WesternZagros Eyes Windfall From KRG Output Gains

A bid for KRG-focused WesternZagros amid rising output and improved payments may signal improved investor confidence in the region’s troubled oil & gas sector.

Investor confidence in Iraqi Kurdistan’s oil sector has taken a hit in recent years with geological downgrades, payment concerns, political upheaval and the advance of the Islamic State. But has it now bottomed out?

Canadian-listed WesternZagros is focused entirely on the KRG, where it has 40% stakes in two blocks – Garmian and Kurdamir. Garmian is the only one currently producing with output from the Sarqala field. Since operatorship transferred to Russia’s GazpromNeft in February 2016 development has stepped up a pace and production has responded accordingly, hitting 7,000 b/d, with the aim of doubling this next year.

The extra revenue WesternZagros expects has caught the eye of its largest shareholder, Crest Energy International, which plans to snap up the remaining shares and take the firm private. A shareholder meeting to decide on the deal is scheduled for 5 July. Apart from a low ball offer from Norway’s DNO to take over London-listed Gulf Keystone in July 2016, this is the first notable M&A effort in the KRG in recent years. (CONTINUED - 960 WORDS)


chart 1: Westernzagros Eyes Substantial Revenue Boost From Sarqala Gains ($Mn)
chart 2: Quarterly Revenues Rise Above $5mn For First Time Since 2Q 2015