WesternZagros Resources One2One Presentation - September 2011

www.westernzagros.com 

Corporate Presentation 

September 2011

Caution to the Reader 

This presentation contains forward-looking statements with respect to WesternZagros, including but not limited to operational information, future exploration and testing plans and estimated 

costs associated therewith, working capital, production and resources. Forward-looking information typically contains statements with words such as “anticipate”, “estimate”, “potential”, 

“could”, or similar words suggesting future outcomes. WesternZagros cautions readers and prospective investors in the Company’s securities to not 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. Readers are also cautioned that disclosed test rates and potential production rates may not be indicative of ultimate production levels. 

In addition, the forward looking information is made as of the date hereof, and WesternZagros assumes no obligation to update or revise such to reflect new events or circumstances, except as 

required by law. 

Forward looking information is based on management's current expectations and assumptions regarding, among other things, plans for and results of drilling and testing activity, future capital 

and other expenditures (including the amount, nature and sources of funding thereof), future economic conditions, insurance recoveries, future currency and exchange rates, continued political 

stability, continued participation with the Company’s co-venturers, and the Company's continued ability to obtain qualified staff and equipment in a timely and cost efficient manner. In 

addition, budgets are based upon WesternZagros' current exploration plans and anticipated costs both of which are subject to change based on, among other things, the actual results of drilling 

activity, unexpected delays and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, 

they may prove to be incorrect. 

WesternZagros’ operations are subject to all the risks normally incident to the exploration, development and operation of crude oil and natural gas properties and the drilling of crude oil and 

natural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, potential environmental damage, blow-outs, fires and spills, all of which could 

result in personal injuries, loss of life and damage to property of WesternZagros and others; environmental risks; delays or changes in plans with respect to exploration or development projects 

or capital expenditures; the ability to attract and retain key personnel; the risk of commodity price and foreign exchange rate fluctuations. 

All of WesternZagros’ assets are located in Kurdistan. As such, WesternZagros is subject to political, economic, and other uncertainties, including, but not limited to, the uncertainty of 

negotiating with foreign governments, expropriation of property without fair compensation, adverse determinations or rulings by governmental authorities, changes in energy policies or the 

personnel administering them, nationalization, currency fluctuations and devaluations, disputes between various levels of authorities, arbitrating and enforcing claims against entities that may 

claim sovereignty, authorities claiming jurisdiction, potential implementation of exchange controls, royalty and government take increases and other risks arising out of foreign governmental 

sovereignty over the areas in which WesternZagros’ operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and insurrections. WesternZagros’ 

operations may be adversely affected by changes in government policies and legislation or social instability and other factors which are not within the control of WesternZagros including, among 

other things, adverse legislation in Iraq and/or the Kurdistan Region, a change in crude oil or natural gas pricing policy, renegotiation or nullification of existing concessions and contracts, taxation 

policies, economic sanctions, the imposition of specific drilling obligations and the development and abandonment of fields. 

The ability of WesternZagros to successfully carry out its business plan is primarily dependent on the continued support of its shareholders, the discovery of economically recoverable reserves, 

its co-venturers’ continued participation in the exploration activities under the PSC, and the ability of the Corporation to obtain financing to develop reserves. WesternZagros’ cash balance may 

not be sufficient to fund its ongoing activities at all times and carry the KRG’s 20 per cent interest under the PSC. From time to time, WesternZagros may require additional financing in order to 

carry out its oil and gas acquisition, exploration and development activities. In addition, any change in the co-venturers’ participation could increase the Company’s capital requirements. Failure 

to obtain such financing on a timely basis could cause WesternZagros to forfeit its interest in certain properties, miss certain acquisition opportunities and reduce or terminate its operations. It is 

possible that future global economic events and conditions may result in further volatility in the financial markets which, in turn, could negatively impact WesternZagros’ ability to access equity 

or debt markets in the future. 

Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors should not place undue reliance on these forward-looking statements. For a full 

discussion of the risk factors, please refer to the Annual Information Form and fourth quarter, 2010 MD&A on SEDAR at www.sedar.com or on the Company’s web site. Additional information 

relating to WesternZagros is also available on SEDAR at www.sedar.com, including the Company’s material change reports dated December 16, 2010, January 17, 2011, February 18, 2011 , July 19, 

2011, and September 7, 2011 which include the risks and level of uncertainty associated with the Company’s ability to recover resources from the PSC lands. 

2

Exceptional Exploration Success on the Cusp of Production 

Targeting over 1 billion BOEs in the next 10 

months (includes the Sarqala-1 oil 

discovery and the next 2 wells) 

Audited resource assessment numbers 

based on recent well results 

2011 exploration wells will be in 

formations that have already been drilled 

Drilling results support the potential of a 

giant oil field 

WesternZagros’s PSC lands encompass one 

of the largest exploration areas in 

Kurdistan, one of the world’s most exciting 

exploration regions 

Over 3.6 billion BOEs of audited 

prospective resources * 

* Independently audited by Sproule International Limited 

See Slides 38 through 44, inclusive, for data 

Sarqala-1 Oil Discovery, May-June 2011 

3

The Kurdistan Region of Iraq: Hunting Grounds for Giant Fields 

• The Kurdamir and Garmian Blocks, combined, 

form one of the largest (2,120 km 2 /500,000 acre) 

exploration areas in the Kurdistan Region of Iraq 

• The Garmian contract area (1,780 sq km) is 

operated by WesternZagros, with a 40% working 

interest 

• The Kurdamir contract area (340 sq km) is 

operated by Talisman. WesternZagros also has a 

40% working interest 

• The KRG holds a 20% working interest in both 

PSCs 

Assets 

• Over a billion BOEs of prospective resources (audited) to be drilled in the next 10 months (see slides 38 through 

