Thursday, 23 May 2013

WesternZagros reports improved Q1 cash position as resources grow

WesternZagros Resources Ltd. (CVE:WZR), a Canadian oil and gas company with operations in Iraqi Kurdistan, reported a 33 percent increase in its cash position at the end of the first quarter as proven resources and output potential improve.
Total current assets, including cash and cash equivalents as well as short-term investments, rose to $198.9 million as of March 31, from $149.2 million at the end of December, the Calgary, Alberta-based company said in a statement on Thursday. 
Last month, WesternZagros closed a private placement of 11.4 million common shares priced at $1.25, raising $14.3 million. In March, WesternZagros received $123 million through a debt and equity financing by existing shareholder Crest Energy International.
WesternZagros said Thursday that the total combined mean estimate of gross unrisked contingent resources at the Kurdamir and Garmian blocks is now 974 million barrels of oil equivalent and the total mean estimate of gross unrisked prospective resources is now 4.7 billion barrels of oil equivalent.
It added that the total combined mean estimate of gross unrisked contingent resources of the Kurdamir structure increased to 545 million barrels of oil in the Oligocene and Eocene reservoirs.
"Our twin goals of increasing proven resources and production potential are our main focus and the first quarter provided a solid start to the year," Chief Executive Officer Simon Hatfield said in the statement.
This year so far, the company has spud an appraisal well on one of its major discoveries and has spud the first well of a planned three-well shallow drilling program and is preparing to spud two more exploration wells, according to the statement.
"We remain very optimistic that the strength of our business model, the proven expertise of our personnel and the evolved efficiency of our drilling program will help us to achieve significant increases in our proven resource estimates throughout the rest of the year," Hatfield said.
Net loss for the three months that ended March 31 widened to $4.157 million from $1.997 million a year earlier. On a per-share basis, the net loss was unchanged at one penny a share compared with the year-earlier period, matching the average estimate of five analysts. 
WesternZagros shares rose 1.8 percent to C$1.14 at the market close in Toronto on Wednesday. The stock gained 4.6 percent since the beginning of the year through Wednesday, compared with a 23 percent loss for the junior S&P/TSX Venture Composite Index(CVE:OSPVX).
The stock, with a market value of C$528.2 million, has 7 "buy", one "strong buy" and one "hold" recommendations from analysts.

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