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Announces 2009 First Quarter Results

posted on May 13, 2009 01:14AM
May 12, 2009
WesternZagros
May 12, 2009
WesternZagros Announces 2009 First Quarter Results
CALGARY, ALBERTA--(Marketwire - May 12, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

WesternZagros Resources Ltd. ("WesternZagros" or the "Company") (TSX:WZR) is pleased to report its results for the three month period ended March 31, 2009, key highlights and activities to date.

- WesternZagros spudded its second well, Kurdamir-1, in the Kurdistan Region of Iraq on May 11, 2009. Total depth for Kurdamir-1 is planned to be approximately 4,000 metres and it is expected to take five to six months to drill. Any testing program will require additional time.

- Sarqala-1 was drilled to a depth of 4,357 metres. The well penetrated the Lower Fars, Jeribe and Euphrates Formations and recorded numerous indications of oil and gas in these formations. While attempting to complete wireline logging operations across the intervals with the oil and gas indications, the equipment encountered a wellbore obstruction which prevented logging. After drilling through the obstruction, the drilling assembly became stuck in the hole and subsequent recovery operations were unsuccessful. Sarqala-1 was suspended and the feasibility and merits of future drilling options are under evaluation. Numerous learnings from the drilling of Sarqala-1 well have been applied to the design of the Kurdamir-1 well.

- Following the completion of its seismic program, WesternZagros completed an update of its inventory of prospects and leads and an assessment of Block 44's gross undiscovered resources. This assessment was independently audited by Sproule International Ltd. WesternZagros' best estimate of gross unrisked prospective oil resources in Block 44 is 2.4 billion barrels as of March 31, 2009. WesternZagros is enthusiastic about the exploration potential of Block 44, with the assessment identifying a number of significant prospects and leads beyond Kurdamir-1.

- As at March 31, 2009, WesternZagros had $111.8 million in cash and cash equivalents.

- For the three month period ended March 31, 2009, WesternZagros incurred capital expenditures of $16.9 million related to its 60 percent funding requirement for its PSC activities and certain payments required under the PSC.

- WesternZagros had a net loss of $0.3 million for the quarter, mainly comprised of the general and administrative expenses incurred by the Company, which was partially offset by the recovery of income tax originally paid by the Company in 2008.

- The Board of Directors of WesternZagros appointed Mr. Simon Hatfield as Chief Executive Officer of the Company effective April 1, 2009. The appointment reflects the original senior management transition plan put in place as part of the WesternZagros spin out from Western Oil Sands Inc. in October 2007. Mr. Fred Dyment remains as Chairman of the Board of Directors where he previously served as Executive Chairman of the Company.

- At the end of February 2009, WesternZagros operations achieved a combined total exposure of three million person hours and the Company has continued this performance with no Lost Time Incidents to date. This is a significant achievement and demonstrates the commitment of the Company's employees and contractors to the safety and security of its operations.

- During the first quarter of 2009, WesternZagros and its co-venturers continued to focus on water supply and management, education and health care in the Garmian region under our Corporate Social Responsibility program.

Management's Discussion and Analysis

The following management's discussion and analysis ("MD&A") reviews WesternZagros Resources Ltd.'s ("WesternZagros" or the "Company") financial condition, activities and results of operations for the period ended March 31, 2009. It should be read in conjunction with the unaudited financial statements as at March 31, 2009 and period then ended prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). The effective date of this MD&A is May 11, 2009. All references herein to $ are in United States dollars.
CALGARY, ALBERTA--(Marketwire - May 12, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

WesternZagros Resources Ltd. ("WesternZagros" or the "Company") (TSX:WZR) is pleased to report its results for the three month period ended March 31, 2009, key highlights and activities to date.

- WesternZagros spudded its second well, Kurdamir-1, in the Kurdistan Region of Iraq on May 11, 2009. Total depth for Kurdamir-1 is planned to be approximately 4,000 metres and it is expected to take five to six months to drill. Any testing program will require additional time.

- Sarqala-1 was drilled to a depth of 4,357 metres. The well penetrated the Lower Fars, Jeribe and Euphrates Formations and recorded numerous indications of oil and gas in these formations. While attempting to complete wireline logging operations across the intervals with the oil and gas indications, the equipment encountered a wellbore obstruction which prevented logging. After drilling through the obstruction, the drilling assembly became stuck in the hole and subsequent recovery operations were unsuccessful. Sarqala-1 was suspended and the feasibility and merits of future drilling options are under evaluation. Numerous learnings from the drilling of Sarqala-1 well have been applied to the design of the Kurdamir-1 well.

- Following the completion of its seismic program, WesternZagros completed an update of its inventory of prospects and leads and an assessment of Block 44's gross undiscovered resources. This assessment was independently audited by Sproule International Ltd. WesternZagros' best estimate of gross unrisked prospective oil resources in Block 44 is 2.4 billion barrels as of March 31, 2009. WesternZagros is enthusiastic about the exploration potential of Block 44, with the assessment identifying a number of significant prospects and leads beyond Kurdamir-1.

- As at March 31, 2009, WesternZagros had $111.8 million in cash and cash equivalents.

- For the three month period ended March 31, 2009, WesternZagros incurred capital expenditures of $16.9 million related to its 60 percent funding requirement for its PSC activities and certain payments required under the PSC.

- WesternZagros had a net loss of $0.3 million for the quarter, mainly comprised of the general and administrative expenses incurred by the Company, which was partially offset by the recovery of income tax originally paid by the Company in 2008.

- The Board of Directors of WesternZagros appointed Mr. Simon Hatfield as Chief Executive Officer of the Company effective April 1, 2009. The appointment reflects the original senior management transition plan put in place as part of the WesternZagros spin out from Western Oil Sands Inc. in October 2007. Mr. Fred Dyment remains as Chairman of the Board of Directors where he previously served as Executive Chairman of the Company.

- At the end of February 2009, WesternZagros operations achieved a combined total exposure of three million person hours and the Company has continued this performance with no Lost Time Incidents to date. This is a significant achievement and demonstrates the commitment of the Company's employees and contractors to the safety and security of its operations.

- During the first quarter of 2009, WesternZagros and its co-venturers continued to focus on water supply and management, education and health care in the Garmian region under our Corporate Social Responsibility program.

Management's Discussion and Analysis

The following management's discussion and analysis ("MD&A") reviews WesternZagros Resources Ltd.'s ("WesternZagros" or the "Company") financial condition, activities and results of operations for the period ended March 31, 2009. It should be read in conjunction with the unaudited financial statements as at March 31, 2009 and period then ended prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). The effective date of this MD&A is May 11, 2009. All references herein to $ are in United States dollars.
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