44, inclusive) 

• Liquid hydrocarbons found at both wells drilled to date: 100% success ratio 

• Confirmed oil discovery at Sarqala-1 (Garmian Block) extended well test imminent 

• Confirmed oil discovery and gas and condensate discovery at Kurdamir-1 (Kurdamir Block) – a potentially 

giant field, evidence for over 1,900 metres of gross hydrocarbon interval 

• Multiple prospects and leads in the Garmian Block 

Experienced and Disciplined 

• Experienced management and technical teams 

• Ability to apply knowledge of the wider region and its exploration drilling risks 

• Lessons learned from two challenging wells drilled in the region to-date 

• Cost reduction through planning, experienced execution and risk mitigation 

4

WesternZagros Today 

Symbol (TSX Venture Exchange) 

First Listed 

Basic Shares Outstanding 1 

Diluted Shares Outstanding 2 

Director & Officer Ownership 3 

Market Capitalization 4 

Average Daily Trading Volume (3 month) 

Working Capital 5 

Head Office 

International Office 

1 

Basic shares outstanding at September 9, 2011 

2 

Diluted Shares Outstanding include options granted as at September 9, 2011 

3 

Including share ownership and options granted as at September 9, 2011 

4 

As of September 9, 2011 

5 

June 30, 2011 working capital - see Slide 6 for details 

WZR 

October 22, 2007 

297.1 million 

315.9 million 

8.1% 

$146 million CDN 

0.6 million 

$47 million US 

Calgary, Alberta, Canada 

Sulaymaniyah, 

Kurdistan Region of Iraq 

5

Financial Position (US$ millions) 

Working Capital Position (as at June 30, 2011) 

Cash 50.7 

Non-Cash Working Capital (8.4) 

Insurance Receivable * 4.4 

Working Capital 46.7 

2011 Capital and Operating Budget (amounts to be spent July 1 – Dec 31) 

Drilling and Related Operations ** 55.0 

Extended Well Testing (only until Sept. 30, 2011) 4.0 

Field Office 4.0 

G&A and Business Development 5.0 

2011 Capital and Operating Budget 68.0 

• Subsequent to June 30, 2011, WesternZagros received the remaining $4.4 million of insurance proceeds to conclude the claim. 

** Includes the requirement for the Corporation to fully fund the Sarqala-1 re-entry and Mil Qasim-1 well and to fund its share of the costs of 

Kurdamir-2 well. Although WesternZagros is fully funding the Sarqala-1 re-entry and the Mil Qasim-1 well, 40% of these costs (approximately 

$25 to $30 million) will be refunded by the third party participant when this interest is assigned by the KRG. 

6

The WesternZagros Story: Steady Progress 

One of the first four operators in the Kurdistan Region: 

• Large hand-picked exploration block 

Over 1,500 kilometres of high quality 

2-D seismic acquired 

• Identified multiple prospects and leads 

• Identified and mapped Oligocene reservoir fairway 

Drilled Sarqala-1 (Garmian Block) to Eocene 

• Significant oil shows in Upper Fars, Jeribe and 

Oligocene formations 

• Challenging well: gained geological insights 

and operational learnings 

Drilled Kurdamir-1 (Kurdamir Block) to Cretaceous 

• Discovered oil in the world class Oligocene reservoir 

• Discovered a large gas cap with high 

condensate yield 

• Numerous deeper oil and gas shows 

Updated resource assessment 

• Sproule audit of prospective resources supports 

over 1.75 billion BOEs incl. 1 billion barrels of oil 

• Assessing additional prospects 

Drilled Sarqala-1 Sidetrack (Garmian Block) to Jeribe 

• Discovered oil in the Jeribe Formation 


• Sproule audit of prospective resources supports over 3.5 

billion BOEs incl. 2 billion barrels of oil. 

• Assessing additional prospects 

PSC Amendments 

• Concluded PSC amendments with the KRG and Talisman to 

split the Original PSC into the Kurdamir PSC and the 

Garmian PSC, with WZ retaining a 40% working interest in 

both 

Spudded Mil Qasim-1 Well 

• Spudded the Mil Qasim-1 well on August 29, 2011 


• Sproule audit adds first contingent resources of 24 million 

barrels of oil at Sarqala. Total PSC Lands prospective 

resources increases to over 3.6 BOEs including 2.9 billion 

barrels of oil. 

7

Three Wells to Target over 1 Billion BOEs of Prospective Resources * 

$20 - 25 million 

gross cost ** 

Sarqala-1 

Re-Entry Oil discovery 

$30 - 35 million 

gross cost 

Extended well test – leading to full production 

Mil Qasim-1 

Spud August 29, 2011 

$60 -65 million gross cost 

Kurdamir-2 

Estimated Q4:2011 spud 

* See Slide 38 through 44 inclusive, for detail on resource estimates 

** Includes the costs of casing repair operations, estimated at approximately $10 million, with WesternZagros funding the subsequent sidetracking and 

testing operations 100 per cent and expects the gross costs associated with these operations to be in the range of $10 to 15 million. 

8

Near Term Potential Value Creation: 2011-2012 

Gross Unrisked Prospective Resources (Audited) * 

May/June 2011 

Oil Discovery! 

