Westernzagros Resources Ltd. Announces Operating Results for the First Quarter Ended March 31, 2014
May 21 14
WesternZagros Resources Ltd. announced operating results for the first quarter ended March 31, 2014. WesternZagros's assets comprise two contract areas, the Garmian and Kurdamir blocks, with significant oil and gas discoveries on both. These blocks are on trend with the super-giant Kirkuk oil field and adjacent to a number of prolific oil and gas discoveries. Operated Joint Venture: Garmian Block: The Company declared the commerciality of the Sarqala Discovery on December 23, 2013, and design work is underway on future development plans for the oil resources in the Sarqala area. As part of the Sarqala development plan, a workover commenced in March 2014 on the Sarqala-1 well to increase the production capability above the current capacity of 5,000 barrels of oil per day (bbl/d) up to 10,000 bbl/d. Upon approval of the development plan, the Company anticipates commencing oil sales into the domestic market or into the export market via the new Kurdistan Region-Turkey pipeline. The Hasira-1 well has reached a total depth of 4,181 metres, drilling through both the Jeribe and Oligocene reservoirs. Logging and initial open hole tests conducted in both reservoirs have confirmed light oil in both the Jeribe and Oligocene reservoirs. The open hole test completed in the Oligocene reservoir flowed oil to surface during an initial clean up flow, however the test was prematurely terminated after six hours due to formation debris plugging the tubing. Estimated rates from the cleanup flow period were 3,000 barrels per day of fluid, with up to 40% oil cut, the balance being drilling fluids. The oil flowed to surface was consistent with the oil produced from Sarqala-1, approximate 40 degree API and no indications of H2S. Currently the Company is casing the Oligocene reservoir section, and then will suspend the well for future testing of both the Oligocene and Jeribe reservoirs utilizing the more cost-effective workover rig which will be moved to Hasira-1 once it has completed the workover of Sarqala-1. Non-Operated Joint Venture: Kurdamir Block -- WesternZagros updated its 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 well and the interpretation of 3D seismic data. The revised resources assessment has been audited by the Company's independent reserves evaluator, Sproule International Limited, as of February 10, 2014, resulting in a revised mean estimate of gross unrisked contingent resources of 750 MMBOE, an increase of 5% from those previously recognized. On an oil basis, the Mean Contingent Resources are now 386 million barrels of oil (MMbbl). The combined Mean Contingent Resources estimates for the Oligocene and Eocene reservoirs in the Kurdamir Block are now 976 MMBOE or 541 MMbbl on an oil basis. 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 a previous estimate of 1,076 MMbbl of oil. Subsequent to updating the contingent and prospective resources, the Company has conducted the following work to better understand the Kurdamir discovery and prepare for future development activities and for further delineation of the prospective resources: A 44-day extended well test (EWT) from the drill stem test (DST) 6 interval at the Kurdamir-2 well. Cumulative oil production was approximately 90,000 barrels and during this time no formation water was produced. The Company views this information as support that the current contingent resource estimates, which limit lowest known oil to a depth in the range between -2,049 and -2,081 mSS, represents a conservative view. During testing, the oil flow rate was restricted to limit the volume of gas flared as per the requirements of the KRG.
Westernzagros Consider Strategic Alternatives
May 21 14
Westernzagros Resources Ltd. (TSXV:WZR) said that it has hired Citigroup Global Markets Inc. to consider strategic alternatives that could include a corporate sale or sale of assets. Board of Directors has established a Special Committee to review all financing and strategic alternatives available to the Company with a view to enhancing shareholder value. Special Committee continues to consider all available alternatives for enhancing shareholder value, which may include, but are not limited to, a potential sale of the Company, a merger or other business combination, the sale of some or all of the assets of the Company in one or more transactions, the completion of a rights offering or other equity or debt financing or any combination of these alternatives.