WesternZagros Resources has announced a strategic investment agreement with the Abu Dhabi National Energy Company PJSC ("TAQA"). The company's shares have risen 23% since Friday's close.
Under the Agreement, TAQA will purchase, through a private placement, 74 million common shares in the Company at C$0.63 per share for gross proceeds of C$46,620,000. When this private placement is completed, TAQA will own approximately 19.9 per cent of the Company's issued and outstanding common shares.
WesternZagros's Chief Executive Officer, Simon Hatfield (pictured) said:
"This landmark agreement represents a significant leap forward for us. TAQA is an excellent strategic investor for WesternZagros given their proven track record, their support for our direction and their deep knowledge of our operating region. We are excited about the opportunities we are pursuing in the next twelve months, including further appraisal of the Sarqala and Kurdamir discoveries, and exploration drilling at Mil Qasim. We remain confident that our conservative, step-wise approach to realizing the full potential of our exceptional exploration assets will deliver results for our shareholders in the future."
TAQA is a global energy company that operates on four continents. It is mainly involved in upstream oil and gas, power generation and water desalination. Under the terms of the Agreement, a representative from TAQA will join the Company's Board of Directors. In addition, WesternZagros has granted certain rights to TAQA to participate for its pro-rata share in future equity issuances by the Company. The Shares issued under the Agreement will be subject to a hold period until June 30, 2012.
Carl Sheldon, General Manager of TAQA, adds:
"This investment in WesternZagros reflects our focus on developing TAQA's footprint in the MENA (Middle East-North Africa) region. TAQA brings technical and operational expertise and a proven track record in developing challenging oil and gas projects, while WesternZagros has already built successful operations in the Kurdistan Region of Iraq. We believe that the fit between these complementary strengths will yield the potential for significant added value through future developments."
The proceeds from the private placement will be used towards WesternZagros's 2011/2012 capital and operating program. The Agreement is subject to certain customary conditions and regulatory approvals, including the approval of the TSX Venture Stock Exchange. The Company expects the closing to occur on or about October 31, 2011.