9,444 bopd 

40 o API light oil 

August 29, 2011 

Spudded Mil 

Qasim-1 well 

Size of the prize is over 1 billion BOEs of prospective resources 

* See slides 38 through 44, inclusive, for data 

9

WesternZagros Kurdamir and Garmian Blocks Located for Success 

• Tremendous potential of the region long 

recognized by industry 

• WesternZagros in early: hand-picked its 

exploration acreage 

• Our PSC lands contain a large number of 

prospects and leads with multiple 

reservoirs: light oil prone 

• Kurdamir and Garmian Blocks: Size of the 

prize is over 3.6 billion BOEs of 

prospective resources* 

• Discoveries at both Kurdamir-1 and 

Sarqala-1 wells 

• Proven light oil – desirable to enhance 

export blend 

• 69% of Iraq’s reserves are 27 degrees 

API or heavier** 

• Located south of the mountain front 

• Good preservation of proven world class 

reservoirs 

• In the proven Oligocene Fairway 

• On trend with the super giant Kirkuk 

oilfield 

• Proximity to infrastructure 

* Independently audited by Sproule International Limited 

** Source: WesternZagros confidential files 

See Slides 38 through 44 inclusive, for data 

10

The Kurdistan Region of Iraq Current Export Production 

Current Export Volumes* 

Taq Taq 60,000 bopd (trucked) 

Tawke 72,000 bopd 

Khurmala 35,000 bpod 

Kor Mor 14,000 bopd (trucked) 

Shaikan 5,000 bpod (trucked) 

Current Exports 186,000 bopd 

(mid 2011) 

Planned Extended Well Testing/Early Production System** 

WesternZagros 

Sarqala 5,000 bopd (trucked) 

Atrush 5,000 bopd 

Barda Rash 5,000 bopd 

Sarta 5,000 bopd 

Swara Tika 5,000 bopd 

Planned Exports 200,000 bopd 

(end 2011) 

* Iraq Oil Report June 2011 

** WesternZagros estimate 

11

Kurdamir and Garmian Blocks – Oil Prone 

Kurdamir -1 Well Discovery 

Analysis of actual oils and condensate 

recovered confirms Aaliji source rock 

(Analysis conducted by Weatherford Labs) 

Aaliji Source Rock Maturity Map 

Burial history modeling confirms Aaliji source is 

currently generating oil 

(Map modified from proprietary Fugro Robertson Study, 2010) 

Hydrocarbon samples from Sarqala and Kurdamir wells and surface seeps 

12

Multiple Prospects: Oil & Gas 

Garmian Block 

Drilling Plans 

Mil Qasim-1 

(Third commitment well) 

Kurdamir Block 

Drilling Plans 

Kurdamir-2 well 

Significant well 

in adjacent Block 

Topkhana-1 well 

(Talisman - Block 39) 

- Drilling commenced in Q1 2011 

- WesternZagros has no ownership 

interest 

13

Hydrocarbon Habitat of Surrounding Discoveries 

Oil Discovery 

1900 metres 

gross 

hydrocarbon 

interval 

1200 metres 

gross 

hydrocarbon 

interval 

1800 metres 

gross 

hydrocarbon 

interval 

Most of the fields in the chart that show shallow discoveries may have remaining undiscovered potential if drilled deeper. 

Sources include: 2006 Petroleum Geological Analysis Ltd. (PGA) Report and news releases. 

14

Production Sharing Contract (PSC): Fair and Balanced Terms 

Royalty Oil 

10% of total crude oil 

Oil Case 

When the R-Factor 

(revenue/cost) is below 

one, the Contractor Group 

is entitled to 35% of the 

Profit Oil. The Contractor 

Group’s percentage is then 

reduced on a linear scale 

to a minimum of 16% as 

the ratio is 2 or greater. 

Gas Case 

When the R-Factor is 

below one, the Contractor 

Group is entitled to 40% of 

the Profit Gas. The 

Contractor Group’s 

percentage is then 

reduced on a linear scale 

to a minimum of 20% as 

the ratio is 2.75 or greater. 

Cost recovery gas: up to 

55% of net available gas. 

15

Competitive PSC Terms 

40% 

35% 

Effective Range of Contractor Profit Oil % Allocations 

$200mm upon Entry 

$280mm due June 30 '12 

30% 

25% 

20% 



15% 

10% 

5% 

Pre-Iraqi Constitution PSC 

1. Respol and Norbet maximum profit oil rate is 32% and 23.8% until such time the R-Factor is greater than 1. 

Source: The profit oil terms have been assessed from enacted copies of the production sharing agreements published by the Kurdistan 

Regional Government on their website www.KRG.org as of September 20th, 2011 

16

Political Environment Progressing 

October 2005 

Iraqi constitution adopted 

February 2007 

Draft Federal Petroleum Law 

June 2007 

Agreement on initial revenue sharing - 17% 

of net oil revenues from all regions in Iraq 

go to Kurdistan 

August 2007 

KRG Petroleum Law approved 

March 2010 

Iraq holds its first fully-supported 

democratic election 

February 2011 

Iraq Prime Minister announces Kurdistan PSCs will be respected 

Oil exports from Kurdistan resume 

April 2011 

Kurdistan Prime Minister presents first KRG oil export statement 

to Iraq federal finance ministry – over 5 million barrels delivered 

to state marketing agency since February 2011 

May 2011 

Federal Ministry of Finance confirms release of the first oil 

export payment to KRG contractors (approximately 50% of net 

revenues) 

June 2011 

DNO and TTOPCO confirm receipt of first oil payments 

December 2010 

Iraq President, Prime Minister and cabinet 

appointed 

September 2011 

DNO confirms receipt of second oil payment 

17

Near Term Opportunities of the Garmian Block 

Sarqala 

• Oil discovery in the 

Jeribe Formation 

• Flowed light, 40° API oil 

at rates of over 9,000 

bopd 

• Preparing for extended 

well testing program 

Mil Qasim 

• August 29, 2011 spud 

date 

• Upper Fars reservoir 

targeted that had oil 

shows while drilling 

Sarqala-1 

Sarqala-1 Well Oil Discovery 

18

Oil Discovery At Sarqala-1 Followed By Opportunity at Mil Qasim-1 

(Garmian Block) 

