WesternZagros Resources Ltd.
TSX VENTURE : WZR

WesternZagros Resources Ltd.

September 12, 2012 07:30 ET

WesternZagros Provides Operational and Corporate Update

CALGARY, ALBERTA--(Marketwire - Sept. 12, 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") is pleased to provide an operational update for its Kurdamir and Garmian Blocks and a corporate update.

KURDAMIR BLOCK

Kurdamir-2 Exploration Well

Testing of three separate intervals within the approximate 500 metres of gross pay in the Cretaceous reservoir commenced on July 28, 2012. However, the operator, Talisman (Block K44) B.V. ("Talisman"), has experienced a number of operational issues that have introduced delays into the program. The Company anticipates that results will be released when the testing of all three Cretaceous intervals has been completed later this month. In addition, the Company is working with the operator to prepare for testing of the interpreted 275 metres and 118 metres of gross oil pay in the Eocene and Oligocene reservoirs respectively. The results from these two intervals are now anticipated in October.

Kurdamir-3 Appraisal Well

WesternZagros and Talisman are finalizing the location for this next well to appraise the oil discovery in the Oligocene reservoir. The operator is expected to commence site construction in September in preparation for a drilling start date in December. The well is expected to require approximately 140 days to drill to a total depth of 2,860 metres.

Kurdamir 3D Seismic Survey

WesternZagros and Talisman have agreed on the parameters for a 3D seismic survey which will extend from Kurdamir into the neighbouring Topkhana Block in order to better define the areal extent of the Oligocene, Eocene and Cretaceous reservoirs. The survey encompasses 160 square kilometres on the Kurdamir Block alone. Recording of data for this survey is expected to start at the end of December and be completed in mid-April 2013. The data from this survey will be used to decide on future appraisal well locations and refine resource assessments of the existing discoveries.

Simon Hatfield, WesternZagros's Chief Executive Officer, commented:

"While the delay in the Kurdamir-2 testing program is frustrating, it in no way diminishes the optimism we feel towards the potential of the Cretaceous Reservoir at Kurdamir. Similarly, we continue to look forward to the testing results of the Eocene and Oligocene intervals and we are excited to be able to advance the Kurdamir 3D seismic program and the Kurdamir-3 well to continue the appraisal of the Oligocene reservoir that now carries prospective resources of over 1 billion barrels of oil."

GARMIAN BLOCK

Sarqala 3D Seismic Program

The contract has been awarded for a 3D seismic survey encompassing 325 square kilometers over the Sarqala, Mil Qasim and Zardi Complex structures. In addition, the seismic program also includes four 2D seismic lines to be acquired over the Chwar prospect. The crew is anticipated to start recording in late October 2012. Completion date is expected to be in March, 2013.

Sarqala-1 Extended Well Test

WesternZagros continues discussions with the Kurdistan Regional Government("KRG") to recommence the extended well test at Sarqala-1. KRG approval remains pending.

CORPORATE

Website

WesternZagros is pleased to announce the launch of its new website at www.westernzagros.com. The new website is part of the Company's ongoing efforts to enhance the quality and availability of information. The aim of the revised site is to allow visitors to gain a comprehensive understanding of WesternZagros and provide a leading resource for information regarding the Company's operations in the Kurdistan Region of Iraq.

Upcoming Conferences

WesternZagros will be participating in a panel discussion at the Goldman Sachs Global Natural Resources Conference on September 12 and presenting at the FirstEnergy/Societe Generale Global Energy Conference on September 18. Greg Stevenson, CFO of WesternZagros, will discuss the Company's latest developments and future plans.

Details of the events are as follows:

  • Goldman Sachs Global Natural Resources Conference - London
    Wednesday, September 12, 2012 at 2:00 PM (GMT)
  • FirstEnergy/Societe Generale Global Energy Conference - London
    Tuesday, September 18, 2012 at 11:00 AM (GMT)

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 the use of proceeds of the private placement. 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, timely receipt of all necessary stock exchange approvals, 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, which is available on SEDAR at www.sedar.com.

In addition, statements relating to "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 prospective resource estimate referenced was independently audited as of April 20, 2012 and is the gross volume for the indicated reservoir, 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 Report dated April 23, 2012 ("Material Change Report") filed on SEDAR at www.sedar.com contain additional detail with respect to the resource assessment and include the significant risks and uncertainties associated with the estimate and the recovery and development of the resources. In addition, the prospective resource estimate referenced is the mean estimate for the reservoir which is the average from the probabilistic assessment that was completed for the reservoir. Readers should refer to the AIF and the Material Change Report for a detailed breakdown of the high (P10), low (P90) and best (P50) estimates for the reservoir assessment.

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.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

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