WesternZagros Resources has announced that Sproule International Limited ("Sproule") has completed an independent audit of the Company's resource assessment for the Jeribe/Upper Dhiban reservoir interval of the Sarqala-1 well. Sarqala-1 is located in the Company's Garmian Block in the Kurdistan Region of Iraq and was drilled on the crest of the Sarqala structure.
Consequently, the Company is now reporting, for the first time, contingent resources for Sarqala-1. The Company's mean estimate of gross contingent resources for this interval is 24 million barrels (MMBBL) of oil, or 31 million barrels of oil equivalent (MMBOE), as of September 7, 2011. This contingent resource number does not include the significant prospective resource potential on the flanks of the Sarqala structure deeper than the lowest known oil at 3,485 metres, nor the potential of an extension of this reservoir interval on the southwest flank of the structure.
WesternZagros's total mean estimate of gross unrisked prospective oil resources for this interval increased to 198 MMBBL, or 250 MMBOE, as of September 7, 2011. Previously the gross unrisked prospective mean estimates in the Jeribe reservoir of Sarqala-1 were 101 MMBBL, or 137 MMBOE. Tables 1 and 2, below, provide the ranges of estimates.
Contingent resources were assigned over a 66 metre gross pay zone from the top of the reservoir down to 3,485 metres as determined by wireline logs and production testing. This is the same interval that resulted in a test of up to 9,444 barrels of oil per day as reported on June 7, 2011.
These recent resource numbers represent an increase in the combined mean estimate of gross unrisked prospective resources for the Jeribe/Upper Dhiban, Oligocene, Eocene and Cretaceous reservoir intervals in the Sarqala Structure to 296 MMBBL of oil, or 463 MMBOE (previously these estimates were 199 MMBBL of oil, or 350 MMBOE), as shown in Table 3, below. They also represent an increase in the combined mean estimate of gross unrisked prospective resources on the Company's two contract areas in Kurdistan to 2.289 billion BBL of oil, or 3.683 billion BOE (previously these estimates were 2.192 billion BBL oil, or 3.570 billion BOE).
"We continue to be encouraged by the steadily continuing rise in recoverable resource estimates and look forward to starting the extended test of the Sarqala-1 well in the near future. Not only does the confirmation of contingent resources at Sarqala also result in a significant increase in prospective resources, it substantially reduces the risk associated with them. This report further confirms the tremendous prospectivity of our blocks' assets," said Simon Hatfield, WesternZagros' Chief Executive Officer.
Sproule carried out an independent audit of the Sarqala resources in the Jeribe/Upper Dhiban interval in accordance with the current guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Pursuant to the COGE Handbook, an audit is the process whereby an independent qualified reserves auditor carries out procedures designed to allow the independent qualified reserves auditor to provide reasonable assurance that a reporting issuer's reserves data (or specific parts thereof) have, in all material respects, been determined and presented in accordance with the COGE Handbook and are, therefore, free of material misstatement.
Table 1 and 2 below, provides summary estimates of the oil, and oil equivalent resources in all of the reservoirs included in this latest Sproule audit. A detailed table providing estimates of the gross unrisked prospective oil, associated gas, gas condensate and solution gas resources for the Jeribe/Upper Dhiban interval in the Sarqala-1 well is disclosed in the Company's Material Change Report dated September 14, 2011 which is available at www.sedar.com. Table 3 lists gross unrisked prospective resources for all potential reservoirs identified in the Sarqala structure. A detailed table providing estimates of the gross unrisked prospective oil, associated gas, gas condensate and solution gas resources for the Oligocene, Eocene and Cretaceous intervals in the Sarqala-1 well is disclosed in the Company's Material Change Report dated February 22, 2011 which is available at www.sedar.com.
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