WesternZagros Provides Interim Update on Kurdamir-3 Testing

WesternZagros Provides Interim Update on Kurdamir-3 Testing 
CALGARY, ALBERTA -- (Marketwired) -- 08/21/13 -- WesternZagros
Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company")
has completed the first two drill stem tests (DST #1 and DST #2) on
the Kurdamir-3 well in the Kurdistan Region of Iraq. Because these
tests had unexpected results, WesternZagros is providing this interim
update before the testing program is complete.  
The first Kurdamir-3 test, DST #1, was conducted in a non-porous zone
at a depth below the deepest oil test conducted in the Oligocene at
the Kurdamir-2 well. After acidizing, this test flowed oil and spent
acid at non-commercial rates. The deepest oil now encountered in the
Oligocene is 2,788 metres. DST #2 was then conducted over four
low-permeability intervals further up-hole, also at depths below the
deepest oil test in Kurdamir-2 and flowed a mix of light crude oil
and water at low rates after acidizing. DST #2 gave the first
evidence of formation water the Company has seen in the Oligocene
reservoir at Kurdamir. While it appears that the well has reached a
transition zone or an oil-water contact at approximately the same
depth as the previous lowest known oil from the Kurdamir-2 well, the
results are difficult to interpret. Two more tests are planned for
the upper porous zone of the reservoir - at depths that were
oil-bearing in the Kurdamir-2 well. Testing will now extend to late
September or October. 
Simon Hatfield, Chief Executive Officer, of WesternZagros commented: 
"Large oilfields like Kurdamir will often present some anomalies in
the early stages of delineation, and this one is proving no
exception. We were surprised by the water cut in DST #2 because we
had seen evidence during drilling of oil throughout the interval.
There are also unusual aspects to the position of the water across
the four tested intervals in DST #2, so we are not yet certain
whether we have found an oil-water contact that will be consistent
across the reservoir, or a restricted compartment, sometimes known as
perched water, within the oil reservoir. The next two tests of the
shallower porous interval should provide a more indicative view on
the oil deliverability of the reservoir. While these first two test
results are not the best case scenario, we still have a large oil
discovery with more work yet to be done to assess it fully."  
KURDAMIR-3 INTERIM TEST RESULTS 
As operator of the Kurdamir-3 well, Talisman (Block K44) B.V. has
conducted two DSTs in the deepest zones of the Oligocene reservoir at
Kurdamir-3 and now plans to move up-hole to conduct two additional
drill stem tests. 
DST #1 and #2 were conducted in the lower part of the Oligocene
reservoir which exhibited poorer reservoir characteristics (including
fewer fractures) than the main porous zone tested in Kurdamir-2. Both
tests were conducted at depths below the base of DST #6 in the
Kurdamir-2 well which produced light oil at 3,450 barrels per day and
8.8 mmcf/d of natural gas. DST #3 and #4 will now be conducted in the
upper part of the porous zone of the Oligocene which was oil-bearing
in Kurdamir-2 and which is more than 87 meters below the depths of
the gas-oil contact as seen in Kurdamir-2.  
DST #1 was conducted over a perforated interval of 12 metres, between
2,776 and 2,788 metres, across a fracture zone below the base of the
reservoir with the objective of proving new lowest known oil. After
acidizing the interval, the zone produced a limited amount of oil and
spent acid.  
DST #2 was conducted over four perforated intervals within a gross
interval of 105 metres from 2,614 to 2,719 metres. After acidizing
the zones, the well produced 38-degree API oil at low rates with an
average water cut of 65 per cent. 
The Company is evaluating the test results. Preliminary
interpretation indicates that DST #2 may have spanned an oil-water
contact or encountered a transition zone. However, due to the oil
produced in DST #1, the Company is also evaluating whether this water
zone may be restricted in extent due to compartmentalization of the
reservoir. Figure 1 is an enlarged portion of a seismic section
through the Kurdamir-3 well where it penetrates the Oligocene
reservoir. The alternative interpretations of an oil-water contact or
restricted water zone ("perched water") are shown. Additional test
data and the interpretation of the 3D seismic recently acquired over
Kurdamir will assist in this evaluation. Regardless of the foregoing,
the interim test results from Kurdamir-3 have increased the risk
associated with the undiscovered Prospective Resource assessment that
the Company carries for the Kurdamir Oligocene reservoir. 
To view Figure 1, click the following link:
http://media3.marketwire.com/docs/wzr.jpg.  
BARAM-1 WELL 
The Baram-1 well, on the north portion of the Garmian Block, was
spudded on August 13, 2013 and has drilled ahead to the first casing
depth at 816 metres. The Company expects to reach planned total depth
of 3,800 metres by the end of 2013. This well is exploring whether
the Baram structure is a separate structure from Kurdamir or a
potential extension of the oil leg discovered in the Oligocene
reservoir of the Kurdamir structure onto the northern portion of the
Garmian Block. If the extension is confirmed, the Company believes
that this could be the highest impact well of the 2013 drilling
program, with the potential to add substantial contingent resources
in both the Garmian Block and in the Kurdamir Block. In this case,
the interim results of Kurdamir-3 testing increase the risk
associated with the undiscovered Prospective Resource assessment for
the Baram-1 well. Alternatively, the Baram structure may be separated
from the Kurdamir structure by a fault, in which case the Kurdamir-3
well results have no material impact on the chance of success of
Baram-1. 
