Download - Corporate Fact Sheet - WesternZagros · / Corporate Fact Sheet 1 Corporate Fact Sheet WesternZagros is a publicly-traded, Calgary-based, international oil and gas company engaged

1 / Corporate Fact Sheet

Corporate Fact Sheet

WesternZagros is a publicly-traded, Calgary-based, international oil and gas company engaged in

acquiring properties and exploring for, developing and producing crude oil and natural gas in the

Kurdistan region of Iraq. As only the fourth international company to enter Kurdistan,

WesternZagros was able to hand-pick its exploration block in 2005, recognizing the potential for a

huge light oil resource base in what is now one of the world’s hottest exploration spots. The

company holds a 40% working interest in two Production Sharing Contracts (PSCs), both of which

are on trend with, and adjacent to, a number of prolific historic oil and gas discoveries.

WesternZagros has drilled four exploration wells resulting in four discoveries, for a 100% success

rate.



Table 1: Prospective and contingent resource estimates audited by Sproule International Limited. Please refer to the Company’s Annual Information Form dated March 26, 2012 and the Company’s Material Change Report dated April 20, 2012

Financial Snapshot (May 8, 2012)

Symbol / Exchange: WZR / TSX Venture Exchange First Listed: October 22, 2007 Basic Shares Outstanding: 371.2 million Director & Officer Ownership: 7.6% Market Capitalization: $397 million CDN Average Daily Trading Volume (3 mo): 1.8 million Working Capital: $41.0 million US (as at Dec 31, 2011) Headquarters: Calgary, Canada

Oil and Gas Resources

Audited prospective resource estimates on WesternZagros’s exploration blocks total 3.2 billion barrels of oil, or 4.7 billion barrels of oil, gas and condensate. These numbers represent combined mean estimates of gross unrisked prospective resources on the Company’s PSC Lands, as illustrated in Map 1 and Table 1.

Map 1: Leads and prospects on the Kurdamir and Garmian Blocks

Tables 1(a) Gross Unrisked

Contingent Resources

Kurdamir and Garmian Blocks

Oil, Gas and Condensate

Play / Prospect Mean Estimate Oil Only MMbbl

Mean Estimate MMBOE MMbbl

Kurdamir Block

Kurdamir 147 384

Garmian Block

Sarqala 24 31

Total Contingent Mean Estimate 171 415

Tables 1(b) Gross Unrisked

Prospective Resources

Kurdamir and Garmian Blocks

Oil, Gas and Condensate

Play / Prospect Mean Estimate Oil Only MMbbl

Mean Estimate MMBOE MMbbl

Kurdamir Block

Kurdamir 1,455 1,879

Garmian Block

Upper Fars Fault Trap Play 705 798

Upper Fars Bawanoor Saddle Play 120 282

Zardi Complex (Zardi, Sergdan, Tilako) 233 649

Chwar 25 36

Alyan 17 34

Mil Qasim 106 121

Sarqala 296 463

Baran 116 292

Qulijan 86 183

Sub Total Kurdamir Block 1,455 1,879

Sub Total Garmian Block 1,704 2,858

Total Prospective Mean Estimate 3,159 4,737

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent resources have an associated chance of development (economic, regulatory, market and facility, corporate commitment or political risks). These estimates have not been risked for the chance of development. There is no certainty that the contingent resources will be developed and, if they are developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the contingent resources. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development (economic, regulatory, market and facility, corporate commitment or political risks). The chance of commerciality is the product of these two risk components. There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources. Prospective resources are undiscovered resources that indicate development potential in the event the discovery is commercial and should not be construed as reserves or contingent resources. Barrels of oil equivalent (BOEs) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl has been used and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.



Petroleum Contracts

The Kurdamir and Garmian PSCs each govern separate contract areas. WesternZagros holds a 40% working interest in both PSCs. The Kurdamir contract area (340 square kilometres) is operated by Talisman, with a 40% working interest. The Garmian contract area (1,780 square kilometres) is operated by WesternZagros with a 40% working interest to be assigned by the KRG to a yet to be determined Third Party Participant. The KRG holds a 20% working interest in both PSCs. Under the terms of the Company’s PSCs, the schematic illustrates the sharing of oil. Under the PSC terms, the contractor’s portion of “Profit Oil” is based on a sliding scale from 35% to 16% depending on the R-Factor. The R-Factor is established by reference to the ratio of cumulative revenues over cumulative costs. When the ratio is below one, the contractor is entitled to 35% of the Profit Oil. The contractor’s percentage is then reduced on a linear sliding scale to a minimum of 16% when the ratio equals two or greater.

