The 300 Club

Production at WesternZagros’s (CVE:WZR) Sarqala-1 well in the Garmian Block during the second quarter averaged 5,427 barrels of oil per day ("bbl/d) as the company continues to supply its two domestic customers under pre-paid contracts with the Kurdish Regional Government (KRG).

Meanwhile, WesternZagros is including the KRG’s final comment into its Sarqala Field Development Plan (FDP). Its approval is expected when the KRG has completed its contractual negotiations to build a natural gas plant, which will use natural gas from the Sarqala field.

The company’s plan to suspend the Hasira-1 is on schedule and should reach completion in the third quarter. Although the FDP will delineate and develop the resources within the Jeribe reservoir, said Western Zagros in a statement, “the Company and its partner, Gazprom Neft, are actively discussing the most effective next steps and the timing to assess the potential of Hasira-1's Mio-Oligocene oil discovery.”

WesternZagros also said that it expects to spud the Sarqala-2 well in the fourth quarter, once the Hasira-1 suspension operations are completed and the Sarqala FDP is approved by the KRG.

At the Kurdamir Block, Western Zagros is working closely with Repsol, which acquired Talisman Energy last May. WesternZagros is the operator and holds a 40% interest in the Garmian Contract Area that covers 1,780 square kilometers; and holds a 40% interest in the Kurdamir Contract Area that covers 340 square kilometers and had Talisman Energy as operator.

The Kurdistan Regional Government retains a 20% working interest in both the Garmian and Kurdamir Blocks and discussions are ongoing between WesternZagros, Repsol and the KRG regarding the development plan to advance the Kurdamir discovery into production.

At the Kurdamir discovery, the company has predicted unrisked contingent Resources of 541 million bbl and prospective resources of 1.3 billion barrels of oil.

The KRG is keen to progress this oil and gas project although it is anticipated to take until the first quarter of 2016 for the co-venture partners to finalize the development plan.

Separately, in accordance with an agreement between WesternZagros and Crest Energy, which bought 51 million shares of WesternZagros in a private placement generating C$63.75 million in March 2013, Crest is discussing the appointment of two directors to the WesternZagros Board.

WesternZagros continues to be judicious in cutting costs wherever it can to confront the continued low oil prices. As it prepares to release its second quarter results on August 13, the company said that it has found savings by optimizing capital investment, renegotiating contracts with service companies and cutting discretionary expenditures.

WesternZagros is a Canadian oil and gas explorer that is successfully exploring and developing crude oil and natural gas resources in the Kurdistan region of Iraq.

Kurdistan is sitting on 55 billion barrels of oil; a quarter of Iraqi reserves and produces 200,000 barrels a day