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Thursday, 21 March 2013
WesternZagros to raise an additional $14.3 mln in new funds
WesternZagros Resources (CVE:WZR) says it will raise an additional $14.3 million after earlier this week closing on a $123 million financing from Crest Energy International.
The oil and gas producer made the announcement of the incremental private placement late yesterday, and this morning announced the terms of the new offering, which will be conducted by a syndicate of agents led by RBC Capital Markets.
Under the terms, the company will sell up to 11.43 million common shares at a price of C$1.25 per share. The deal is expected to close in early April, pending the necessary regulatory approvals.
On Monday, WesternZagros received $123 million through a debt and equity financing by Crest Energy, which now holds almost 20 per cent of the Canadian junior's shares. These funds will be used for the company's 2013 capital and operating program.
Specifically, the Crest money will go toward the continued appraisal of the Kurdamir Oligocene discovery in Iraq, as well as exploration on the Garmian Block and the continued appraisal of the Sarqala find.
The funds from the private placement offering just announced will go toward repaying the loan from Crest Energy.
Last month, WesternZagros said it spudded the latest well of its exploration and appraisal program in the Kurdistan region of Iraq as it looks ahead to what it calls a "transformational year" for the oil and gas producer.
Drilling on its Kurdamir-3 appraisal well on the Kurdamir Block began in February, with 3D seismic surveys also underway on both the Kurdamir and Garmian blocks.
Last year, the company saw a number of milestones, including several successful well tests at its giant Kurdamir discovery in Iraq, which led to a substantial resource boost.
The third appraisal well on the block is expected to take around four months to reach the planned total depth of 2,800 metres. The well is being drilled on the southwest flank of the Kurdamir structure, around 3 km and 5 km from its Kurdamir-1 and Kurdamir-2 discovery wells, respectively.
The junior oil and gas company said Kurdamir-3 will further appraise the extent of the oil leg in the Oligocene interval, previously found in the Kurdamir 1 and 2 wells.
WesternZagros has a 40 per cent working interest in the Kurdamir block, while Talisman Energy (TSE:TLM), the operator of the well, also holds a 40 per cent working interest, with the Kurdistan regional government holding the remainder.
At the company's Garmian Block, the Baram-1 well is planned to spud in the third quarter of this year, in order to explore this potential extension of the Kurdamir discovery.
WesternZagros expects the well to take around five months to reach the planned total depth of 3,800 metres, and said it believes the well has the potential to also prove up "significant additional gross contingent oil resources" on the Kurdamir Block.