Highlights

100% drilling success – 4 wells and 4 discoveries

In March 2012, WesternZagros announced the discovery of a 118 metre oil leg in the Kurdamir-2 Oligocene reservoir. Subsequent analysis confirmed the discovery of a giant oil field with over 1 billion barrels of contingent and prospective hydrocarbon resource mean estimates for the Kurdamir Oligocene reservoir. These estimates were independently audited by Sproule International Limited.

In October 2011, transitioned from an exploration to an exploration and production company within four months of the Sarqala-1 discovery now producing over 5,000 barrels per day of light oil from the extended well test of our Sarqala-1 well. Our crude is trucked and sold on the domestic market.

In October 2011, closed a strategic investment with the Abu Dhabi

National Energy Company PSCJ (TAQA) for proceeds of Cdn$46.6 million.

In June 2011, WesternZagros announced a significant oil discovery that flowed 40 degree API oil at test rates of over 9,000 bbl/d from the Sarqala-1 well.

* WesternZagros funds the KRG costs, ultimately to be recovered by WesternZagros through KRG’s share of Cost Recovery Oil. For the Garmian Block only, the current PSC requires that the Third Party Participant Interest (“TPPI”) will be required to pay for half of the KRG’s carried share. This will be confirmed once the TPPI is assigned. ** WesternZagros initially funds the 40% of the costs for the third party participant until the TPPI is assigned by the KRG. The amounts funded by WesternZagros for the TPPI will be repaid upon assignment of this interest. *** KRG is entitled to a 3% capacity building bonus of WesternZagros profit oil for a net effective share of 38.8%.

**

Loading gantry at our facility at Sarqala-1 well showing tankers Ready to load the 40 degree API oil to truck to the local market



Mil Qasim well site – November 2011

Kurdamir-2 well site – October 2011

Next Steps: May 2012

Operations: The Company is currently drilling ahead in the Kurdamir-2 well and expects the test results from the Eocene and Cretaceous reservoirs in Q3 2012.

Further testing of the Oligocene reservoir in the Kurdamir-2 well is also anticipated in Q3 2012 after achieving total depth.

During the first half of 2012, the Company is planning, designing and procuring the long lead materials and services for Sarqala/Mil Qasim and Kurdamir 3D seismic programs, on

the Garmian Block, an appraisal well on Sarqala targeting the Jeribe reservoir (“Sarqala-2”), an appraisal and exploration well

targeting the Jeribe and Oligocene reservoirs (“Hasira-1”) and a multi well shallow drilling program targeting the Upper Bakhtiari

at Mil Qasim. Production: The Company is evaluating results from the extended well test to

plan to increase production beyond 5,000 barrels in the third quarter 2012.

Corporate: The Company takes a conservative approach to financing, resources

reporting and drilling. WesternZagros quotes resource numbers as recoverable estimates and numbers quoted have been independently audited by Sproule International Limited.

Corporate Social Responsibility

WesternZagros aspires to be an industry leader with respect to corporate social responsibility. The four key corporate social responsibility focus areas in the PSC Lands of Kurdistan are local employment, water supply, education and health care.

Executive Management Team Simon Hatfield Chief Executive Officer Greg Stevenson Chief Financial Officer Mike Tinkler VP Exploration and Reservoir Development Ian McIntosh VP Kurdistan Business Unit Tony Kraljic VP Business Development George Pinckney Executive Advisor, Corporate Projects Board of Directors David Boone President & CEO, Barrick Energy Inc. David Cook Executive Officer and Head of Upstream, TAQA Fred Dyment Chairman, WesternZagros Resources Ltd. John Frangos Independent Businessman Simon Hatfield CEO, WesternZagros Resources Ltd. James Houck President and CEO, The Churchill Corporation Randall Oliphant Executive Chairman and Director, New Gold Inc. William Wallace Independent Businessman Analysts Contact FirstEnergy David Przybyla/Gerry Donnelly 44 207 448 0251/214 / [email protected] / [email protected] GMP Ryan Savage 403 543 3584 / [email protected] Macqaurie Research David Popowich 403 539 8529 /[email protected] Peters & Co. Kam Sandhar 403 261 2230 / [email protected] Raymond James Rafi Khouri 403 509 0560 / [email protected] RBC Capital Markets Al Stanton 44 131 222 3638 / [email protected] Schachter Asset Management Josef Schachter 403 264 4413 / [email protected] Scotia Capital Gavin Wylie 403 213 7333 / [email protected] TD Securities Wael Halaoui 403 292 2804 / [email protected] Toll Cross Securities Inc. Eleanor Barker 416 365 7028 / [email protected] UBS George Toriola 403 695 3634 / [email protected]

Head Office: 600, 440 – 2

nd Avenue SW

Calgary, Alberta T2P 5E9 T. +1 403 693 7001 F. +1 403 233 0174 Investor Inquiries: T. +1 403 693 7017 [email protected]