WesternZagros Announces Resources at Sarqala

Notes:

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. In this case, the Contingent resources are the gross volumes estimated for the Lower Miocene Jeribe/Upper Dhiban carbonate reservoirs at Sarqala-1 well, down to the lowest known oil from wireline log data at 3,485 metres subsea, without any adjustments for working interest or encumbrances.

Other than the prospective resources for the Oligocene, Eocene and Cretaceous reservoirs at the Sarqala-1 well which are as at February 18, 2011, as previously disclosed in the Company’s material change report dated February 22, 2011, which is available at www.sedar.com.

The prospective resources are the undiscovered potentially recoverable gross volumes estimated for the indicted reservoirs, without any adjustments for working interest or encumbrances. 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. 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.

The anticline structure contains both contingent and prospective resources, above and below the lowest known oil respectively. Prospective resources are also interpreted to extend southwest in the southwest flank area of the anticline. Prospective resources in the anticline are better imaged on seismic and therefore have lower risk than the prospective resources in the southwest flank area. Prospective resources volumes reported in Table 2 cannot be summed with the contingent resources in Table 1.

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.

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.

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.

Mean Estimate is the average from the probabilistic assessment.

Barrels of oil equivalent (BOEs) may be misleading, particularly if used in isolation. A BOE 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.

This resource disclosure coincides with the filing on SEDAR at www.sedar.com of a material change report, which includes the following additional information: the risks and level of uncertainty associated with the discovery and recovery of the resources, the risks and uncertainties relating to the development of any discovered resources, the significant positive and negative factors relevant to the estimates and the specific contingencies which prevent the classification of the foregoing contingent resources as reserves.

The combined mean estimate presented above for the gross unrisked prospective resources on the Company’s two blocks is a summation of mean estimates from a number of the Company’s prospects in addition to Sarqala, with each mean estimate being the average from the probabilistic assessment that was completed for each of the individual reservoirs within such prospects. The Company’s previous material change reports filed on SEDAR at www.sedar.com contain the low, best and high estimates for each individual reservoir and additional detail on the information used in the resource assessments 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. The prospective resource estimates for the Tertiary Oligocene reservoir at the Kurdamir-1 well are as previously disclosed in the material change report dated December 16, 2010. The prospective resource estimates for the Tertiary Eocene and Cretaceous reservoirs at the Kurdamir-1 well and the Upper Fars reservoir at Mil Qasim are as previously disclosed in the material change report dated January 17, 2011. The prospective resource estimates for the Oligocene, Eocene, and Cretaceous reservoirs at Qulijan and the Oligocene and Eocene reservoirs at Baran are as previously disclosed in the material change report dated February 22, 2011. The prospective resource estimates for the reservoirs at Bawanoor, Tilako, Zardi, Segrdan, Chwar, Alyan and the Upper Fars Fault Trap Play are as previously disclosed in the material change report dated July 19, 2011.

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