Sarqala -1 Well 

• Sidetrack completed through Jeribe Formation 

• The Jeribe Formation flowed light, 40° API oil at rates 

of over 9,000 bopd (no stimulation, no water) 

• Major upside of oil (prospective resources) in the 

Jeribe reservoir is:P 90 - P 50 -P 10 MMbbls : 9 – 66- 248 

Mil Qasim-1 Well 

• Younger and shallower structure than Sarqala and the 

geology and drilling is expected to be much simpler 

• Crest lies approximately three kilometres from 

Sarqala-1 

• Spud date of Mil 

Qasim-1 was August 

29, 2011 

• Anticipate oil bearing 

sandstones in Upper 

Fars reservoir 

Sarqla-1 Well 

Oil Discovery 

Mil Qasim-1 

(Third Commitment Well) 19

Mil Qasim-1 (Garmian Block): Currently Drilling 

Target Upper Fars reservoir, where high 

pressure 35 - 42 degree API oil was 

encountered at Sarqala-1 

Proposed total depth of 2,400 metres 

Horizon Legend 

Upper Fars 

Lower Fars Evaporite 

Base Fars Detachment 

Lower Fars Transition Beds 

Jeribe 

Dhiban 

Euphrates 

Oligocene 

Aaliji 

Shiranish 

Composite Seismic Section (SW to NE) of Mil Qasim-1 and Sarqala-1 locations 

20

Near Term Opportunities of Kurdamir Block 

Kurdamir-2 well to be 

drilled by June 30, 2012 

Drill site location under 

construction 

Sourcing of long-lead items 

underway 

Spud planned for Q4 2011 

Kurdamir-1 Oil Discovery – November 2010 

21

Kurdamir Discovery (Kurdamir Block) 

• Drilled through Oligocene, 

Eocene, Cretaceous 

(Shiranish and Kometan) 

reservoirs 

• Penetrated a gross interval 

of approximately 1,900 

metres of hydrocarbon 

shows 

• Shut well in at 4,077 

metres 

• Drilled sidetrack to 3,214 

metres 

• Tested Oligocene, light oil 

discovered 

• Discovered large Oligocene 

gas cap 

22

Success at Kurdamir: Over 1,900 Metres of Gross Hydrocarbon Interval 

Confirmed excellent Oligocene reservoir 

Confirmed oil column in the Oligocene reservoir, 

testing light oil with major upside 

Prospective Resources (MMbbls) 

P 90 P 50 P 10 

Oil 85 260 560 

Discovered gas and condensate 

• Drill stem tests flowed 27.5 MMcf/d of gas and 

1,172 bbls/d of 61: API natural gas liquids 

• High predicted rates of over 50 MMcf/day of 

gas and 2,240 bbls/d of condensate 

• Contingent Resources (Gas in BCF and 

Condensate in MMbbls) 

P 90 P 50 P 10 

Gas 505 850 1420 

Condensate 22 33 48 

Oil shows in Eocene and 

Cretaceous reservoirs. 

Oil interval confirmed by 

Weatherford geochemical 

analyses (Aug 2011) 

• Major upside in deeper 

untested zones 

Prospective Resources (oil) 

P 90 P 50 P 10 MMbbls 

18 86 273 Eocene 

59 152 340 Cretaceous 

Well Testing at the Kurdamir-1 – November 2010 

23

Kurdamir-Topkhana Structure: The Potential Oligocene Reward 

Oil is confirmed in the Oligocene 

reservoir 

• Analysis of condensate discovered on crest 

of Kurdamir-Topkhana Structure indicates an 

oil source 

• Gas cap on crest of Kurdamir-Topkhana 

Structure is similar to existing giant oil fields 

in Iraq and Iran 

The flanks of the structure appear 

most promising: to be tested by 

Kurdamir-2 

• Gas caps are frequently associated with 

downdip oil columns on the flanks of the 

structure or deeper oil columns in the 

Cretaceous 

• Producing oil fields with similar structures: 

Bai Hassan, Kirkuk and Khabbaz 

24

Kurdamir-Topkhana Structure 

Topkhana well 

results in 2011 to 

confirm whether 

the Kurdamir 

Structure extends 

off the Block 

WesternZagros 

has no ownership 

interest in this 

well 

Kurdamir-2 will be the important test of the oil potential 

in the Oligocene, Eocene and the Cretaceous of the 

structure 

Potentially one of the world’s biggest oil fields 

Mean prospective resources: 585 MMbbls on Kurdamir 

Block alone 

25

Kurdamir-Topkhana Structure: The Potential Oligocene Reward 

Depth map of Oligocene Formation 

• Prospective resources 

(audited) have more than 

doubled from our 

November 26, 2009 

assessment 

• Cased hole testing 

indicated substantially 

larger structure as no 

formation water was found 

• Potentially one of the 

world’s biggest oil fields 

• Topkhana well results in 

2011 to confirm whether 

the Kurdamir Structure 

extends off the Block 

• WesternZagros has no 

ownership interest in this 

well 

26

Kurdamir-Topkhana Structure: Additional Potential Reward 

Potential similar to 

Oligocene in the 

deeper zones: 

Eocene and 

Cretaceous (Shiranish 

and Kometan) 

Depth map of Cretaceous Formations 

27

Kurdamir (Kurdamir Block): Planning the Next Well 


Ground Elevation 

Upper Fars 




Oligocene 

Aaliji 

Shiranish 

Drill Kurdamir-2 to test the 

Oligocene, Eocene and 

Cretaceous formations 

Composite Seismic Section (SW to NE) of Kurdamir-1 and Kurdamir-2 locations 

28

Multiple Transportation and Market Options 

Well-established oil export routes: 

