WesternZagros Resources Ltd.
TSX VENTURE : WZR

WesternZagros Resources Ltd.

February 22, 2011 05:30 ET

WesternZagros Resources Ltd.: Block K44's Prospective Resources Now Exceed 1 Billion Barrels of Oil and 1.75 Billion Barrels of Oil Equivalent

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2011) -

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 announce the latest in a series of independent audits by Sproule International Limited ("Sproule") of WesternZagros' resource assessments. This audit, together with the previous audit results announced on December 16, 2010 and January 17, 2011, increases the combined mean estimate of gross unrisked prospective resources on the Company's Kalar-Bawanoor exploration block ("Block K44") to 1,092 million barrels of oil, or 1,771 million barrels of oil equivalent when gas and condensate are included.

This latest audit by Sproule covered stacked reservoirs in three of the Company's multiple prospect areas, all located on the Company's Block K44 in the Kurdistan Region of Iraq. The audit included: the Oligocene, Eocene and Cretaceous reservoir intervals at the Qulijan prospect; the Oligocene and Eocene reservoirs at the Baran prospect; and the Oligocene, Eocene and Cretaceous reservoirs at the Sarqala prospect. The prospective resource assessment numbers provided for the Oligocene, Eocene and Cretaceous reservoirs at the Sarqala prospect are separate and in addition to the prospective resource assessment of the Jeribe reservoir at the Sarqala prospect as previously disclosed in the Company's Material Change Report dated January 17, 2011.

"We're very encouraged by the rising resource estimates for our Block. As well as giving us a clearer picture of the opportunity at Sarqala and Qulijan, this audit also evaluates Baran, a prospect that, like Qulijan, is immediately adjacent to Kurdamir," said Simon Hatfield, WesternZagros' Chief Executive Officer. "In the near-term, we are positioned for a substantial oil discovery, as our rig is currently back at our Sarqala-1 well where we are preparing to drill a 100 metre sidetrack to test the Jeribe reservoir. Meanwhile, Talisman, on the adjacent K-39 Block, is currently drilling their Topkhana well, which should give us valuable and timely information about the highly promising Kurdamir-Topkhana structure prior to drilling our Kurdamir-2 well."

Table 3 provides an estimate of the oil, associated gas, gas condensate and solution gas resources in all the reservoirs included in this latest Sproule audit. The Baran and Qulijan prospects are considered to be promising step out exploration locations to be drilled following success at the Kurdamir-2 well. The deeper reservoirs at the Sarqala prospect will likely be pursued in subsequent appraisal wells following the successful completion of the Sarqala-1 re-entry well which will test the Jeribe reservoir. Tables 1 and 2, as previously disclosed in the Company's Material Change Report dated January 17, 2011, are also provided, herein, to indicate the cumulative total of Contingent and Prospective Resources for Block K44 to date.

The location of the Qulijan, Baran and Sarqala prospects in Block K44 are as indicated in the map located at the following link: http://media3.marketwire.com/docs/wzr_map.jpg

The Company continues to assess the potential of other additional prospects and will continue to release audited results as they become available.

Sproule carried out its independent audit in accordance with the current guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Pursuant to the COGE Handbook, an audit is the process whereby an independent qualified reserves auditor carries out procedures designed to allow the auditor to provide reasonable assurance that a reporting issuer's reserves data (or specific parts thereof) have, in all material respects, been determined and presented in accordance with the COGE Handbook and are, therefore, free of material misstatement.

Block K44 consists of approximately 2,120 square kilometres of land. WesternZagros holds a 40 per cent working interest in Block K44 pursuant to a Production Sharing Contract ("PSC") with the Kurdistan Regional Government signed on February 28, 2008. Additional information concerning the terms of the PSC can be found in the Corporation's Annual Information Form dated March 25, 2010, which is available at www.sedar.com.



