Stifel Nicolaus Energy Conference 2011 Montreal, Quebec ... · • Confirmed oil discovery at...

Stifel Nicolaus Energy Conference 2011Montreal, Quebec June 9-10, 2011

Caution to the Reader

This presentation contains forward-looking statements with respect to WesternZagros, including but not limited to operational information, future exploration and testing plans and estimatedcosts associated, therewith working capital, production and resources. Forward-looking information typically contains statements with words such as “anticipate”, “estimate”, “potential”,“could”, or similar words suggesting future outcomes. WesternZagros cautions readers and prospective investors in the Company’s securities to not place undue reliance on forward-lookinginformation as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results todiffer materially from those anticipated by WesternZagros. Readers are also cautioned that disclosed test rates and potential production rates may not be indicative of ultimate production levels.In addition, the forward looking information is made as of the date hereof, and WesternZagros assumes no obligation to update or revise such to reflect new events or circumstances, except asrequired by law.

Forward looking information is based on management's current expectations and assumptions regarding, among other things, plans for and results of drilling activity, future capital and otherexpenditures (including the amount, nature and sources of funding thereof), future economic conditions, insurance recoveries, future currency and exchange rates, continued political stability,continued participation of, and resolution of discussions with, the Company’s co-venturers, and the Company's continued ability to obtain qualified staff and equipment in a timely and costefficient manner. In addition, budgets are based upon WesternZagros' current exploration plans and anticipated costs both of which are subject to change based on, among other things, theactual results of drilling activity, the outcome of discussions with the Company’s co-venturers unexpected delays and changes in market conditions. Although the Company believes theexpectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect.

WesternZagros’ operations are subject to all the risks normally incident to the exploration, development and operation of crude oil and natural gas properties and the drilling of crude oil andnatural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, potential environmental damage, blow-outs, fires and spills, all of which couldresult in personal injuries, loss of life and damage to property of WesternZagros and others; environmental risks; delays or changes in plans with respect to exploration or development projectsor capital expenditures; the ability to attract and retain key personnel; the risk of commodity price and foreign exchange rate fluctuations.

All of WesternZagros’ assets are located in Kurdistan. As such, WesternZagros is subject to political, economic, and other uncertainties, including, but not limited to, the uncertainty ofnegotiating with foreign governments, expropriation of property without fair compensation, adverse determinations or rulings by governmental authorities, changes in energy policies or thepersonnel administering them, nationalization, currency fluctuations and devaluations, disputes between various levels of authorities, arbitrating and enforcing claims against entities that mayclaim sovereignty, authorities claiming jurisdiction, potential implementation of exchange controls, royalty and government take increases and other risks arising out of foreign governmentalsovereignty over the areas in which WesternZagros’ operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and insurrections. WesternZagros’operations may be adversely affected by changes in government policies and legislation or social instability and other factors which are not within the control of WesternZagros including, amongother things, adverse legislation in Iraq and/or the Kurdistan Region, a change in crude oil or natural gas pricing policy, renegotiation or nullification of existing concessions and contracts, taxationpolicies, economic sanctions, the imposition of specific drilling obligations and the development and abandonment of fields.

The ability of WesternZagros to successfully carry out its business plan is primarily dependent on the continued support of its shareholders, the discovery of economically recoverable reserves,continued receipt of insurance proceeds, its co-venturers’ continued participation in the exploration activities under the PSC, and the ability of the Corporation to obtain financing to developreserves. WesternZagros’ cash balance may not be sufficient to fund its ongoing activities at all times and carry the KRG’s 20 per cent interest under the PSC. From time to time, WesternZagrosmay require additional financing in order to carry out its oil and gas acquisition, exploration and development activities. In addition, any change in the co-venturers’ participation could increasethe Company’s capital requirements. Failure to obtain such financing on a timely basis could cause WesternZagros to forfeit its interest in certain properties, miss certain acquisition opportunitiesand reduce or terminate its operations. It is possible that future global economic events and conditions may result in further volatility in the financial markets which, in turn, could negativelyimpact WesternZagros’ ability to access equity or debt markets in the future.

Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors should not place undue reliance on these forward-looking statements. For a full discussion of the risk factors, please refer to the Annual Information Form and fourth quarter, 2010 MD&A on SEDAR at www.sedar.com or on the Company’s web site. Additional information relating to WesternZagros is also available on SEDAR at www.sedar.com, including the Company’s material change reports dated December 16, 2010 and January 17, 2011, which include the risks and level of uncertainty associated with the Company’s ability to recover resources from the PSC lands.

