WesternZagros Resources Ltd.
TSX VENTURE : WZR

WesternZagros Resources Ltd.

March 19, 2013 07:30 ET

WesternZagros Successfully Closes $123 Million Financing from Crest Energy International

CALGARY, ALBERTA--(Marketwire - March 19, 2013) -

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WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or the "Company") has closed its previously announced financing with Crest Energy International LLC ("Crest") whereby Crest has purchased from WesternZagros, through a non-brokered, private placement, 51,000,000 Common Shares of the Company at a price of Cdn$1.25 per share for gross proceeds of $63.75 million. Crest now holds approximately 19.8 percent of the Company's issued and outstanding Common Shares. The Common Shares issued to Crest are subject to a contractual hold period until July 19, 2013, pursuant to the terms of the investment agreement (the "Agreement") entered into between the Company and Crest on March 10, 2013, as well as a statutory hold period of the same length.

In addition, pursuant to a restated and amended senior secured loan agreement (the "Loan Agreement") between the parties, Crest has advanced to the Company US$57.5 million (approx. $59.2 million) (the "Loan"). The Loan will accrue interest at the rate of 6 percent per annum and is secured by 10 percent of the outstanding shares of WesternZagros's operating subsidiary. The Loan, together with all accrued interest, is to be repaid in full on September 30, 2014, subject to certain prepayment terms, including but not limited to certain repayment obligations in the event of future equity offerings by the Company.

The proceeds from the Private Placement and the Loan will be used for WesternZagros's 2013 capital and operating program pursuant to which the Company will focus on the continued appraisal of the Kurdamir Oligocene discovery, exploration activities on the Garmian Block and continued appraisal of the existing Sarqala discovery.

John Howland, of Crest, has been appointed to the WesternZagros Board of Directors. Mr. Howland is involved with all investment decisions of Crest and its affiliates, including Crest Investment Company, and serves as chairman, president, or director of some of the companies in which Crest invests. Mr. Howland has extensive international business and management experience in privately held and public corporations, including as the chairman and CEO of one of the larger grain companies in the U.S. Mr. Howland has a BBA from the University of Alabama and a MBA from the University of North Dakota. Mr. Howland also served in the United States Air Force as a Captain.

Mr. Howland adds, "I am honored to join the WesternZagros board and work with this exceptional team. I look forward to sharing my experiences and contributing to the future direction and growth of this innovative company."

Pursuant to the Investment Agreement, Crest will continue to have certain rights to participate for its pro-rata share in future equity issuances by the Company and Eric Stoerr, an officer of Crest, will also continue as a member of the Board.

Fred Dyment, Chairman of the Board of WesternZagros, welcomed Mr. Howland, stating, "We are extremely pleased by Crest's support and confidence in WesternZagros as evidenced by this financing. The entire Board looks forward to working with John in the future. He will be a great addition to our board, as Eric has proven to be."

RBC Capital Markets acted as financial advisor to the Company on the Private Placement.

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".

About Crest Energy International LLC

Crest is an affiliate of Crest Investment Company, a Houston, Texas-based principal investment company specializing in energy investments, including projects in the Middle East. It is primarily involved in midstream oil and gas, but has substantial expertise in the high technology, manufacturing and real estate sectors.

This news release contains certain forward‐looking information relating, but not limited, to the proposed use of proceeds. 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, which is available on SEDAR at www.sedar.com.

WESTERNZAGROS RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50® COMPANY IN 2012 AND 2013. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS USED UNDER LICENSE.

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