WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company") announced today its operating and financial results for the first quarter ended March 31, 2017. All amounts set out in this news release are in US dollars unless otherwise stated.
Commenting on the first quarter results and subsequent events, WesternZagros's Chief Executive Officer Simon Hatfield said:
"The leading news this quarter is of course our agreement with Crest to take WesternZagros private. Given the current market conditions, the Crest offer represents a significant premium to the share price at the time of the offer. The Company encourages shareholders to take advantage of this offer."
WesternZagros achieved several key financial and operational milestones during the first quarter 2017 and to date, including:
WesternZagros has posted its operating and financial results for the first quarter ended March 31, 2017 on its website. The financial statements, the Management Discussion and Analysis, and the Annual Information Form are available at www.westernzagros.com and on SEDAR at www.sedar.com.
WesternZagros continues to focus on advancing development in accordance with the approved Garmian FDP and securing KRG approval of the phased development plan for the Kurdamir Block in line with market conditions and dependent upon the sustainability of regular payments for production.
Following the successful acidization workover, the Company anticipates the average daily productive capacity of Sarqala-1 will range from 6,850 to 10,000 bbl/d for the remainder of 2017. Assuming continuous production and payments for the year, and an average Brent price of $50 to $55 per barrel, WesternZagros estimates 2017 revenues of $24 to $33 million.
The Company has $22.5 million in cash and cash equivalents as at March 31, 2017, plus the Bridge Loan proceeds of $30 million received subsequent to March 31, 2017, to advance the field development plans with its co-venturers. The Company continues its focus on strict cost management and estimates spending of approximately $48 million for the remainder of 2017 to operate the Sarqala production operations, advance the currently approved work programs of the Garmian and Kurdamir blocks with its co-venturers and fund WesternZagros head office costs. The first Garmian development well has been approved by the co-venturers and is expected to spud in July 2017 with a budgeted net cost to WesternZagros of $18 to 22 million. This is the Company's first Garmian well located with the benefit of 3D seismic data and is designed as a producing well for the Jeribe reservoir. The co-venturers have also approved a facilities work program for 2017 in order to debottleneck and expand the Sarqala production facility to an initial estimated capacity of 10,000 bbl/d and then to further increase to an estimated 15,000 bbl/d capacity by the end of the year and with an estimated cost net to the Company of $6 million.
Liquidity and Capital Resources
As at March 31, 2017, WesternZagros had $22.5 million in cash and cash equivalents. Subsequent to March 31, 2017, the Company received $30 million in proceeds under the Bridge Loan concurrent with entering into the Arrangement Agreement with Crest.
The Company's remaining 2017 capital budget is estimated to be approximately $48 million, including the Sarqala-2 well which has now been approved by the Garmian Block co-venturers. However, the development plan for the Kurdamir Block has not yet been approved by the KRG and the Company will continue to evaluate, monitor and assess relevant factors which may impact anticipated future capital requirements and spending, including the following:
About WesternZagros Resources Ltd.
WesternZagros is an international natural resources company focused on acquiring properties and exploring for, developing and producing crude oil and natural gas in Iraq. WesternZagros, through its wholly-owned subsidiaries, holds a 40 percent working interest in two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq. WesternZagros's shares trade in Canada on the TSX Venture Exchange under the symbol "WZR".
SOURCE: WesternZagros Resources Ltd.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.