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Thursday, 4 April 2013
WesternZagros Resources puts $14.3 mln private placement financing to bed
WesternZagros Resources (CVE:WZR) says it has closed its private placment financing announced last month with its two largest shareholders, raising $14.3 million in total proceeds.
The company said Thursday it sold 11.43 million common shares at a price of C$1.25 each.
Under the offering, existing shareholders Richard Chandler Corp purchased 9.15 million shares, and Crest Energy International bought 2.28 million shares.
Richard Chandler now holds a total of 71.8 million shares, for around a 15 percent stake, while Crest holds a total of 93.99 million shares for a near 20 percent holding.
"We are very pleased to close this additional private placement with Richard Chandler Corporation and Crest Energy International, especially at a premium to market," said WesternZagros' CEO in its release Thursday, Simon Hatfield.
"Securing strong support from our two largest shareholders validates their confidence in our business plan."
CEO of Richard Chandler, David Walker, added: "The Richard Chandler Corporation's participation in this private placement reflects our continued confidence in WesternZagros as a leader in the development of a dynamic oil and gas industry in Iraq's Kurdistan Region.
"With the support of our additional funding, WesternZagros is well positioned to undertake an active exploration and appraisal program during 2013."
The new funds from the offering, which was completed through a syndicate of agents led by RBC Capital Markets, will be used to reduce the debt outstanding under its senior secured loan agreement with Crest Energy, WesternZagros said.
Last month, the Canadian oil and gas junior received $123 million through a debt and equity financing by existing shareholder Crest Energy. These funds will be used for the company's 2013 capital and operating program.
Drilling on its Kurdamir-3 appraisal well on the Kurdamir Block in Iraq began in February, with 3D seismic surveys also underway on both the company's Kurdamir and Garmian blocks.
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 the potential extension of the Kurdamir discovery.