Financial
As at December 31, 2010, WesternZagros had $37.5 million in working capital.
For the year ended December 31, 2010, WesternZagros' share of capital expenditures associated with its PSC activities and other capitalized costs was $67.2 million. Expenditures for 2010 included $62.6 million of drilling-related costs; $1.0 million of geological and geosciences related work; $2.5 million of supervision and local office costs; $0.2 million of PSC related expenditures; and $0.9 million of corporate related expenditures.
Insurance
WesternZagros initiated a control of well insurance claim in the first quarter of 2010 related to the events at Kurdamir-1, which began when the well was drilled into a high pressure formation in the Gulneri Seal. These operations continued after a subsequent additional high pressure zone was encountered in the Aaliji Seal and continued until October 14, 2010, when the open hole was plugged and cemented up to approximately 2,500 metres, thus concluding well control operations.
The control of well insurance policy covering these claims has a net aggregate limit to the Corporation of $45 million, with a $0.4 million deductible. Under the terms of the insurance policy, the Corporation submits claims for these costs as they are incurred and paid and these claims are then subject to the review and approval of an adjuster appointed by the insurers. WesternZagros submitted its initial claim in the first quarter of 2010 and received initial confirmation of coverage from the insurers during the second quarter of 2010.
For the year ended December 31, 2010, WesternZagros credited $42.0 million of insurance recoveries, net of the $0.4 million deductible, related to the well control and recovery operations at Kurdamir-1 against the Kurdistan Region Exploration Project.
During the year ended December 31, 2010, the Corporation received $24.4 million of insurance proceeds from the insurers. Subsequent to December 31, 2010, further insurance proceeds of $11.5 million were received related to further approved interim claims. The Corporation has submitted the remaining costs incurred and continues to pursue the required approval for these amounts.
Corporate
During the first quarter of 2010, WesternZagros announced the appointment of Mr. Ian McIntosh to the new position of Vice President, Kurdistan Business Unit, to be resident in the Kurdistan Region. Mr. McIntosh brings to the Corporation over 30 years of international oil and gas experience, encompassing development and production engineering, in-country management and business development. This appointment was a reflection of the Corporation's desire to have additional executive ability in-country. Subsequently, during the second quarter of 2010, WesternZagros announced that Mr. Ian McIntosh had assumed the position of acting Senior Vice President, Engineering and Operations on an interim basis following the departure of Mr. Robert Theriault.
Comments are closed.