PSC Terms
On August 6, 2007, the Kurdistan Parliament approved the Kurdistan Region Oil & Gas Law. WesternZagros’ activities under its Production Sharing Contract ("PSC") fall within the jurisdiction of the Kurdistan Region Oil & Gas Law.
Under the terms of WesternZagros' Production Sharing Contract, the schematic below illustrates the sharing of oil.
Under the current PSC terms, the WesternZagros portion of “Profit Oil” is based on a sliding scale from 35% to 16% depending on the R-Factor. The R-Factor is established by reference to the ratio of WesternZagros’ cumulative revenues over cumulative costs. When the ratio is below one, WesternZagros is entitled to 35% of the Profit Oil. WesternZagros’ percentage is then reduced to on a linear sliding scale to a minimum of 16% at a ratio of two or greater.
