WesternZagros Q1 Results and Updates

Baram-1 Exploration Well

The Baram-1 well is planned to spud in the third quarter of 2013, in order to explore a potential extension of the oil leg in the Oligocene reservoir of the Kurdamir discovery into the Garmian Block. If successful and the extension is confirmed, this well could add 200-300 MMBOE of Gross Mean Contingent Resources in the Garmian Block and possibly also confirm an additional 500-600 MMBOE of Gross Mean Contingent Resources on the Kurdamir Block. WesternZagros expects the well to take approximately five months to reach the planned total depth of 3,800 metres. A drilling rig will be deployed shortly from North America for transport to the Baram-1 location with an anticipated spud date in the third quarter 2013.

The completion of either Baram-1 or Hasira-1 in 2013 would fulfill the Company's obligations under the second exploration sub-period of the Garmian PSC, prior to any extension of such sub-period.

Upper Bakhtiari Three-Well Drilling Program

Upper Bakhtiari-1 was spudded on May 19, 2013. This is the first well that will explore the potential of the shallow (500 to 700 metres depth) Upper Bakhtiari formation in the southern part of the Garmian Block through a low cost, three well drilling program, targeting 29 MMBOE of Gross Mean Prospective Resources. If successful, the wells could be quickly tied into the existing Sarqala facilities for EWT production, subject to KRG approval.

Garmian Seismic Programs

WesternZagros has completed the acquisition phase of a 3D seismic appraisal survey over the Sarqala, Mil Qasim and adjacent Zardi Complex structures as well as the 2D seismic survey at Chwar which is located 22 kilometres west-northwest of Sarqala to elevate this low risk, Jeribe oil opportunity to drill ready status. The Chwar prospect will be ranked against the other prospects on the Garmian Block. The Company will utilize the 3D information to optimize the number and placement of future appraisal and development well, improve its understanding of fracturing within these structures and further evaluate the Bakhtiari, Upper Fars, Jeribe, Oligocene, Eocene and Cretaceous reservoirs on the southern portion of the Block. The Company also plans to conduct a 3D seismic program in the second half of 2013 over the northern portion of the Block targeting the Baram and Qulijan structures utilizing the seismic crew from the Kurdamir/Tophkana program. The 3D data over Baram will assist in determining whether Baram is an extension of the existing Kurdamir Oligocene discovery or a separate structure.

Planned expenditures for the remainder of 2013 include $27 million for the Hasira-1 well, $26 million for the Baram-1 well (expected to be spudded in the third quarter), $4 million for the Sarqala EWT facilities, $2 million for the first of three wells of the Mil Qasim Upper Bakhtiari program, $2 million for the remainder of the Garmian South seismic program, $5 million for the planned North Garmian 3D seismic program and $8 million for G&A and other costs. Contingent projects during 2013 may also include $4 million for anticipated Sarqala-1 work over and recompletion costs, subject to KRG approval, and $4 million for up to two additional wells at the Mil Qasim Upper Bakhtiari program, subject to successful results.

(Source: WesternZagros)

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