WesternZagros Up on Q2 Results

By John Lee.

Shares in WesternZagros Resources were up more than 3% on Thursday as it announced its operating and financial results for the second quarter ended June 30, 2012.

Headlines:

  • WesternZagros completed a private placement with Crest at Cdn$1.40 per share for $57 million at an approximate 10% premium to the August 4 closing price.
  • The KRG has chosen Gazprom Neft to be the Third Party Participant (“TPP”) in the Garmian Block, with a 40 percent interest in the Garmian PSC. WesternZagros received a net amount of $56 million in back costs from Gazprom Neft and retains operatorship of the Garmian Block.
  • At the Kurdamir-2 well, Talisman and WesternZagros are in the final stages of preparation to test three intervals in the Cretaceous Shiranish reservoir which has a potential gross hydrocarbon pay interval of over 500 metres. Testing has not yet started but is anticipated to be within the next two weeks.
  • The Company reported a substantial increase in the mean estimate of gross unrisked prospective resources (“Mean Prospective Resources”) in the Eocene reservoir at Kurdamir. The revised Mean Prospective Resource is now 278 million barrels (“MMbbl”) of oil as of June 1, 2012 compared to 124 MMbbl reported previously.
  • WesternZagros had $18.5 million in working capital at end Q2 2012. Combined with the subsequent receipts of $57 million and $56 million net, from Crest and Gazprom Neft, respectively, the cash on hand is $131.5 million.
  • The Company estimates its capital expenditures for the second half of fiscal 2012 to be in the range of $60-70 million.

Commenting on the second quarter results and subsequent events, WesternZagros’s Chief Executive Officer, Simon Hatfield (pictured) said:

We look forward to working with our respective co-venturers on both of our Blocks as we ramp up for high potential exploration and appraisal activities. We will be drilling important new wells over the next 12 months.

“Our strategy is focused on exploration success, operational excellence and cost management. Our goal is to steadily increase efficiency and reliability. There is more to come from WesternZagros.

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