WesternZagros Completes Successful Oil Test at Kurdamir-2

The stabilized rate was achieved on a 44/64" choke with a wellhead flowing pressure of 1,705 psi. The oil was high-quality 42 degree API and no formation water was detected. The oil rate was restricted due to gas choking within the 3.5 inch completion tubing. The gas to oil ratio is indicative of gas being drawn down from the gas-oil contact, which is 83 metres above the test interval. Larger diameter tubing would allow higher oil test rates.

For example, the Company expects that the interval previously tested in DST#6 could flow oil at rates up to 7,000 bbl/d if larger tubing is used. The Company is in the process of completing a similar analysis for DST#7 and to determine the optimum tubing size for the completion.

The table below summarizes the flow rates from all three intervals tested within the 168 metres gross hydrocarbon column (22 metres of gas and 146 metres of oil) encountered in the Oligocene reservoir in the Kurdamir-2 well. The three intervals are composed of the two recent cased hole tests (DST#6 and DST#7) and the first open hole test conducted in March 2012 (DST#1) which was conducted across the gas-oil contact.

The Kurdamir-2 test and wireline log data have been analyzed in order to update contingent and prospective resource estimates for the Oligocene reservoir. The Company expects that the contingent resource estimates will materially increase. Updated resource estimates will be publicly released once confirmed by the Company's independent auditors.

The current independently audited unrisked mean estimates for the contingent resources in the Oligocene reservoir of the Kurdamir structure are 990 billion cubic feet of gas, 39 million barrels ("MMbbl") of condensate and 147 MMbbl oil as of April 20, 2012. The current independently audited unrisked mean estimate for the prospective resources in the Oligocene reservoir is 1,150 MMbbl prospective oil resources as of May 31, 2012.

Following the completion of Kurdamir-2, the Operator will move the rig to the Kurdamir-3 well location for an anticipated spud date in February 2013.

WesternZagros and Talisman each have a 40 percent working interest in the Kurdamir Block with the Kurdistan Regional Government ("KRG") holding the remaining 20 percent.

(Source: WesternZagros)