• Mediterranean and Persian Gulf 

Potential pipelines: 

• Kirkuk-Ceyhan System 

• Kirkuk-Basra 

• Baniyas-Syria System 

• Proposed system within Kurdistan 

WesternZagros early production, from Sarqala-1 well, 

expected to be supplied to Kirkuk-Ceyhan pipeline 

Two oil markets 

• Exported sales results in 50% world price 

• Domestic sales result in $60-75/bbl 

Developing Kurdistan gas infrastructure 

• Gas pipeline: Kor Mor to Erbil 

• 2 gas powered electricity plants 

29

Corporate Social Responsibility 

Long-term benefits for the local community: 

health, water, education and recreation 

Strong focus on health, safety and security

Making a Difference Where We Operate 

We: 

• Work with key stakeholders in our 

area of operations 

• Aim to establish sustainable longterm 

benefits for the local 

community 

• Target the health, water, education 

and recreation sectors 

• Believe in creating a positive 

impact in the local community and 

improving quality of life 

• Consult with communities and 

liaise with other operators, NGOs 

and KRG institutions to determine 

our CSR activities 

• Hire local personnel wherever 

possible 

Corporate Social Responsibility Investment Priorities 

31

WesternZagros: Next Steps 

‣ Construct surface facilities to start producing oil during extended well 

testing at the Sarqala-1 well 

‣ Drill exploration commitment well at Mil Qasim-1, incorporating results 

from Sarqala-1 discovery 

‣ Construct Kurdamir-2 well site to further explore Kurdamir-Topkhana 

Structure 

• Evaluate Tertiary formation flanks 

• Re-drill Eocene and Shiranish formations, applying results from Kurdamir-1 and 

Talisman’s Topkhana-1 wells 

‣ Evaluate Kurdamir-2 and Topkhana-1 results prior to further 

exploration drilling 

32

WesternZagros: On the Cusp of a Major Oil Discovery 

‣ The Kurdamir and Garmian Blocks, combined, form one of the largest 

exploration areas in Kurdistan, one of the world’s most exciting exploration 

regions 

‣ Current team is highly experienced in exploration in challenging regimes 

‣ Conservative approach to financing, resource reporting and drilling 

• Release only independently audited contingent and 

prospective resource numbers 

• Maintain financial flexibility 

• Highly attentive to safety 

• Recognize importance of on-the-ground relationships 

‣ Drilling results support the potential 

of a giant oil field 

‣ Targeting over 1 billion BOEs in the 

next 10 months (includes the 

Sarqala-1 oil discovery and the next 2 wells) 

Gross Unrisked Prospective Resources (Audited) 

May/June 

2011 

Oil Discovery! 

9,444 bopd 

40 o API light oil 

August 29, 


Spudded Mil 

Qasim-1 well 

33

Additional Information 

WesternZagros CEO Simon Hatfield and Operations Staff next to Sarqala-1 oil discovery well head 

34

Experienced Management & Strong Technical Team 

Simon Hatfield, CEO 

Proven track record of success with over 30 years of international and domestic oil and gas experience in technical, 

managerial and executive positions with Western Oil Sands, Imperial Oil, Exxon Production Research Co., PetroCanada, Chauvco Resources and 

Talisman. Extensive experience in Iraq since 1995. 

Greg Stevenson, CFO 

Previously Controller of Western Oil Sands. Chartered Accountant with over 13 years of experience working with a major accounting firm as well 

as with large public companies in the oil and gas industry. Responsible for leading the financial and accounting team. 

Dr. George Pinckney, Vice President, Exploration and Reservoir Development 

Majority of 35 year career spent with Mobil Oil and ExxonMobil in locations throughout Canada, USA and Southeast Asia, demonstrating 

extensive international experience. Responsible for all geotechnical work in Iraq . 

Ian McIntosh, Vice President, Kurdistan Business Unit 

Over 30 years of international oil and gas experience in development and production engineering, in-country management and business growth 

in challenging environments. Previous executive and managerial positions with Petro-Canada in Libya, Algeria and Tunisia, Adams Pearson 

Associates, and Ranger Oil. 

Lee Westermark, General Manager, Operations 

Over 35 years of domestic and international experience in drilling management, engineering and operations and production operations 

management with Imperial Oil Limited and ExxonMobil. Executive and managerial positions in Canada . Houston, London and the Middle East. 

Dave Reeve, General Manager, Petroleum Engineering 

Over 30 years experience in consulting and staff position in production and reservoir engineering and operations of projects in China, Iran, 

Australia, Indonesia and domestic. 

Tony Kraljic, Senior Manager, Joint Ventures and Corporate Planning 

Over 14 years experience as VP Finance, CEDA Int. Corp., Manager of Finance & Accounting and Manager of Taxation at Marathon/Western Oil 

Sands, Senior Tax Planner and Financial Analyst at Shell, and Tax Manager at Arthur Andersen LLP. 

35

Board of Directors – Disciplined, Independent, Experienced 

David Boone 

• Broad Canadian and international energy experience in the upstream industry with positions including President, Offshore and 

International Operations for EnCana Corporation; Executive Vice-President and Chief Operating Officer of PanCanadian Energy 

• President & CEO of Barrick Energy Inc. 