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Table 1
Gross Unrisked Contingent Resources (1),(2)
Kurdamir-1 Oil, Gas and Condensate
(As of December 14, 2010) (5)
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Low Best High Mean
Estimate Estimate Estimate Estimate
(6) (7) (8) (9)
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Prospect Reservoir Hydrocarbon P90 P50 P10 Mean
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Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf
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Tertiary
Kurdamir Oligocene Oil 0.7 6.5 60 30
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Solution Gas 1 10 100 50
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Associated
Gas(4) 505 850 1420 920
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Condensate 22 33 48 35
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Table 2
Gross Unrisked Prospective Resources (3)
Kalar Bawanoor Block K44 Oil, Gas and Condensate
(As of January 14, 2011) (5)
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Low Best High Mean
Estimate Estimate Estimate Estimate
(6) (7) (8) (9)
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Prospect Reservoir Hydrocarbon P90 P50 P10 Mean
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Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf
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Kurdamir Tertiary
Oligocene(5) Oil 85 260 560 280
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Solution Gas 125 405 910 475
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MMBOE(14) 106 328 712 359
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Kurdamir Tertiary
Eocene Oil 18 86 273 124
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Solution Gas 24 150 630 265
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Associated Gas 30 60 110 65
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Condensate 1 1 3 2
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MMBOE 28 122 399 181
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Kurdamir Cretaceous Oil 59 152 340 181
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Solution Gas 80 330 965 455
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Associated Gas 65 135 245 145
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Condensate 1 3 7 4
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MMBOE 84 233 549 285
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Kurdamir Sub Total Mean MMBOE
- Gross Unrisked Prospective Resources 825
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Kurdamir Sub Total Mean Oil Only
- Gross Unrisked Prospective Resources 585
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Mil Qasim Upper
Fars Oil 7 63 265 106
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Solution Gas 5 45 225 90
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MMBOE 8 71 303 121
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Sarqala
Re-entry Jeribe Oil 9 66 248 101
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Solution Gas 15 120 540 215
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MMBOE 12 86 338 137
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Table 2 Total Mean MMBOE
- Gross Unrisked Prospective Resources 1083
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Table 2 Total Mean Oil Only
- Gross Unrisked Prospective resources 792
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Table 3
Gross Unrisked Prospective Resources (3),(10)
Kalar Bawanoor Block K44 Oil, Gas and Condensate
(As of January 31, 2011)
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Low Best High Mean
Estimate Estimate Estimate Estimate
(6) (7) (8) (9)
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Prospect Reservoir Hydrocarbon P90 P50 P10 Mean
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Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf
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Sarqala(13) Oligocene Oil 18 41 87 48
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Solution Gas 20 75 180 90
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MMBOE 21 54 117 63
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Sarqala(13) Eocene Oil 4 27 109 44
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Solution Gas 10 80 335 135
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Associated Gas 55 250 720 335
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Condensate 1 6 18 8
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MMBOE 16 88 303 130
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Sarqala(13)Cretaceous Oil 0.5 4 14 6
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Solution Gas 2 10 45 20
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Associated Gas 15 45 115 55
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Condensate 0.3 1 3 1
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MMBOE 4 14 44 20
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Sarqala Sub Total Mean MMBOE
- Gross Unrisked Prospective Resources 213
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Sarqala Sub Total Mean Oil Only
- Gross Unrisked Prospective Resources 98
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Baran(12) Oligocene Oil 8 48 251 105
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Solution Gas 10 80 420 170
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Associated Gas 70 335 1430 620
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Condensate 2 12 59 24
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MMBOE 23 129 618 261
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Baran(12) Eocene Oil 0.6 4 27 11
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Solution Gas 1 10 65 25
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Associated Gas 10 45 205 85
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Condensate 0.2 1 5 2
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MMBOE 3 14 77 31
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Baran Sub Total Mean MMBOE
- Gross Unrisked Prospective Resources 292
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Baran Sub Total Mean Oil Only
- Gross Unrisked Prospective Resources 116
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Qulijan(11) Oligocene Oil 7 45 157 66
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Solution Gas 10 60 210 90
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Associated Gas 60 220 550 270
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Condensate 2 8 23 11
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MMBOE 21 100 307 137
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Qulijan(11) Eocene Oil 1 9 34 14
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Solution Gas 2 15 65 30
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Associated Gas 10 45 140 65
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Condensate 0.2 1 4 2
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MMBOE 3 20 72 32
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Qulijan(11)Cretaceous Oil 0.4 3 13 6
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Solution Gas 1 10 40 15
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Associated Gas 5 20 60 30
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Condensate 0.1 1 2 1
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MMBOE 2 9 32 15
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Qulijan Sub Total Mean MMBOE
- Gross Unrisked Prospective Resources 183
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Qulijan Sub Total Mean Oil Only
- Gross Unrisked Prospective Resources 86
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Table 3 Total Mean MMBOE
- Gross Unrisked Prospective Resources 688
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Table 3 Total Mean Oil Only
- Gross Unrisked Prospective Resources 300
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Table 2 and 3 Total Mean MMBOE
- Gross Unrisked Prospective Resources 1,771
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Table 2 and 3 Total Mean Oil Only
- Gross Unrisked Prospective Resources 1,092
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Notes to Tables 1, 2, and 3:

(1) The contingent resources are the gross volumes estimated for the
Tertiary Oligocene carbonate reservoirs at Kurdamir-1, without any
adjustments for working interest or encumbrances.

(2) Contingent Resources are those quantities of petroleum estimated, as
of a given date, to be potentially recoverable from known accumulations
using established technology or technology under development, but which
are not currently considered to be commercially recoverable due to one
or more contingencies. Contingent resources have an associated chance
of development (economic, regulatory, market and facility, corporate
commitment or political risks). These estimates have not been risked
for the chance of development. There is no certainty that the
contingent resources will be developed and, if they are 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
contingent resources. The Corporation's Material Change report dated
December 16, 2010, which is available at www.sedar.com, contains
additional detail on the specific contingencies which prevent the
classficiation of these contingent resources as reserves.

