| December 12, 2011 |
| WesternZagros Provides Operational Update |
CALGARY, ALBERTA--(Marketwire - Dec. 12, 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 provide an operational update for the drilling operations at Mil Qasim-1 and Kurdamir-2, and the continued ramp up of production from the Sarqala-1 extended well test.
Sarqala-1 Extended Well Test
Production from the Sarqala-1 extended well test has continued to increase with the addition of tank capacity and the construction of a new weighbridge at site. Gross production to the end of November totalled 96,000 barrels of oil that was sold into the domestic market. WesternZagros anticipates December production from the extended well test of approximately 124,000 barrels (4,000 barrels per day), and has recently achieved a daily production of over 5,000 barrels per day. To date, WesternZagros has received approximately $13 million for crude oil sales from the extended well test, including $7.9 million prepaid by the buyer for the anticipated December sales volumes.
Mil Qasim-1 Exploration Well
WesternZagros has started the testing program at the Mil Qasim-1 well after successfully drilling to a total depth of 2,425 metres. The Company had a number of hydrocarbon shows, both oil and gas, while drilling through the Upper Fars. Wireline logs have been run over this interval, and WesternZagros has identified approximately 100 metres of potential net sandstone reservoir from these logs. The Company anticipates initial results from this testing program to be available by the end of December.
Kurdamir-2 Exploration Well
The Kurdamir-2 exploration well has been drilled to a depth of approximately 1,790 metres, where the second intermediate string of casing is currently being cemented. The Kurdamir-2 exploration well will now be drilled through the Lower Fars top seal to a depth of approximately 2,250 metres, at which depth the third intermediate string of casing is anticipated to be set just above the Oligocene reservoir. WesternZagros anticipates that the drilling and testing of the Oligocene reservoir may occur in the first quarter of 2012, with the deeper Eocene and Cretaceous reservoirs expected to be drilled and tested by the end of the second quarter of 2012.
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".
This news release contains certain forward-looking information relating, but not limited, to operational information, future drilling and testing plans, future well designs and completions and 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.
In addition, statements relating to "prospective oil resources" contained herein are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources described can be economically produced in the future. Terms related to resource classifications referred to herein are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook. "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, facility, corporate commitment or political risks). The chance of commerciality is the product of these two risk components. The estimates referred to herein have not been risked for either the chance of discovery or the chance of development. 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. All resource estimates presented are gross volumes for the indicated reservoirs, without any adjustment for working interest or encumbrance. The mean estimate of prospective oil resources presented for the Mil Qasim interval above is for the Upper Fars (106 million barrels (MMbbl)) interval. The mean estimate presented above for the Upper Fars is the average from the probabilistic assessment that was completed; the low estimate (P90) is 7 MMbbl, the best estimate (P50) is 63 MMbbl and the high estimate (P10) is 265 MMbbl.
The Company's material change report filed on SEDAR at www.sedar.com and dated January 17, 2011, contains additional detail on the information used in the resource assessment for Mil-Qasim and includes the risks and level of uncertainty associated with the recovery and development of the resources and the significant positive and negative factors relevant to the estimates. The combined mean estimate of prospective oil resources presented for the Kurdamir reservoirs above are for the Oligocene (280 million barrels (MMbbl)) reservoir, the Eocene (124 MMbbl) reservoir and the Cretaceous (181 MMbbl) reservoir. The mean estimate presented above for the Oligocene reservoir is the average from the probabilistic assessment that was completed; the low estimate (P90) is 85 MMbbl, the best estimate (P50) is 260 MMbbl and the high estimate (P10) is 560 MMbbl. The mean estimate presented above for the Eocene reservoir is the average from the probabilistic assessment that was completed; the low estimate (P90) is 18 MMbbl, the best estimate (P50) is 86 MMbbl and the high estimate (P10) is 273 MMbbl. The mean estimate presented above for the Cretaceous reservoir is the average from the probabilistic assessment that was completed; the low estimate (P90) is 59 MMbbl, the best estimate (P50) is 152 MMbbl and the high estimate (P10) is 340 MMbbl. The Company's material change reports filed on SEDAR at www.sedar.com and dated December 16, 2010 (with respect to the Oligocene reservoir at Kurdamir) and January 17, 2011 (with respect to the Eocene and Cretaceous reservoirs at Kurdamir), contain additional detail on the information used in the resource assessments for Kurdamir and include the risks and level of uncertainty associated with the recovery and development of the resources and the significant positive and negative factors relevant to the estimates.
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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