WesternZagros inks strategic investment deal with Crest Energy worth $57 mln

WesternZagros Resources (CVE:WZR) struck a strategic investment deal with Crest Energy that would see the oil and gas company raise $57 million in a non-brokered financing.

The private placement, which is expected to close on August 10, will see Crest own just under 10 per cent of WesternZagros’ outstanding shares.

The company plans to sell 40.7 million shares priced at $1.40 each. This is a 10 per cent premium to WesternZagros’ closing stock price on August 3.

As a result, the Abu Dhabi National Energy Co, or Taqa, has the right to buy 10.14 million extra shares priced at $1.40 to keep its ownership interest of 19.9 per cent. 

The Calgary, Alberta-based company also received $83 million from Russian oil and gas giant Gazprom Neft B.V. in back costs from the Garmian production sharing contract.

WesternZagros is the operator of the Garmian block, which contains the producing Sarqala-1 oil well, the Mil Qasim discovery and several undrilled exploration prospects.

The production sharing contract will see the Kurdistan Regional Government receive about $27 million in reconciliation, while WesternZagross retains $56 million.