(3) The prospective resources are the undiscovered potentially
recoverable gross volumes estimated for the indicated reservoirs,
without any adjustments for working interest or encumbrances.
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 and facility, corporate commitment or
political risks). The chance of commerciality is the product of these
two risk components. 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. In this case, prospective resources are
undiscovered resources that indicate development potential in the event
the discovery is commercial and should not be construed as reserves or
contingent resources.

(4) The gross unrisked contingent resources for gas reflect reductions for
condensate recovery, surface losses, and fuel gas.

(5) The contingent and prospective resources for the Tertiary Oligocene
carbonate reservoir at the Kurdamir-1 well are as at December 14, 2010,
as previously disclosed in the Corporation's Material Change Report
dated December 16, 2010, which is available at www.sedar.com. The
prospective resources for the Tertiary Eocene and Cretaceous carbonate
reservoirs at the Kurdamir-1 well, the Upper Fars reservoir at Mil
Qasim, and the Jeribe reservoir at the Sarqala-1 well are as at January
14, 2011, as previously disclosed in the Corporation's Material Change
Report dated January 17, 2011, which is available at www.sedar.com

(6) Low Estimate is considered to be a conservative estimate of the quantity
that will actually be recovered. It is likely that the actual remaining
quantities recovered will exceed the low estimate. If probabilistic
methods are used, there should be at least a 90 percent probability
(P90) that the quantities actually recovered will equal or exceed the
low estimate.

(7) Best Estimate is considered to be the best estimate of the quantity that
will actually be recovered. It is equally likely that the actual
remaining quantities recovered will be greater of less than the best
estimate. If probabilistic methods are used, there should be at least a
50 percent probability (P50) that the quantities actually recovered will
equal or exceed the best estimate.

(8) High Estimate is considered to be an optimistic estimate of the quantity
that will actually be recovered. It is unlikely that the actual
remaining quantities recovered will exceed the high estimate. If
probabilistic methods are used, there should be at least a 10 percent
probability (P10) that the quantities actually recovered will equal or
exceed the high estimate.

(9) Mean Estimate is the average from the probabilistic assessment.

(10) The prospective resource estimates for the Qulijan Oligocene, Eocene
and Cretaceous, Baran Oligocene and Eocene, and Sarqala Oligocene,
Eocene and Cretaceous prospects are based upon interpretation of
WesternZagros' recent vintage 2D seismic database within Block K44
(1483 kilometres, 42 lines)and well data from WesternZagros'
Kuramir-1 and Sarqala-1 wells.

(11) The Qulijan Oligocene, Eocene and Cretaceous prospective resource
assessment is based on eight 2D seismic lines and offsetting
Kurdamir-1 well information.

(12) The Baran Oligocene and Eocene prospective resource assessment is
based on nine 2D seismic lines and nearby Kurdamir-1 well information.

(13) The Sarqala Oligocene, Eocene and Cretaceous prospective resource
assessment is based on seven 2D seismic and information from the
Sarqala-1 well drilled in 2008-2009.

(14) Barrels of oil equivalent (BOEs) may be misleading, particularly if
used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl has been
used and is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead.


WesternZagros has no plans to develop the gas and/or condensate and/or oil resources at this time. There is limited local infrastructure and markets for natural gas and condensate in the area at this time, and export infrastructure for natural gas to gain access to international markets has not yet been developed. Beyond this contingency, no federal Iraq legislation has been agreed to or enacted to address the future organization of Iraq's petroleum industry or the sharing of petroleum and other revenues within Iraq. Failure to enact legislation (or the enactment of federal legislation contradictory to Kurdistan Region legislation) could materially adversely impact WesternZagros' interest in the Kurdistan Region and the Production Sharing Contract (PSC).

This resource disclosure coincides with the filing on SEDAR at www.sedar.com of a material change report, which includes the following additional information: a further description of the information used in the assessment of prospective resources, the risks and level of uncertainty associated with the discovery and recovery of the resources, the risks and uncertainties relating to the development of any discovered resources, and the significant positive and negative factors relevant to the estimates.

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. The Company, through its wholly-owned subsidiaries, holds a Production Sharing Contract with the Kurdistan Regional Government in the Kurdistan Region of Iraq. WesternZagros' 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 plans and testing programs and the timing and costs 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 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. Readers are also cautioned that disclosed test rates and potential production rates may not be indicative of ultimate production levels. 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, future capital and other expenditures (including the amount, nature and sources of funding thereof), continued political stability, timely receipt of any necessary government or regulatory approvals, the continued participation of the Company's co-venturers in exploration activities and the timely receipt of any insurance proceeds due to the Company. 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), risks associated with resource estimates, 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 24, 2010, which is available on SEDAR at www.sedar.com.

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