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WesternZagros eyes imminent Saqala-1 production in Kurdistan and further drills in 2015

27th November 2014

WesternZagros has suggested that it plans to bring its Garmian Block Sarqala-1 well into full production in early 2015 in the Kurdistan Region of Iraq

WesternZagros eyes imminent Saqala-1 production in Kurdistan and further drills in 2015
Preparations continue for the first two development wells on the Sarqala oilfield which are anticipated to spud in the first half of 2015

“To help the KRG achieve their targets, our immediate focus remains on establishing near-term production from the Sarqala-1 well, which we expect to occur early in 2015 following the KRG's approval of our development plan,” said Simon Hatfield, WesternZagros chief executive.

"We are well advanced with our transition from exploration and appraisal to development and production. There's reportedly 300,000 bbl/d of Kurdish crude currently flowing to Ceyhan, an anticipated increase to 500,000 bbl/d by the end of 2014, and the recent interim deal reached between Baghdad and Erbil on oil exports.”

An evaluation of the Garmian Block has recognised an initial 12 million barrels of gross Proved plus Probable light oil reserves (five million barrels gross to the company's working interest) as at September 1, 2014, although this represents only a small portion of the potential of the Sarqala Discovery.

The estimated net present value of future net revenue associated with the company's working interest share of these reserves is USD 75m, at a 10 per cent discount rate.

 “As part of this push for early production and cash flow, we're in the process of increasing our processing capability up to 15,000 bbl/d of oil. We're also advancing a number of broader development activities to expand the long-term, high growth potential of our resources."

Facility upgrades are underway and expected to be completed by year end to increase processing capacity from 10,000 bbl/d up to 15,000 bbl/d. After receiving approval from the KRG, the Company anticipates commencing oil sales into the domestic market or into the export market via the Kurdistan Region-Turkey pipeline. WesternZagros is making good progress in discussions with the KRG on the Garmian development plan that was submitted in June 2014.

Preparations continue for the first two development wells on the Sarqala oilfield which are anticipated to spud in the first half of 2015.

"We are proud of the success we have achieved to date, including our first booking of Reserves at Sarqala, and are building an inventory of world-class resources. We are excited by the long-term potential that both of our blocks hold for our Company and all stakeholders. Specifically, I want to thank all shareholders who recently participated in the rights offering and those who continue to provide ongoing support to WesternZagros. We look forward to reporting on our next phase of growth."

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