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 completed a revised resources assessment of its Kurdamir Oligocene
reservoir in the Kurdistan Region of Iraq and there are no material changes. On
the Garmian Block, declaration of commerciality has been filed, the Baram-1
exploration well has discovered light oil, albeit in low permeability reservoir,
and the Hasira-1 well has thus far confirmed the extension of the Sarqala oil
discovery in the Jeribe reservoir.
Operational updates on the Kurdamir and Garmian Blocks include:
-- Independently audited revised assessments of gross unrisked mean
contingent and prospective resources for the Oligocene reservoir in the
Kurdamir Block are materially unchanged following the Kurdamir-3 well
results.
-- The Company has filed a declaration of commerciality of the Sarqala
Discovery and is advancing development plans with the Kurdistan Regional
Government.
-- The Baram-1 well discovered a gross interval of 73 metres of light oil
in the Oligocene reservoir and this indicates a gross hydrocarbon column
in excess of 500 metres if it extends to the crest of the Baram
structure. The well will be suspended pending further evaluation.
-- The Hasira-1 well confirmed light oil in the Jeribe reservoir and the
well is preparing to drill ahead into the deeper Oligocene reservoir.
-- A 30 day extended well test in the Kurdamir-2 well is scheduled for
March to better assess the Oligocene reservoir performance.
-- A workover of the Sarqala-1 well is scheduled for March to increase the
production capability above the current capacity of 5,000 barrels of oil
per day.
"The revised assessment, once again, confirms that the Kurdamir Discovery is a
giant field containing contingent resources of almost a billion barrels of oil
equivalent, a significant oil and gas resource," said Simon Hatfield,
WesternZagros's Chief Executive Officer. "We look forward to submitting a
declaration of commerciality on the Kurdamir Block and moving towards
development of this exceptional resource."
"On the Garmian block, we're encouraged that the Baram-1 well discovered light
oil in the Oligocene. We are evaluating the Baram-1 test results, logs, and core
data and integrating with the 3D seismic data to assess the potential of the
discovery. We are also encouraged that Hasira-1 has confirmed the extension of
the Sarqala oil discovery in the Jeribe reservoir. The Hasira-1 well will now
drill into the Oligocene and we are looking forward to the results. "
"The development of the Garmian Block is advancing as we have filed the
declaration of commerciality, based on the Sarqala Discovery, with the Kurdistan
Regional Government. This is the first step in taking WesternZagros from a
frontier explorer to a cash flow-generating company. As the Kurdistan Region
moves towards crude oil exports through the newly constructed pipeline, we
foresee our high quality, light oil as a valued component to the Kurdish export
blend."
Revised Resources Estimate - Kurdamir Block
WesternZagros has re-evaluated the contingent and prospective resource estimates
for the Oligocene reservoir in the Kurdamir structure based on new information
obtained from the drilling of the Kurdamir-3 appraisal well and the
interpretation of 3D seismic data. The revised resources assessment has been
audited by our independent reserves evaluator, Sproule International Limited
("Sproule"), as of February 10, 2014 resulting in no material change.
The revised mean estimate of gross unrisked contingent resources ("Mean
Contingent Resources") rose to 750 million barrels of oil equivalent ("MMBOE")
as compared to 717 MMBOE in the last resource estimate of February 8, 2013 (the
"2013 Assessment"), an increase of 5 percent. On an oil basis, the Mean
Contingent Resources are now 386 million barrels of oil ("MMbbl") versus 390
MMbbl in the 2013 Assessment, an adjustment of less than one percent. The
combined Mean Contingent Resources estimates for the Oligocene and Eocene
reservoirs in the Kurdamir Block are now 976 MMBOE and 541 MMbbl of oil.
The revised mean estimate of gross unrisked prospective resources ("Mean
Prospective Resources") for the Oligocene reservoir at Kurdamir is now 1,084
MMbbl of oil, effectively unchanged from the 2013 Assessment of 1,076 MMbbl of
oil.
Tables 1(a) and 1(b), shown further below, provide the revised estimates of the
gross unrisked recoverable contingent and prospective resources for the
Oligocene reservoir of the Kurdamir structure as audited by Sproule as of
February 10, 2014. The tables also include the unchanged resource estimates for
the Eocene and Cretaceous reservoirs. Further details in respect of the
re-evaluation of the contingent and prospective resources for the Kurdamir
Oligocene reservoir on the Kurdamir Block are disclosed in the Company's
Material Change Report, dated February 13, 2014, which is available at
www.westernzagros.com and on SEDAR at www.sedar.com.
