CALGARY, ALBERTA–(Marketwired – April 10, 2017) –
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 the operator, Gazprom Neft Middle East B.V. (“Gazprom Neft”) has successfully performed an acid stimulation on the Sarqala-1 well located on the Garmian Block in the Kurdistan Region of Iraq in order to increase the well productivity.
The acid stimulation was completed on March 31, 2017 and Sarqala-1 is currently producing at a stabilized rate of 7,100 barrels per day (“bbl/d”) which is close to the limit of the surface equipment in its current configuration. This flow is being achieved on a 48/64 inch choke with a wellhead pressure of 5,800 pounds per square inch (“psi”) and with reservoir drawdown of only 220 psi. This compared to a pre-stimulation flow of approximately 5,000 bbl/d on a 40/64 inch choke with a well head pressure of 4,150 psi and a reservoir drawdown of 2,150 psi. The current results represent a 42 percent increase in production rates. There continues to be no formation water produced. Further significant production increases are anticipated once the configuration of the surface equipment has been optimized.
Simon Hatfield, Chief Executive Officer of WesternZagros, commented, “These excellent results, combined with the significant increase in Garmian Reserves that we announced at year-end, reinforce our confidence in the quality of our Garmian Block. We congratulate Gazprom Neft on the results of the acid stimulation and will continue to work with them to optimize production. The enhanced deliverability from Sarqala-1, driven by the high-pressured Jeribe / Upper Dhiban reservoir, provides us with greater confidence in the production potential for future development wells.”
The Company’s calculations indicate the productivity index (“PI”) of Sarqala-1 has increased by an order of magnitude. The PI is a measure of the well’s potential to produce – it is the ratio of the production rate to the pressure drawdown at the reservoir. This substantial increase in PI anticipates further production gains as the Operator continues to optimize the surface facilities.
The Company will continue to monitor the increase in production rates and pressures and once sufficient data is obtained to demonstrate sustainability the Company will work with its independent auditors on the potential for a further increase to its reserves and their valuation.
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 statements relating to, but not limited to, expected costs and revenues and future development plans, including expected timing thereof and increased production rates therefrom. Forward-looking information typically contains statements with words such as “anticipate”, “estimate”, “expect”, “potential”, “could”, or similar words suggesting future outcomes. The Company cautions readers and prospective investors in the Company’s securities to not 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.
Forward looking information is not based on historical facts but rather on management’s current expectations as well as assumptions made by, and information currently available to management, concerning, among other things, development plans and concepts, future capital and other expenditures (including the amount, nature and sources of funding thereof), the ability to identify appropriate financing transactions, the outcomes of future well operations, results of drilling activity and testing, future capital and other expenditures (including the amount, nature and sources of funding thereof), the availability of debt financing or access to alternate financing, the continued ability to sell production in the domestic or export markets and the payments to be received in connection therewith, anticipated operating costs, future economic conditions, future currency and exchange rates, continued political stability, continued security in the Kurdistan Region, timely receipt of any necessary co-venturer, government or regulatory approvals, the successful resolution of any disputes, the Company’s continued ability to employ qualified staff and to obtain equipment in a timely and cost efficient manner and the participation of the Company’s co-venturers in joint activities. In addition, budgets are based upon WesternZagros’s current development plans and anticipated costs, both of which are subject to change based on, among other things, the outcome of negotiations with co-venturers and the government, the actual outcomes of well operations and the installation and commissioning of facilities, unexpected delays, availability of future financing and changes in market conditions. 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 development and production; inherent uncertainties in interpreting geological data; changes in plans with respect to capital expenditures; interruptions in operations together with any associated insurance proceedings; the uncertainty of estimates and projections in relation to timing, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks relating to domestic refining capacity and continuing ability to access the domestic market, risks relating to the ability to access export markets and receive payments in accordance with the terms of its production sharing contracts on a timely basis, the uncertainty associated with any dispute resolution proceedings, the uncertainty associated with negotiating with foreign governments and risk associated with international activity, including the lack of federal petroleum legislation and ongoing political disputes and recent terrorist activities in Iraq in particular.
Readers are cautioned that the foregoing list of important factors is not exhaustive and that these factors and risks are difficult to predict. The forward-looking statements contained in this news release are made as of the date of this news release and, except as required by law, WesternZagros does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. See the “Risk Factors” section of the Company’s Annual Information Form (AIF) dated March 16, 2016 filed on SEDAR at www.sedar.com for a further description of these risks and uncertainties facing WesternZagros. Additional information relating to WesternZagros is also available on SEDAR at www.sedar.com, including the Company’s AIF.
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
Senior VP Finance
WesternZagros Resources Ltd.
Manager of Corporate Communications and Administration