WesternZagros reports first contingent resources of 24 million barrels at Sarqala-1

WesternZagros Resources (CVE:WZR) reported Thursday that its gross contingent resources for Sarqala-1 were about 24 million barrels (MMBBL), or 31 million barrels of oil equivalent (mmboe) as of Sept. 7.

Contingent resources are quantities of oil estimated, as of a given date, to be potentially recoverable from known accumulations, but the projects are not yet considered mature enough for commercial development due to one or more contingencies.

WesternZagros said that consulting firm Sproule International finished its independent audit resource assessment for the Jeribe/Upper Dhiban reservoir interval of the Sarqala-1 well and confirmed the prospectivity of the company’s blocks’ assets.

The total mean estimate of gross unrisked prospective oil resources for the Jeribe/Upper Dhiban reservoir interval of the Sarqala-1 well increased to 250 million barrels of oil equivalent (boe). Previously, the gross unrisked prospective mean estimates in the Jeribe reservoir of Sarqala-1 were 101 million barrels, or 137 mmboe. 

The well rests in the Garmian Block in the Kurdistan Region of Iraq and was drilled on the crest of the Sarqala structure.

In a statement, WesternZagros' CEO Simon Hatfield said: "We continue to be encouraged by the steadily continuing rise in recoverable resource estimates and look forward to starting the extended test of the Sarqala-1 well in the near future."

"Not only does the confirmation of contingent resources at Sarqala also result in a significant increase in prospective resources, it substantially reduces the risk associated with them."

WesternZagros said the contingent resource number does not include the major prospective resource potential on the flanks of the Sarqala structure deeper than the lowest know oil at 3,485 metres, nor a potential of an extension of the reservoir interval on the southwest flank of the structure.

The contingent resources were assigned over a 66 metre gross pay zone from the top of the reservoir down to 3,385 metres determined by wireline logs and production testing. This is the same interval that resulted in a test of up to 9,444 barrels of oil per day first reported on June 7, 2011.

WesternZagros said the recent resource number reveals an increase in the combined mean estimate of gross unrisked prospective resources for the Jeribe/Upper Dhiban, Oligocene, Eocene and Cretaceous reservoir intervals in the Sarqala structure to 296 mmbbl of oil, or 463 mmboe. Previous estimates were 199 mmbbl of oil, or 350 mmboe.

Moreover, the numbers also reflect a rise in the combined mean estimate of gross unrisked prospective resources on the company’s two contract areas in Kurdistan to 2.28 billion barrels of oil, or 3.68 billion barrels of oil equivalent. Previously, these estimates were 2.19 bbl oil, or 3.57 billion boe.  

WesternZagros is an international natural resources company engaged in the exploration, development and production of crude oil and natural gas in Iraq. It holds two production sharing contracts with the Kurdistan Regional Government, in Iraq.

The Calgary, Alberta-based company’s stock closed at 53 cents Wednesday on the Toronto Stock market.