Sproule carried out its independent audits in accordance with the current
guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE
Handbook") and in accordance with National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities. Pursuant to the COGE Handbook, an audit
is the process whereby an independent qualified reserves auditor carries out
procedures designed to allow the auditor to provide reasonable assurance that a
reporting issuer's reserves data (or specific parts thereof) have, in all
material respects, been determined and presented in accordance with the COGE
Handbook and are, therefore, free of material misstatement.
Baram-1 Well - Garmian Block
The Baram-1 well targeted a prospect with the potential of approximately 300
MMBOE of gross prospective resources in the Oligocene reservoir. An open-hole
test of this reservoir at Baram has confirmed a gross interval of 73 metres of
light oil that flowed 42 degree API oil and water at an approximate rate of 600
barrels per day. The wireline log and test data obtained indicate the test was
conducted across an oil water contact in low permeability reservoir. Despite the
indications of low permeability in the reservoir, the position of the
interpreted oil water contact indicates the presence of a gross hydrocarbon
column in excess of 500 metres if it extends to the crest of the Baram
structure. The well will be suspended while the Company integrates the wireline
log and test results with the 3D seismic interpretation across the structure.
Based on the result of this analysis, the Company will make a determination on
whether to pursue additional appraisal operations on Baram.
Hasira-1 Well - Garmian Block
The Hasira-1 well has two objectives, an appraisal of the Sarqala-1 discovery in
the Jeribe reservoir and the exploration of the deeper Oligocene reservoir. The
well is targeting gross prospective resources of 25 to 50 MMBOE in the Jeribe
and 25 to 50 MMBOE in the Oligocene. Wireline log interpretations and an
open-hole test in the Jeribe reservoir has confirmed the presence of oil and
similar reservoir properties as observed in Sarqala-1. The open-hole test flowed
oil to surface. However, due to mechanical issues, the test was prematurely
suspended before the well had cleaned up. The mechanical issues have been
resolved, casing has been set across the Jeribe interval, and the well is now
preparing to drill ahead to the deeper Oligocene reservoir. Upon reaching total
depth, a testing program will be determined for the Oligocene reservoir.
Additional testing in the Jeribe may be conducted subject to the Oligocene test
results.
Tables 1(a) and 1(b)
---------------------------------------------------------------------------
Table 1(a)
Gross Unrisked
Contingent
Resources (1),(2)
Kurdamir Block Oil,
Gas and Condensate
Oligocene Reservoir
as of Feb 10, 2014
Eocene Reservoir Low Best
as of Feb 8, 2013 Estimate(5)Estimate(6)
--------------------------------------------------------
Prospect Reservoir Hydrocarbon P90 (1C) P50 (2C)
--------------------------------------------------------
Type MMbbl/Bcf MMbbl/Bcf
--------------------------------------------------------
Tertiary
Kurdamir Oligocene Oil 220 366
--------------------------------------------------------
Solution
Gas 211 380
--------------------------------------------------------
Associated
Gas(4) 999 1414
--------------------------------------------------------
Condensate 34 55
--------------------------------------------------------
MMBOE(9) 456 720
--------------------------------------------------------
Tertiary
Kurdamir Eocene Oil 69 138
--------------------------------------------------------
Solution
Gas 115 245
--------------------------------------------------------
Associated
Gas 90 130
--------------------------------------------------------
Condensate 2 3
--------------------------------------------------------
MMBOE 105 204
--------------------------------------------------------
Kurdamir Total Mean MMbbl Oil Only - Gross Unrisked
Contingent Resources
--------------------------------------------------------
Kurdamir Total Mean MMBOE - Gross Unrisked Contingent
Resources
---------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 1(a)
Gross Unrisked
Contingent
Resources (1),(2)
Kurdamir Block Oil,
Gas and Condensate
Oligocene Reservoir
as of Feb 10, 2014
Eocene Reservoir High Mean
as of Feb 8, 2013 Estimate(7) Estimate(8)
---------------------------------------------------------
Prospect Reservoir Hydrocarbon P10 (3C) Mean
---------------------------------------------------------
Type MMbbl/Bcf MMbbl/Bcf
---------------------------------------------------------
Tertiary
Kurdamir Oligocene Oil 576 386
---------------------------------------------------------
Solution
Gas 626 404
---------------------------------------------------------
Associated
Gas(4) 1926 1443
---------------------------------------------------------
Condensate 80 56
---------------------------------------------------------
MMBOE(9) 1081 750
---------------------------------------------------------
Tertiary
Kurdamir Eocene Oil 263 155
---------------------------------------------------------
Solution
Gas 480 280
---------------------------------------------------------
Associated
Gas 180 130
---------------------------------------------------------
Condensate 5 3