CONFERENCE CALL 
WesternZagros will host a conference call on Thursday August 22, 2013
to discuss the Kurdamir-3 testing results to date. The investment
community is invited to participate in the conference call, which
will begin at 7:00 A.M. Mountain Standard Time (9:00 AM Eastern
Standard Time). You may participate in the call by telephone at
416-340-8410 or toll free at 1-866-225-2055.  
A replay of the conference call will be available on the Company
website, www.westernzagros.com, following the call. Also, a replay
may be accessed by telephone at 905-694-9451 / 800-408-3053. 
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". 
This news release contains certain forward-looking information
relating, but not limited, to future drilling and appraisal plans,
and the timing associated therewith. Forward-looking information
typically contains statements with words such as "anticipate",
"plan", "estimate", "expect", "potential", "could", or similar words
suggesting future outcomes. The Company cautions readers not to place
undue reliance on forward-looking information as by its nature, it is
based on current expectations regarding future events that involve a
number of assumptions, inherent risks and uncertainties, which could
cause actual results to differ materially from those anticipated by
WesternZagros. In addition, the forward-looking information is made
as of the date hereof, and the Company assumes no obligation to
update or revise such to reflect new events or circumstances, except
as required by law. 
Forward-looking information is not based on historical facts but
rather on management's current expectations and assumptions
regarding, among other things, timely receipt of all necessary stock
exchange approvals, plans for and results of drilling activity and
testing programs, future capital and other expenditures (including
the amount, nature and sources of funding thereof), continued
political stability, and timely receipt of any necessary government
or regulatory approvals. Although the Company believes the
expectations and assumptions reflected in such forward-looking
information are reasonable, they may prove to be incorrect.
Forward-looking information involves significant known and unknown
risks and uncertainties. A number of factors could cause actual
results to differ materially from those anticipated by WesternZagros
including, but not limited to, risks associated with the oil and gas
industry (e.g. operational risks in exploration; inherent
uncertainties in interpreting geological data; changes in plans with
respect to exploration or capital expenditures; interruptions in
operations together with any associated insurance proceedings; the
uncertainty of estimates and projections in relation to costs and
expenses and health, safety and environmental risks), the risk of
commodity price and foreign exchange rate fluctuations, the
uncertainty associated with negotiating with foreign governments and
risk associated with international activity. For further information
on WesternZagros and the risks associated with its business, please
see the Company's Annual Information Form dated March 22, 2013
("AIF") which is available on SEDAR at www.sedar.com. 
In addition, statements relating to "contingent resources" contained
herein are deemed to be forward-looking statements, as they reference
a potential discovery of contingent resources and if discovered,
there is an implied assessment, based on certain estimates and
assumptions, that the resources described can be economically
produced in the future. Terms related to resource classifications
referred to herein are based on the definitions and guidelines in the
Canadian Oil and Gas Evaluation Handbook which are as follows.
"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). The potential contingent resources referred to herein have
not yet been discovered and have not been risked for the chance of
development. There is no certainty that any portion of the contingent
resources will be discovered. If discovered, there is no certainty
that it will be commercially viable to produce any portion of the
contingent resources. The contingent resources estimates presented
are gross volumes for the indicated reservoirs, without any
adjustment for the Company's working interest or encumbrances. A
barrel of oil equivalent (BOE) is determined by converting a volume
of natural gas to barrels using the ratio of 6 million cubic feet
(Mcf) to one barrel. BOEs may be misleading, particularly if used in
isolation. A BOE conversion ratio of 6 Mcf:1 BOE is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
oil as compared to natural gas is significantly different from the
energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may
be misleading as an indication of value. The Company's Statement of
Oil and Gas Information contained in the AIF contains additional
detail with respect to the Company's resource assessments and
includes the significant risks and uncertainties associated with the
estimates and the recovery and development of the resources, and, in
respect of contingent resources, the specific contingencies which
prevent the classification of the resources as reserves. 
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE 
WESTERNZAGROS RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50(R) COMPANY
IN 2012 AND 2013. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS
USED UNDER LICENSE.
Contacts:
WesternZagros Resources Ltd.
Greg Stevenson
Chief Financial Officer
(403) 693-7007 
WesternZagros Resources Ltd.
Tony Kraljic
VP Business Development
(403) 693-7011 
WesternZagros Resources Ltd.
Lisa Harriman
Manager of Investor Relations
(403) 693-7017
investorrelations@westernzagros.com
www.westernzagros.com 
Smithfield Group
John Kiely, jkiely@smithfieldgroup.com
James McFarlane, Jmcfarlane@smithfieldgroup.com
Brett Jacobs, bjacobs@smithfieldgroup.com
+44 (0) 20 7360 4900