| September 27, 2011 |
| WesternZagros Accelerates Oil Production Timeline and Reports Progress on Mil Qasim-1 Drilling |
CALGARY, ALBERTA--(Marketwire - Sept. 27, 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") has received approval to begin producing its first oil through an extended well test at its Sarqala-1 oil discovery. Drilling at Mil Qasim-1, the Company's third exploration well, is proceeding ahead of schedule.
"We are delighted to commence our extended well test at Sarqala-1 sooner than anticipated. The acceleration of the next phase of testing will determine the maximum sustainable production of the Jeribe Discovery, and will enable us to deliver our first light crude oil to market by truck, providing initial cash flow to the Company. This is a milestone event for us; one which will position WesternZagros for the first time as a producing company in one of the world's most prospective exploration areas," said Simon Hatfield, Chief Executive Officer.
Sarqala-1 Discovery Well Update
WesternZagros has received approval from the Ministry of Natural Resources of the KRG to start the extended well test at Sarqala. Current plans are to commence production from the Sarqala-1 well in October at approximately 2,000 barrels of oil per day ("BOPD") and increase production up to approximately 5,000 BOPD by the end of 2011. The crude oil will be trucked during this extended test and likely sold on the domestic market.
The Sarqala-1 well initially tested 40 degree API crude oil at rates of over 9,000 BOPD at a wellhead pressure of approximately 2,400 pounds per square inch. The well was not stimulated and is expected to continue to clean up and increase production capability during the test.
A recent report by Fekete Associates, an independent petroleum reservoir engineering company, calculates the Sarqala-1 well maximum theoretical absolute open flow (the "AOF") for the Jeribe reservoir through the existing tubing to be 11,070 BOPD. The well capability is currently limited by tubing size, and production could be increased to a maximum theoretical AOF of 13,640 BOPD by increasing the tubing size. WesternZagros will utilize the information gathered from this extended well test in determining future appraisal and development activities, including the potential for increasing production beyond 5,000 BOPD. Future appraisal and development well designs will allow for higher capacity tubing and potentially horizontal completions to take advantage of the demonstrated high deliverability from the Jeribe reservoir.
Mil Qasim-1 Exploration Well Update
Mil Qasim-1 is the Company's third exploration well. WesternZagros spudded the well on August 29, 2011. Drilling is currently ahead of schedule and 20" casing has been successfully run at approximately 750 metres. Currently, the Company is drilling ahead at approximately 1,200 metres and anticipates setting the next casing string at approximately 1,600 metres prior to drilling into the targeted Upper Fars Reservoir. In keeping with other wells drilled by WesternZagros, oil shows have already been encountered in the shallow section of the well drilled to date. Further updates will be provided as operations progress.
Health, Safety and Environment
WesternZagros recently passed a major milestone in its HSE initiatives in recording over 1 million man -hours of operation without a lost-time incident. This achievement reflects the Company's commitment to protect workers, assets and the community in the areas in which it operates.
Corporate Presentation Update
WesternZagros is pleased to direct stakeholders to an updated Corporate Presentation which can be located at www.westernzagros.com.
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 two Production Sharing Contracts 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 and testing plans, future production rates and the timing associated therewith. 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. Readers are also cautioned that disclosed test rates and AOFs 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 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 April 11, 2011, which is available on SEDAR at www.sedar.com.
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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