---------------------------------------------------------
MMBOE 378 226
---------------------------------------------------------
Kurdamir Total Mean MMbbl Oil Only - Gross
Unrisked Contingent Resources 541
---------------------------------------------------------
Kurdamir Total Mean MMBOE - Gross Unrisked
Contingent Resources 976
----------------------------------------------------------------------------
---------------------------------------------------------------------------
Table 1(b)Gross
Unrisked
Prospective
Resources (1),
(3)Kurdamir Block
Oil, Gas and
CondensateOligocen
e Reservoiras of
Feb 10, 2014
Eocene and
Cretaceous
Reservoirsas of Low Best
Feb 8, 2013 Estimate(5)Estimate(6)
--------------------------------------------------------
Prospect Reservoir Hydrocarbon P90 P50
--------------------------------------------------------
Type MMbbl MMbbl
--------------------------------------------------------
Tertiary
Kurdamir Oligocene Oil 552 1004
--------------------------------------------------------
Solution
Gas 549 1033
--------------------------------------------------------
MMBOE(9) 644 1176
--------------------------------------------------------
Tertiary
Kurdamir Eocene Oil 31 91
--------------------------------------------------------
Solution
Gas 50 160
--------------------------------------------------------
MMBOE 39 118
--------------------------------------------------------
Kurdamir Cretaceous Oil 38 108
--------------------------------------------------------
Solution
Gas 75 225
--------------------------------------------------------
Associated
Gas 65 140
--------------------------------------------------------
Condensate 2 4
--------------------------------------------------------
MMBOE 63 173
--------------------------------------------------------
Kurdamir Total Mean MMbbl Oil Only - Gross Unrisked
Prospective Resources
--------------------------------------------------------
Kurdamir Total Mean MMBOE - Gross Unrisked Prospective
Resources
---------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 1(b)Gross
Unrisked
Prospective
Resources (1),
(3)Kurdamir Block
Oil, Gas and
CondensateOligocen
e Reservoiras of
Feb 10, 2014
Eocene and
Cretaceous
Reservoirsas of High Mean
Feb 8, 2013 Estimate(7) Estimate(8)
---------------------------------------------------------
Prospect Reservoir Hydrocarbon P10 Mean
---------------------------------------------------------
Type MMbbl MMbbl
---------------------------------------------------------
Tertiary
Kurdamir Oligocene Oil 1739 1084
---------------------------------------------------------
Solution
Gas 1838 1129
---------------------------------------------------------
MMBOE(9) 2045 1272
---------------------------------------------------------
Tertiary
Kurdamir Eocene Oil 202 107
---------------------------------------------------------
Solution
Gas 350 185
---------------------------------------------------------
MMBOE 260 138
---------------------------------------------------------
Kurdamir Cretaceous Oil 243 130
---------------------------------------------------------
Solution
Gas 525 275
---------------------------------------------------------
Associated
Gas 260 155
---------------------------------------------------------
Condensate 8 4
---------------------------------------------------------
MMBOE 382 206
---------------------------------------------------------
Kurdamir Total Mean MMbbl Oil Only - Gross
Unrisked Prospective Resources 1321
---------------------------------------------------------
Kurdamir Total Mean MMBOE - Gross Unrisked
Prospective Resources 1616
----------------------------------------------------------------------------
Notes to Tables 1(a) and 1(b):
(1) The resources presented are the gross volumes estimated for the indicated
reservoirs without any adjustments for the Company's working interest or
encumbrances. For a description of the production sharing terms under the PSCs
(as defined below), see the Company's Annual Information Form dated March 22,
2013 ("AIF") under the heading "PSC Overview and Commitments - Revenue."
(2) Contingent Resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more
contingencies. Contingent resources have an associated chance of development
(economic, regulatory, market and facility, corporate commitment or political
risks). These estimates have not been risked for the chance of development.
There is no certainty that the contingent resources will be developed and, if
they are 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 contingent
resources. The Company's AIF under the heading "Resources Information" contains
additional detail on the specific contingencies which prevent the classification
of these contingent resources as reserves.
(3) 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 and facility, corporate commitment or
political risks). The chance of commerciality is the product of these two risk
components. These estimates have not been risked for the chance of discovery or
for 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. Prospective
resources are undiscovered resources that indicate development potential in the
event the discovery is commercial and should not be construed as reserves or
contingent resources.
(4) The gross unrisked contingent resources for gas reflect reductions for
condensate recovery, surface losses, and fuel gas.
