| October 17, 2011 |
| WesternZagros Secures C$46.6 Million Strategic Investment by TAQA |
CALGARY, ALBERTA--(Marketwire - Oct. 17, 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 a strategic investment agreement (the "Agreement") with the Abu Dhabi National Energy Company PJSC ("TAQA"). Under the Agreement, TAQA will purchase, through a private placement, 74 million common shares in the Company at $0.63 per share for gross proceeds of $46,620,000. When this private placement is completed, TAQA will own approximately 19.9 per cent of the Company's issued and outstanding common shares.
WesternZagros's Chief Executive Officer, Simon Hatfield said, "This landmark agreement represents a significant leap forward for us. TAQA is an excellent strategic investor for WesternZagros given their proven track record, their support for our direction and their deep knowledge of our operating region. We are excited about the opportunities we are pursuing in the next twelve months, including further appraisal of the Sarqala and Kurdamir discoveries, and exploration drilling at Mil Qasim. We remain confident that our conservative, step-wise approach to realizing the full potential of our exceptional exploration assets will deliver results for our shareholders in the future."
TAQA is a global energy company that operates on four continents. It is mainly involved in upstream oil and gas, power generation and water desalination. Under the terms of the Agreement, a representative from TAQA will join the Company's Board of Directors. In addition, WesternZagros has granted certain rights to TAQA to participate for its pro-rata share in future equity issuances by the Company. The Shares issued under the Agreement will be subject to a hold period until June 30, 2012.
Carl Sheldon, General Manager of TAQA, adds "This investment in WesternZagros reflects our focus on developing TAQA's footprint in the MENA (Middle East-North Africa) region. TAQA brings technical and operational expertise and a proven track record in developing challenging oil and gas projects, while WesternZagros has already built successful operations in the Kurdistan Region of Iraq. We believe that the fit between these complementary strengths will yield the potential for significant added value through future developments.
The proceeds from the private placement will be used towards WesternZagros's 2011/2012 capital and operating program. The Agreement is subject to certain customary conditions and regulatory approvals, including the approval of the TSX Venture Stock Exchange. The Company expects the closing to occur on or about October 31, 2011.
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's shares trade in Canada on the TSX Venture Exchange under the symbol "WZR".
About TAQA
Abu Dhabi National Energy Company (TAQA) is a global energy company majority owned by the Abu Dhabi Government and listed on the Abu Dhabi Securities Exchange. Main activities include their oil and gas business, power generation and water desalination across four continents.
TAQA is one the largest independent power producers in the world and the majority owner of the facilities that provide 98 per cent of the water and electricity requirements in the Emirate of Abu Dhabi. TAQA's power plants are located in the United Arab Emirates, Morocco, Oman, Saudi Arabia, Ghana, India, and the United States.
With operations in Canada, the United Kingdom, the Netherlands and the United States, TAQA's oil and gas business includes exploration and production, gas storage and pipeline transportation.
Their entrepreneurial culture, along with a commitment to people, safety and the environment, has created strong foundations for the long-term sustainable growth of their business.
This news release contains certain forward-looking information relating, but not limited, to the anticipated closing date for the private placement and the use of proceeds therefrom. 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.
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