• Holds a Civil Engineering degree from Queen's University 

Fred Dyment (Chairman) 

• Over 30 years of expertise includes positions as President and CEO for Maxx Petroleum and President and CEO of Ranger Oil 

Limited, in addition to serving as Governor of the Canadian Association of Petroleum Producers (CAPP) from 1995 to 1997 

• Serves on the Board of Directors of Tesco Corporation, ARC Energy Trust and TransGlobe Energy Corporation 

• Holds a Chartered Accountant designation 

John Frangos 

• Co-founder of Western Oil Sands, served as Western’s Executive Vice President and COO 

• Played key role in negotiations with the Kurdistan Regional Government 

• Prior to forming Western, employed with BHP and predecessor corporations for 28 years and was Vice-President, International 

Business Development for BHP’s Minerals Business Unit 

• Holds a Diploma in Mechanical and Electrical Engineering, an Associate Diploma in Mechanical Engineering and a Masters of 

Business Administration degree 

Simon Hatfield 

• Proven track record of success with over 30 years of international and domestic oil and gas experience in technical, managerial 

and executive positions with Imperial Oil, Exxon Production Research Co., Petro-Canada, Chauvco Resources and Talisman 

• Holds a Bachelor of Science (Honours) degree in Geology with Physics, a Masters of Science degree in Geology and completed the 

Executive Development Program at the University of Calgary 

• Extensive experience in Iraq since 1995 and initiated Kurdistan opportunity and successfully concluded the signing and ratification 

of PSC 

36

Board of Directors – Disciplined, Independent, Experienced 

Jim Houck 

• Proven track record of success with ChevronTexaco Inc., as President of Texaco Development Corporation from 1996 to 2001 and 

President of Worldwide Power and Gasification Inc. from 1998 – 2003, in addition to senior level positions in global gas and 

power, business development, production operations, research and development and strategic planning 

• President and CEO of The Churchill Corporation 

• Previously a Principal of FrontStreet Partners, a U.S-based, privately-held investment firm 

• Holds a Bachelor’s degree in Engineering Science from Trinity University in San Antonio and a Master of Business Administration 

degree from the University of Houston 

Randall Oliphant 

• Executive Chairman and Director of New Gold Inc. Served as President and CEO of Barrick Gold Corporation from 1999 - 2003, 

prior to holding senior financial positions with the firm from 1987- 1999 

• Currently serves on the Advisory Board of Metalmark Capital LLC (formerly Morgan Stanley Capital Partners) and serves on the 

Boards of a number of private companies and not-for-profit organizations 

• Holds a Bachelor of Commerce Degree and is a Chartered Accountant 

William Wallace 

• Over 40 years industry experience including positions as Vice-Chairman, President and COO of Barrett Resources, Regional Vice 

President and Vice President, Exploration with Texaco and Group Vice President of CSX Oil and Gas Company 

• Lived and worked abroad for 16 years. Supervised international operations in Colombia, Ecuador, Venezuela, United Kingdom, 

Ireland, France, New Zealand, Australia and Pakistan 

• Earned a Geology degree from Middlebury College and a M.Sc. in Geology from Stanford University 

37

Kurdamir Block Contingent and Prospective Resources: Kurdamir 

Table 1(a) 

Gross Unrisked 

Contingent 

(1), (2) 

Resources 


Oil, Gas and 

Condensate 

As of Dec 14, 

2010 

Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 

Prospect Reservoir Hydrocarbon P90 P50 P10 Mean 

Kurdamir 

Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf 

Tertiary 

Oligocene Oil 0.7 6.5 60 30 

Solution Gas 1 10 100 50 

Associated Gas (4) 505 850 1420 920 

Condensate 22 33 48 35 

Kurdamir Total Mean MMBOE - Gross Unrisked Contingent Resources 227 

2011 Kurdamir Cretaceous Oil 59 152 340 181 

Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 


Type MMbbl MMbbl MMbbl MMbbl 

Table 1(b) 

Tertiary 

Gross Unrisked Kurdamir Oligocene (5) 

Prospective 

Oil 85 260 560 280 

Resources (3) 

MMBOE (14) 106 328 712 359 


Oil, Gas and Kurdamir 

Tertiary 

Eocene Oil 18 86 273 124 

Condensate 

As of Jan 14, 

MMBOE 28 122 399 181 

Please refer to the Company’s 

material change report dated 

December 16, 2010 and January 

14, 2011 for further disclosure 

and explanation of the 

contingent and prospective 

resources and slides 43 and 44 

for footnotes 1-14 referenced in 

Tables 1a and 1b 

MMBOE 84 233 549 285 

Kurdamir Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 825 

Kurdamir Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 585 

38

Garmian Block Contingent and Prospective Resources: Sarqala 

Table 2(a) 


Contingent 

(1), (2) 

Resources 

Garmian Block 

Oil, Gas and 

Condensate 

As of Sept 7 2011 

Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 


Sarqala Jeribe / 

Upper 

Dhiban 


Oil 9 21 44 24 

MMBOE (9) 31 

Jeriba/Upper Dhiban Total Mean Oil Only - Gross Unrisked Contingent Resources 24 

Jeribe/Upper Dhiban Total Mean MMBOE – Gross Unrisked Contingent Resources 31 

Table 2(b) 


Prospective 


Garmian Block 

Oil, Gas and 

Condensate 

As of Sept 7, 


Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 


Sarqala 

Sarqala 

Structure 

Below 

Lowest 

Known Oil 

Jeribe/Upper 

Dhiban 

Potential 

Extension 

Southwest 

Flank 

Jeribe/Upper 

Dhiban 


Oil 17 49 125 63 

MMBOE (9) 80 

Oil 14 87 304 135 

MMBOE 170 

Jeribe/Upper Dhiban Total Mean Oil Only - Gross Unrisked Prospective Resources 198 

Jeribe/Upper Dhiban Total Mean MMBOE - Gross Unrisked Prospective Resources 250 



February 18, 2011 and 

September 7, 2011 for further 

disclosure and explanation of the 




Table 2 

Table 2(c) 


