History
On October 22, 2007, WesternZagros became a publicly-traded company listed on the TSX Venture Exchange as a result of the approval of a Plan of Arrangement (the “Plan”) with Western Oil Sands Inc. (“Western”).
In 2003, WesternZagros began examining oil and gas exploration and development opportunities in Iraq with a focus on the Kurdistan region. In November 2004, WesternZagros signed a Memorandum of Understanding (“MOU”) with the Kurdistan Regional Government (“KRG”) Sulaymaniya Administration in order to conduct an exploration study in an area within southern Kurdistan. In March 2005, WesternZagros also signed an MOU with the federal Ministry of Oil in Baghdad regarding various technical cooperation projects.
With the adoption of the Iraq Constitution in October 2005, WesternZagros proposed and negotiated an EPSA with the KRG on the Kalar-Bawanoor Block in southern Kurdistan. This EPSA was signed in Sulaymaniya on May 4, 2006.
In June 2007, a draft Federal Revenue Sharing Law was approved by the Iraqi cabinet representatives and the KRG. According to this law, the Kurdistan Region will receive 17% of net revenue.
On August 6, 2007, the Kurdistan Parliament approved the Kurdistan Region Oil and Gas Law.
On February 28, 2008, WesternZagros signed a Production Sharing Contract ("PSC") with the KRG for the 2,120 square kilometre (523,863 acres) Kalar-Bawanoor Block which amends the Company's previous EPSA.
Under the terms of this PSC, WesternZagros has a 40% interest and the KRG has a direct 20% interest, carried by WesternZagros. The remaining 40% was allocated to a wholly-owned subsidiary of Talisman Energy Inc. by the KRG on June 23, 2008.
On August 2, 2011, WesternZagros finalized an agreement with the KRG and Talisman to amend the original PSC. The agreement divides the contract area of the Original PSC into two contract areas named Garmian and Kurdamir, each operated under a distinct PSC.
WesternZagros will continue to operate the southern contract area named the Garmian Block that covers approximately 1,780 square kilometres and is now governed under the new Garmian PSC. The Garmian Block contains the Sarqala-1 oil discovery, the Mil Qasim-1 prospect, and the other numerous prospects that contributed to a large increase in prospective resources reported by the Company on July 20, 2011. The northern contract area is named the Kurdamir Block. It covers some 340 square kilometres and contains the Kurdamir-1 oil, gas and condensate discovery and is now governed under an amended version of the Original PSC (the “Kurdamir PSC”). The northern area is now operated by Talisman. WesternZagros’s production sharing terms, under both the Garmian and Kurdamir PSCs, remain unchanged from the Original PSC.