(5) Low Estimate is considered to be a conservative estimate of the quantity
that will actually be recovered. It is likely that the actual remaining
quantities recovered will exceed the low estimate. If probabilistic methods are
used, there should be at least a 90 percent probability (P90) that the
quantities actually recovered will equal or exceed the low estimate.
(6) Best Estimate is considered to be the best estimate of the quantity that
will actually be recovered. It is equally likely that the actual remaining
quantities recovered will be greater of less than the best estimate. If
probabilistic methods are used, there should be at least a 50 percent
probability (P50) that the quantities actually recovered will equal or exceed
the best estimate.
(7) High Estimate is considered to be an optimistic estimate of the quantity
that will actually be recovered. It is unlikely that the actual remaining
quantities recovered will exceed the high estimate. If probabilistic methods are
used, there should be at least a 10 percent probability (P10) that the
quantities actually recovered will equal or exceed the high estimate.
(8) Mean Estimate is the average from the probabilistic assessment.
(9) Barrels of oil equivalent (BOEs) may be misleading, particularly if used in
isolation. A BOE volume conversion ratio of 6 Mcf: 1 bbl has been used and is
based on an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead. Given
that the value ratio based on the current price of oil as compared to gas is
significantly different from the energy equivalency of 6:1, this conversion
ratio may be misleading as an indication of value.
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".
This news release contains certain forward-looking information relating, but not
limited, to future drilling and appraisal plans, the timing associated
therewith, future production potential and resources. 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 results are not necessarily indicative of
long-term performance or of ultimate recovery. 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, the risk of adverse
determinations by governmental authorities, the risk of arbitrating and
enforcing claims against entities that may claim sovereignty and other risks
associated with international activity and foreign governmental sovereignty over
the areas in which the Company's operations are conducted. For further
information on WesternZagros and the risks associated with its business, please
see the Company's Annual Information Form dated March 22, 2013 ("AIF") which is
available on SEDAR at www.sedar.com.
In addition, statements relating to "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 which are as follows. "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. "Contingent
resources" are those quantities of petroleum estimated, as of a given date, to
be potentially recoverable from known accumulations using established technology
or technology under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies. Contingent resources
have an associated chance of development (economic, regulatory, market and
facility, corporate commitment or political risks). The contingent resources
estimates referred to herein have not been risked for the chance of development.
There is no certainty that the contingent resources will be developed and, if
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 contingent resources.
The resource estimates presented are gross volumes for the indicated reservoirs,
without any adjustment for the Company's working interest or encumbrances. A
barrel of oil equivalent (BOE) is determined by converting a volume of natural
gas to barrels using the ratio of 6 thousand cubic feet (Mcf) to one barrel.
BOEs may be misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. Given that the value ratio based on the current
price of oil as compared to natural gas is significantly different from the
energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be
misleading as an indication of value. The Company's Statement of Oil and Gas
Information contained in the AIF and its material change report dated February
13, 2014 contain additional detail with respect to the Company's resource
assessments and includes the significant risks and uncertainties associated with
the estimates and the recovery and development of the resources, and the
specific contingencies which prevent the classification of the contingent
resources as reserves. In addition, total or combined mean estimates of
resources which are presented herein are an arithmetic sum of the mean estimates
for individual reservoirs and each such individual mean estimate is the average
from the probabilistic assessment that was completed for the reservoir. Readers
should refer to the AIF and the material change report for a detailed breakdown
of the high (P10), low (P90) and best (P50) estimates for each of the individual
reservoir assessments.
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
WESTERNZAGROS RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50(R) COMPANY IN 2012
AND 2013. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS USED UNDER LICENSE.
FOR FURTHER INFORMATION PLEASE CONTACT:
WesternZagros Resources Ltd.
Greg Stevenson
Chief Financial Officer
(403) 693-7007
investorrelations@westernzagros.com
WesternZagros Resources Ltd.
Tony Kraljic
VP Business Development
(403) 693-7011
investorrelations@westernzagros.com
WesternZagros Resources Ltd.
Lisa Harriman
Manager of Investor Relations
(403) 693-7017
investorrelations@westernzagros.com
www.westernzagros.com
Smithfield Group
John Kiely/James McFarlane/Brett Jacobs
+44 (0) 20 7360 4900
jkiely@smithfieldgroup.com
Jmcfarlane@smithfieldgroup.com
bjacobs@smithfieldgroup.com
WesternZagros Resources Ltd. (TSXV:WZR)
Historical Stock Chart
From Jan 2025 to Feb 2025
WesternZagros Resources Ltd. (TSXV:WZR)
Historical Stock Chart
From Feb 2024 to Feb 2025