Prospective 


Garmian Block 

Oil, Gas and 

Condensate 

As of Sept 7, 


Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 


Sarqala Jeribe / 

Upper 

Dhiban 


Oil 31 136 429 198 

MMBOE (9) 250 

Sarqala (10) Oligocene Oil 18 41 87 48 

MMBOE 21 54 117 63 

Sarqala (10) Eocene Oil 4 27 109 44 

MMBOE 16 88 303 130 

Sarqala (10) Cretaceous Oil 0.5 4 14 6 

MMBOE 4 14 44 20 

Jeribe/Upper Dhiban Total Mean Oil Only - Gross Unrisked Prospective Resources 296 

Jeribe/Upper Dhiban Total Mean MMBOE - Gross Unrisked Prospective Resources 463 

39

Garmian Block Prospective Resources: Mil Qasim, Baran and Qulijan 

Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 



Mil Qasim Upper Fars Oil 7 63 265 106 

MMBOE 8 71 303 121 

Mil Qasim Sub Total Mean MMBOE – Gross Unrisked Prospective Resources 121 

Mil Qasim Sub Total Mean Oil Only – Gross Unrisked Prospective Resources 106 

Table 3 


Baran (10,12) Oligocene Oil 8 48 251 105 

2011 (5) 

Prospective 

MMBOE 23 129 618 261 

Resources (3),(10) 

Garmian Block Baran (10,12) Eocene Oil 0.6 4 27 11 

Oil, Gas & 

Condensate 

MMBOE 3 14 77 31 

Mil Qasim, Baran, Baran Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 292 

and Qulijan 

Prospects 

Baran Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 116 

As of Jan 14, Qulijan (10,11) Oligocene Oil 7 45 157 66 

MMBOE 21 100 307 137 

Qulijan (10,11) Eocene Oil 1 9 34 14 



January 17, 2011 and February 

18, 2011 for further disclosure 

and explanation of the 




Table 3 

MMBOE 3 20 72 32 

Qulijan (10,11) Cretaceous Oil 0.4 3 13 6 

MMBOE 2 9 32 15 

Qulijan Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 183 

Qulijan Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 86 

40

Garmian Block Prospective Resources: The Next 5 Prospects and 2 Plays 

Table 4 

Gross 

Unrisked 

Prospective 


Garmian 

Block 

Oil, Gas and 

Condensate 

and 

Bawanoor, 

Tilako, Zardi, 

Segrdan, 

Chwar, Alyan 

and Upper 

Fars 

Prospects 

As of July 19, 


Low 

Estimate (6) 

Best 

Estimate (7) 

High 

Estimate (8) 

Mean 

Estimate (9) 

Prospect / Play Reservoir Hydrocarbon P90 P50 P10 Mean 


Upper Fars 

Fault Trap Play Upper Fars Oil 60 425 1,730 705 

MMBOE (14) 798 

Upper Fars 

Bawanoor 

Saddle Play Upper Fars Oil 16 80 275 120 

MMBOE 282 

Zardi Jeribe Oil 12 34 86 43 

MMBOE 54 

Mio-Oligocene Oil 4 34 130 54 

MMBOE 184 

Eocene Oil 2 18 73 30 

MMBOE 104 

Segrdan Jeribe Oil 7 19 54 27 

MMBOE 34 


MMBOE 182 


MMBOE 69 

Chwar Jeribe Oil 6 19 46 23 

MMBOE 30 


MMBOE 2 


MMBOE 4 

Alyan Mio-Oligocene Oil 1 8 35 14 

MMBOE 27 


MMBOE 4 

Shiranish Oil 0 1 3 1 

MMBOE 4 

Tilako Jeribe Oil 2 6 14 7 

MMBOE 9 


MMBOE 9 


MMBOE 4 

Table 3 Total Mean MMBOE - Gross Unrisked Prospective Resources 1,798 

Table 3 Total Mean Oil Only – Gross Unrisked Prospective Resources 1,099 

Please refer to the Company’s material 

change report dated July 19, 2011 for 

further disclosure and explanation of the 

prospective resources and slides 43 and 44 

for footnotes 1-14 referenced in Table 4 

41

Kurdamir and Garmian Blocks: Contingent and Prospective Resources 

Tables 1(a) 

and 2(a) 

Gross 

Unrisked 

Contingent 


Kurdamir 

and Garmian 

Blocks 

Oil, Gas and 

Condensate 

Tables 1(b), 

2(b), and 4 

Gross 

Unrisked 

Prospective 


Kurdamir 

and Garmian 

Blocks 

Oil, Gas and 

Condensate 


Play / Prospect 

Mean Estimate Oil Only 

MMbbl 

Mean Estimate MMBOE 

MMbbl 

Kurdamir 30 227 

Garmian Block 

Sarqala 24 31 

Total Contingent Mean Estimate 54 258 


Play / Prospect 

Mean Estimate Oil Only 

MMbbl 

Mean Estimate MMBOE 

MMbbl 

Kurdamir 585 825 

Garmian Block 

Upper Fars Fault Trap Play 705 798 

Upper Fars Baanoor 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 585 825 

Sub Total Garmian Block 1,704 2,858 

Total Prospective Mean Estimate 2,289 3,683 

Please refer to the Company’s material 

change reports dated December 16, 

2010, January 17, 2011, February 18, 

2011, July 19, 2011 and September 7, 

2011 for further disclosure and 

explanation of the contingent and 

prospective resources and slides 43 and 

44 for footnotes 1-14 referenced in 

Tables 1 (b), 2(b), 3 and 4. 

