As previously announced on May 12, 2017, under the Arrangement, Crest AcquireCo will provide the Company with the funds necessary for the Company to acquire all of the outstanding common shares of the Company ("Common Shares") (other than one Common Share currently owned by Crest which will be acquired by Crest AcquireCo) and all of the outstanding Class A preferred shares, series 1, of the Company ("Preferred Shares") for cash consideration of $0.28 per share, resulting in Crest AcquireCo becoming the sole shareholder of the Company.

The Interim Order provides for, among other things, the holding of an annual and special meeting (the "Meeting") of the holders of Common Shares ("Shareholders") at 10:00 a.m. (local time) on July 5, 2017 in Calgary, Alberta, to seek Shareholder approval for the Arrangement. Pursuant to the Interim Order, WesternZagros has prepared a management information circular (the "Circular") in connection with the Meeting. WesternZagros expects to mail the Circular to Shareholders of record as of May 31, 2017 on or about June 8, 2017. The Circular will also be available under the Company's profile on SEDAR at www.sedar.com on or about June 8, 2017. If approved by the Shareholders at the Meeting and by the Court and all other conditions to completion are satisfied or waived, the Arrangement is expected to close on or about July 6, 2017.

All Shareholders are encouraged to vote in person or by proxy at the Meeting. The board of directors of WesternZagros is recommending that Shareholders vote in favour of the Arrangement.

Sarqala-1 Production

On its Garmian Block and further to its previous news release of April 10, 2017, the Company announces that the operator has completed the installation of surface equipment to expand the Sarqala production facility. Current production for the Sarqala-1 well is approximately 9,500 barrels per day of oil which is in line with the Company's first quarter guidance expectations.

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 news release contains certain forward-looking statements relating to, but not limited to, statements regarding the anticipated timing for mailing the Circular and completing the Arrangement and expected production rates for 2017. 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, development plans, the outcomes of future well operations, drilling activity and testing, the continued ability to sell production in the domestic or export markets and the payments to be received in connection therewith, anticipated operating costs, future economic conditions, future currency and exchange rate and continued political stability and security in the Kurdistan Region. 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 outcome of negotiations with co-venturers and the government, 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 timing, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks relating to its continuing ability to access markets and to receive payments in accordance with the terms of its production sharing contracts on a timely basis, the uncertainty associated with any dispute resolution proceedings, the uncertainty associated with negotiating with foreign governments and the risk associated with international activity, including the lack of federal petroleum legislation, ongoing political disputes and recent terrorist activities in Iraq in particular.

In respect of the forward-looking statements and information concerning the completion of the Arrangement and the anticipated timing for completion of the Arrangement, WesternZagros has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary court and shareholder approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the completion of the Arrangement. These dates may change for a number of reasons, including inability to secure necessary shareholder and court approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Arrangement. Risks and uncertainties that may cause such differences include but are not limited to: the risk that the Arrangement may not be completed on a timely basis, if at all; the conditions to the consummation of the Arrangement may not be satisfied; the risk that the Arrangement may involve unexpected costs, liabilities or delays; the possibility that legal proceedings may be instituted against WesternZagros and/or others relating to the Arrangement and the outcome of such proceedings; the possible occurrence of an event, change or other circumstance that could result in termination of the Arrangement; risks relating to the failure to obtain necessary shareholder and court approval; other risks inherent in the oil and gas industry. Failure to obtain the requisite approvals, or the failure of the parties to otherwise satisfy the conditions to or complete the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, if the Arrangement is not completed, the announcement of the Arrangement and the dedication of substantial resources of WesternZagros to the completion of the Arrangement could have a material adverse impact on WesternZagros's share price, its current business relationships and on the current and future operations, financial condition and prospects of WesternZagros.

Readers are cautioned that the foregoing list of important factors is not exhaustive and that these factors and risks are difficult to predict. The forward-looking statements contained in this news release are made as of the date of this news release and, except as required by law, WesternZagros does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. See the "Risk Factors" section of the Company's Annual Information Form (AIF) dated March 14, 2017 filed on SEDAR at www.sedar.com for a further description of these risks and uncertainties facing WesternZagros. Additional information relating to WesternZagros is also available on SEDAR at www.sedar.com, including the Company's AIF.

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