WesternZagros Announces 42% Production Increase at Sarqala-1, Further Increases Anticipated

The acid stimulation was completed on March 31, 2017 and Sarqala-1 is currently producing at a stabilized rate of 7,100 barrels per day ("bbl/d") which is close to the limit of the surface equipment in its current configuration. This flow is being achieved on a 48/64 inch choke with a wellhead pressure of 5,800 pounds per square inch ("psi") and with reservoir drawdown of only 220 psi. This compared to a pre-stimulation flow of approximately 5,000 bbl/d on a 40/64 inch choke with a well head pressure of 4,150 psi and a reservoir drawdown of 2,150 psi. The current results represent a 42 percent increase in production rates. There continues to be no formation water produced. Further significant production increases are anticipated once the configuration of the surface equipment has been optimized.

Simon Hatfield, Chief Executive Officer of WesternZagros, commented, "These excellent results, combined with the significant increase in Garmian Reserves that we announced at year-end, reinforce our confidence in the quality of our Garmian Block. We congratulate Gazprom Neft on the results of the acid stimulation and will continue to work with them to optimize production. The enhanced deliverability from Sarqala-1, driven by the high-pressured Jeribe / Upper Dhiban reservoir, provides us with greater confidence in the production potential for future development wells."

The Company's calculations indicate the productivity index ("PI") of Sarqala-1 has increased by an order of magnitude. The PI is a measure of the well's potential to produce - it is the ratio of the production rate to the pressure drawdown at the reservoir. This substantial increase in PI anticipates further production gains as the Operator continues to optimize the surface facilities.

The Company will continue to monitor the increase in production rates and pressures and once sufficient data is obtained to demonstrate sustainability the Company will work with its independent auditors on the potential for a further increase to its reserves and their valuation.