WesternZagros secures funds for development of two Iraqi blocks

(MENAFN- ProactiveInvestors) WesternZagros Resources (CVE:WZR) says it has closed its rights offering which together with the equity backstop arrangement provided by its largest shareholder generated C$200 million in total proceeds. 

The new funds will be used for the development of the company's Kurdamir and Garmian blocks in Iraq. The company issued a total of 32.9 million common shares at a price of 65 Canadian cents each under the rights offering including 7.9 million to Crest Energy International. Crest which now holds 19.9 percent of WesternZagros also purchased around 274.7 million non-voting Class A preferred shares on a private placement basis.

"We are very pleased to have successfully completed the rights offering and related equity backstop arrangement with Crest which secures the financing necessary to bring our significant oil and gas discoveries into production and generate cash flow" said chief executive officer Simon Hatfield.

"With our financing secure we look forward to progressing the development of these assets with our co-venturers and the Kurdistan Regional Government."

Earlier this month the oil and gas developer said the Kurdistan region government requested changes to the development plan for its Kurdamir block that was submitted in August. The junior explorer together with partner Talisman Energy (TSE:TLM) said they are planning additional consultation with the Ministry of Natural resources of Kurdistan to refine the development plan. 

Future drilling plans will align with the redefined development plan once approved by the local government.

The natural resources company holds a 40 percent working interest in two production sharing contracts in the Kurdamir region of Iraq known as Garmian and Kurdamir with the Kurdistan regional government. 

At the Kurdamir block Talisman Energy which is also the operator holds a 40 percent working interest while the Kurdistan regional government holds the remaining 20 percent.

Meanwhile WesternZagros filed a development plan for its Garmian block in June after declaring commercial status last December. The plan includes three phases targeting oil production of 25000 to 35000 barrels per day in 2015.

The company recently said it is making "good progress" in discussions with the Kurdistan regional government on the Garmian development plan.

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