WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company") provides its results for the period ended June 30, 2010, key highlights, and activities to date.

During the second quarter, the Company continued to drill the Kurdamir-1 well sidetrack. At a depth of 3,214 metres the well encountered high-pressure sour gas which resulted in well control difficulties. Subsequently, the drill string parted and the Company initiated emergency response procedures. The well was safely controlled with no injuries or atmospheric release of gas. Efforts to recover the drill string continue. Kurdamir-1 is the Company's second exploration well in the Kurdistan Region of Iraq.

Following drill string recovery operations, WesternZagros and its partners will decide whether to conduct further drilling operations in order to test the various potential hydrocarbon bearing zones that include the Shiranish, Kometan, Upper Aaliji and Lower Oligocene formations. Another option is to re-drill the Kurdamir structure, in a location designed to meet the dual objectives of testing the down dip flank oil potential in the the Oligocene reservoir and the oil potential of the deeper Cretaceous targets. A recently completed geochemical study of drill cuttings from the Kurdamir-1 well supports the interpretation that the Oligocene reservoir is oil bearing down dip on the flanks of the Kurdamir structure.

The costs of the well control operations, sidetracking activities and a re-drill of the Kurdamir-1 well (if necessary) are covered by an insurance policy and coverage was confirmed by the insurers during the second quarter. WesternZagros has submitted claims, and payments under the policy are being received as expected.

While proceeding with operations at Kurdamir-1, WesternZagros continued to assess the prospectivity of the Production Sharing Contract ("PSC") lands. This work has identified additional attractive opportunities, including a new prospect in the Upper Fars reservoir target named Mil Qasim, located close to the Sarqala-1 well (the first exploration well drilled by WesternZagros). While drilling through the Upper Fars interval at Sarqala-1, high quality light oil shows (35 degree API gravity) were encountered, which had not been originally anticipated by WesternZagros. This Upper Fars target at Mil Qasim is considerably shallower than the original target formations in both Sarqala and Kurdamir.

In order to maintain financial and operational flexibility while continuing with Kurdamir-1 and evaluation of multiple future drilling options, WesternZagros is involved in active discussions with its two partners, the Kurdistan Regional Government ("KRG") and Talisman Block K44 B.V. ("Talisman"), around how to structure and sequence the future activities of the joint venture.

Commenting on the results from the second quarter of 2010, WesternZagros Chief Executive Officer Simon Hatfield said, "While we had anticipated completing the Kurdamir-1 well by this time, we are nonetheless pleased to have brought the well safely under control following the potentially dangerous drill string failure experienced in May. Our current focus is on completing the drill string recovery operations at the well so that we can test the promising oil-bearing zones that we have encountered. We are also in constructive discussions with our co-venturers, as we assess options that will enable us to move ahead on evaluating and drilling the additional prospects identified on our exploration block. In spite of the challenges we have encountered while drilling our first two wells in this under-explored area, we remain highly confident about the prospectivity of the region and optimistic about the potential to discover and produce oil."

WesternZagros' highlights and activities for the second quarter of 2010 to August 12, 2010 include the following:

Operations

- WesternZagros drilled a sidetrack at the Kurdamir-1 well during the second quarter, exiting the 9 5/8" casing at approximately 2,600 metres through the Upper Aaliji Formation into the Lower Aaliji Seal and reached a depth of 3,214 metres on April 25, 2010. At this depth, the well unexpectedly encountered a high pressure, hydrogen sulfide (H2S) bearing, hydrocarbon zone. The well was shut in while attempting to stabilize this zone.

- On May 15, 2010, the drill string parted and the Company activated its Emergency Response Plan and began well control operations. As a precaution, the Company moved non-essential personnel and local inhabitants who were within its Emergency Planning Zone ("EPZ") to locations outside of the EPZ.

- The Company safely and successfully secured the well on May 31, 2010 and the local residents who had been evacuated were able to return to their homes in early June.

