By John Lee.
Shares in WesternZagros Resources hit a two-and-a-half-year high of Cdn$1.38 on Tuesday after the company announced that it has signed a strategic investment agreement with Crest Energy International LLC, under which Crest will purchase, through a non-brokered, private placement, 40,714,286 Common Shares of the Company at Cdn$1.40 per share for gross proceeds of Cdn$57 million.
This price represents an approximate 10 percent premium to the August 4, 2012 closing share price. When this private placement is completed, Crest will own just under 10 percent of the Company's issued and outstanding Common Shares.
In addition, WesternZagros confirmed receipt of approximately Cdn$83 million from Gazprom Neft Middle East B.V. with respect to the Amended Garmian Production Sharing Contract and the Third Party Participant assignment in the Garmian Block.
The Amended Garmian PSC also provides for an approximately Cdn$27 million reconciliation with the Kurdistan Regional Government ("KRG") with the net amount retained by WesternZagros being Cdn$56 million.
- WesternZagros announces Crest will purchase 40,714,286 Common Shares in the Company at Cdn$1.40 per share for gross proceeds of Cdn$57 million at an approximate 10% premium to the August 4 closing price.
- Following closing, Crest will own just under 10 percent of WesternZagros and a representative from Crest will join the Company's board of directors.
- As a result of this private placement to Crest, TAQA will have the right to purchase up to approximately 10.14 million additional Common Shares from the Company at Cdn$1.40 in order to maintain its current ownership interest of approximately 19.9 percent.
- WesternZagros received an approximate amount of Cdn$83 million in back costs from Gazprom Neft B.V. in connection with the Garmian TPP assignment, with net Cdn$56 million retained by WesternZagros after reconciliation with the KRG.