42

Kurdamir and Garmian Blocks Prospective and Contingent Resources Footnotes 

Notes to Tables 1, 2, and 3: 

(1) The contingent resources are the gross volumes estimated for the Tertiary Oligocene carbonate reservoirs at Kurdamir-1, 

without any adjustments for working interest or encumbrances. 

(2) 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. The Corporation’s Material Change Report dated 

December 16, 2010, which is available at www.sedar.com, contains additional detail on the specific contingencies which 

prevent the classification of these contingent resources as reserves. 

(3) The prospective resources are the undiscovered potentially recoverable gross volumes estimated for the indicated 

reservoirs, without any adjustments for working interest or encumbrances. 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. In this case, 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. 

(4) The gross unrisked contingent resources for gas reflect reductions for condensate recovery, surface losses, and fuel gas. 

(5) Other than, for Table 1(b), the prospective resources for the Tertiary Oligocene carbonate reservoir at the Kurdamir-1 well 

which are as at December 14, 2010. Other than, for Table 2, the prospective resources for the Upper Fars reservoir at Mil 

Qasim, and the Jeribe reservoir at the Sarqala-1 well which are as at January 14, 2011. 

43

Kurdamir and Garmian Blocks Prospective and Contingent Resources Footnotes 

(6) Low Estimate is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the 

actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at 

least a 90 percent probability (P90) that the quantities actu ally recovered will equal or exceed the low estimate. 

(7) Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely th at 

the actual remaining quantities recovered will be greater of less than th e best estimate. If probabilistic methods are used, 

there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best 

estimate. 

(8) High Estimate is considered to be an optimistic estimate of the quan tity that will actually be recovered. It is unlikely that 

the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be 

at least a 10 percent probability (P10) that the quantities actually reco vered will equal or exceed the high estimate. 

(9) Mean Estimate is the average from the probabilistic assessment. 

(10) The prospective resource estimates for the Qulijan Oligocene, Eocene and Cretaceous, Baran Oligocene and Eocene, 

and Sarqala Oligocene, Eocene a nd Cretaceous prospects are based upon interpretation of WesternZagros’ recent 

vintage 2D seismic database within Block K44 (1483 kilometres, 42 lines)and well data from WesternZagros’ Kuramir - 1 

and Sarqala - 1 wells (prior to the re - entry) . 

(11) The Qulijan Oligocene, Eocene and Cret aceous prospective resource assessment is based on eight 2D seismic lines and 

offsetting Kurdamir - 1 well information. 

(12) The Baran Oligocene and Eocene prospective resource assessment is based on nine 2D seismic lines and nearby 

Kurdamir - 1 well information. 

(13) The Sarqala Oligocene, Eocene and Cretaceous prospective resource assessment is based on seven 2D seismic and 

information from the Sarqala - 1 well drilled in 2008 - 2009. 

(14) 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. 

44

The Region’s Oil & Gas Fields 

45

The Region’s Operators 

Over 40 international oil 

companies with PSCs 

in Kurdistan 

Source: KRG and WesternZagros 

46

Kurdistan Recent PSC Activity 

Taza 

Qadir 

Karam 

Baranan 

New PSCs: 

• Dinarta 

Hess 64 % (op), Petroceltic 16%, KRG 20% 

• Shakrok 

Hess 64 % (op), Petroceltic 16%, KRG 20% 

• Qala Dze 

Repsol % N/A (op), KRG 20% 

• Piramigrun 

Repsol % N/A (op), KRG 20% 

Other PSC Activity: 

• Ain Sifni 

Afren Acquisition 

Hunt 60% (op), Afren 20%, KRG 20% 

• Barda Rash 

Afren Acquisition 

Afren 60% (op), Komet 20%, KRG 20% 

• Taza 

Converted from seismic option to PSC 

Oilsearch 60% (op), ShaMaran 20%, KRG 20% 

• Qadir Karam 

Converted from seismic option to PSC 

Talisman 60% (op), TPI unassigned, KRG 20% 

• Baranan 

TPI award 

Talisman 60% (op), Murphy 20%, KRG 20% 

• Kalar-Bawanoor 

• Block split 

• Kurdamir 

• Talisman 40% (op), WZ 40%, KRG 20% 

• Garmian 

• WZ 40% (op), TPI unassigned, KRG 20% 

47

Qulijan-1 (Garmian Block): Step Out Exploration Near Kurdamir 

• New mapping indicates large 

prospect 

• Follow up potential to 

Kurdamir-2 and Topkhana 

• Well site is prepared and drill 

ready 

Composite Seismic Section (SW to NE) of Kurdamir-1 and Qulijan-1 locations 


Ground Elevation 

Upper Fars 




Oligocene 

Aaliji 

Shiranish 

48

Bai Hassan: Analogue for Kurdamir-Topkhana Structure 

Bai Hassan 

• Bai Hassan: a proven oil 

field, has a similar 

structure to Kurdamir- 

Topkhana 

• 2.2 billion barrels of oil 

discovered in 1953 

49

Growing Interest in Iraq 

• Kurdistan under-explored relative to the rest of Iraq 

• Quality of services increasing 

• Security situation has improved 

• Oil fields are producing and 

exporting oil – Tawke and Taq Taq 

• Confirmation in May 2011 of oil export payments to 

KRG contractors (approximately 50% of net revenues) 

• Iraq to invite bids for 12 blocks in 2012 (7 for gas and 5 

for oil) 

50

www.westernzagros.com 

Head Office 

600, 440 – 2nd Avenue S.W. 

Calgary, Alberta, Canada 

T2P 5E9 

Tel: 1-403-693-7017 

Fax: 1-403-233-0174 

email : investorrelations@westernzagros.com 

Sarqala-1 Oil Discovery – May/June 2011 

51

WesternZagros Resources One2One Presentation - September 2011

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