- A hydraulic workover rig, known as a snubbing unit, that enables well intervention to be safely performed while the well is under pressure was installed in June in order to recover the drill string from the well and complete well kill operations. The upper 450 metre portion of the parted drill string was recovered in early July 2010. A further 1655 metres was recovered in early August 2010 with approximately 800 metres remaining in the well bore. The Company is now removing the snubbing unit prior to resuming further well control operations.

- The gross costs for Kurdamir-1 as of June 30, 2010 were approximately $92 million ($55 million net to WesternZagros). These gross costs include approximately $35 million of incremental costs associated with well control and sidetrack activities ($21 million net to WesternZagros). The Company is pursuing reimbursement of a significant portion of these costs under an insurance claim. WesternZagros, as operator, has notified the KRG of a force majeure event under the terms of the PSC related to the well control and subsequent sidetracking operations associated with Kurdamir-1. Under the terms of the PSC, when a force majeure event occurs, the time resulting from any such delay and the time necessary to repair any damage resulting from the delay will be added to the first exploration sub-period.

Exploration

- WesternZagros completed a geochemical study of various drill cuttings from Kurdamir-1 in the Aaliji seal to analyze whether this source rock interval is likely to be generating oil or gas. Results from this study provide further support for the potential of an oil flank in the Oligocene reservoir at Kurdamir, as the source rock was found to be both oil prone and likely to be generating oil present day.

- WesternZagros has completed an evaluation of the Upper Fars interval drilled at Sarqala-1, where high quality light oil shows (35 degree API gravity) were encountered while drilling, and has identified a nearby Upper Fars drilling prospect named Mil Qasim. Mil Qasim is a seismically defined anticline, the crest of which lies approximately three kilometres from the Sarqala-1 well. In order to test this prospect, it would require a well to be drilled to a proposed total depth of 2,400 metres.

- During the second quarter of 2010, WesternZagros completed the majority of the work required to prepare the Qulijan-1 well site, including preparing the drilling site and building roads. However, the Company has suspended further work on Qulijan-1 while its operational efforts are focused on Kurdamir-1 and while discussions are underway with its partners on the sequencing of future drilling.

- WesternZagros continues to compile further seismic data and information from wells on the exploration blocks surrounding its PSC lands. WesternZagros is integrating this new information, along with the reprocessed seismic data from its PSC lands, into its seismic interpretations to further define and update its prospects and lead inventory.

Financial

- As at June 30, 2010, WesternZagros had $54.2 million in working capital.

- WesternZagros' share of capital expenditures for the six months ended June 30, 2010 associated with its PSC activities and other capitalized costs was $29.4 million, prior to insurance recoveries. Year-to-date expenditures for 2010 include $27.2 million of drilling-related costs; $0.4 million of geological and geosciences related work; $1.3 million of supervision and local office costs; and $0.5 million of corporate-related expenditures. Estimated insurance recoveries of $19.7 million, net of deductibles, were recorded in the second quarter of 2010 related to the year-to-date well recovery costs incurred at Kurdamir-1.

Insurance

- WesternZagros initiated an insurance claim in the first quarter of 2010 related to well control operations at Kurdamir-1, commencing when Kurdamir-1 was drilled into a high pressure formation in the Gulneri seal and continuing with the well control operations related to subsequent additional high pressure zone in the Aaliji seal The Company received confirmation of coverage for the claim from the insurers in the second quarter of 2010.

- As at June 30, 2010, WesternZagros had received $5.4 million in insurance proceeds and had accrued a further receivable of $14.3 million. Subsequent to June 30, 2010, the Company has received an additional $4.0 million in insurance proceeds. The Company continues to submit interim insurance claims as allowable costs are incurred.

- The Company's maximum limit for the current insurance claim is $45 million, which is expected to cover a substantial portion of the well recovery costs and related sidetrack drilling costs and a portion of the re-drill costs should this prove necessary.

Corporate