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http://www.sedar.com/

http://www.sedar.com/

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WesternZagros: on the Cusp of a Major Oil Discovery

Targeting over 1 billion BOEs in the next 3 wells

Audited resource assessment numbers based on recent well results

2011 exploration wells will be in formations that have already been drilled

Drilling results support the potential of a giant oil field

WesternZagros’ PSC lands encompass one of the largest exploration areas in Kurdistan, one of the world’s most exciting exploration regions

Our Strengths

Assets• Over a billion BOEs of prospective resources (audited) to be drilled in the

next 12 to 18 months (see slides 44 through 47, inclusive)• Liquid hydrocarbons found at both wells drilled to date

• Confirmed oil discovery at Sarqala-1 (Garmian Block)• Confirmed oil discovery and gas and condensate discovery at Kurdamir-1 (Kurdamir

Block) – a potentially giant field

• The Kurdamir and Garmian Blocks, combined, form one of the largest (2,120 km2/500,000 acre) exploration areas in the Kurdistan Region of Iraq

• Multiple prospects and leads in the Garmian Block

Experience• Experienced management and technical teams• Ability to apply knowledge of the wider region and its exploration drilling

risks• Lessons learned from two challenging wells drilled in the region to-date

Discipline• Cost reduction through planning, experienced execution and risk mitigation

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WesternZagros Today

Symbol (TSX Venture Exchange)

Basic Shares Outstanding1

Diluted Shares Outstanding2

Director & Officer Ownership3

Market Capitalization4

Average Daily Trading Volume (3 month)

Working Capital5

Head Office

International Office

WZR

297.1 million

315.8 million

8.1%

$240 million CDN

0.7 million

$78.5 million US

Calgary, Alberta, Canada

Sulaymaniyah, Kurdistan Region of Iraq

1 Basic shares outstanding at June 6, 20112 Diluted Shares Outstanding include options granted as at June 6, 20113 Including share ownership and options granted as at June 6, 20114 As of June 6, 20115 December 31, 2010 working capital plus proceeds of March 10, 2011 private placement financing - see Slide 34 for details

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The Kurdistan Region of Iraq Hunting Grounds for Giant Fields

• Tremendous potential of the region long recognized by industry

• WesternZagros in early: hand-picked its exploration acreage

• Our PSC lands contain a large number of prospects and leads with multiple reservoirs: light oil prone

• Kurdamir and GarmianBlocks: Size of the prize is over 1.75 billion BOEs of prospective resources*

• Discoveries at both Kurdamir-1 and Sarqala-1 wells 6

* Independently audited by Sproule International Limited.

See Slides 43 through 46, inclusive, for data.

WesternZagros Kurdamir and Garmian Blocks Located for Success

• Proven light oil – desirable to enhance export blend 69% of Iraq’s reserves are 27

degrees API or heavier*

• Located south of the mountain front

• Good preservation of proven world class reservoirs

• In the proven Oligocene Fairway

• On trend with the super giant Kirkuk oilfield

• Proximity to infrastructure

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* Source: WesternZagros confidential files

The WesternZagros Story: Getting to the Cusp

One of the first four operators in the Kurdistan Region:

• Large hand-picked exploration block

Over 1,500 kilometres of high quality 2-D seismic acquired

• Identified multiple prospects and leads• Identified and mapped Oligocene reservoir

fairway

Drilled Sarqala-1 (Garmian Block) to Eocene• Significant oil shows in Upper Fars, Jeribe and

Oligocene formations• Challenging well: gained geological insights

and operational learnings

Drilled Kurdamir-1 (Kurdamir Block) to Cretaceous• Discovered oil in the world class Oligocene

reservoir• Discovered a large gas cap with high condensate

yield• Numerous deeper oil and gas shows

Updated resource assessment• Sproule audit of prospective resources supports

over 1.75 billion BOEs and 1 billion barrels of oil• Assessing additional prospects

PSC Amendments• Nearing completion of negotiations with the KRG

and Talisman to split the Original PSC into the Kurdamir PSC and the Garmian PSC, with WZ retaining a 40% working interest in both

Drilled Sarqala-1 Sidetrack (Garmian Block) to Jeribe• Discovered oil in the Jeribe Formation

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Three Wells to Target over 1 Billion BOEs of Prospective Resources *

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$30 - 35 million gross cost

$60 -65 million gross cost

$60 -65 million gross cost

* See Slides 43 through 46, inclusive, for detail on resource estimates.

** Includes the costs of casing repair operations, estimated at approximately $10 million, with WesternZagros funding the subsequent sidetracking and testing operations 100 per cent and expects the gross costs associated with these operations to be in the range of $10 to 15 million.

Sarqala-1 Re-Entry Oil discovery in the Jeribe Formation

Mil Qasim-1 Estimated 2011 Q2 spud

Kurdamir-2 Estimated 2011 Q4 spud

$25- 30 million gross cost **

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Near Term Potential Value Creation: 2011-2012

Gross Unrisked Prospective Resources (Audited) *

Size of the prize is over 1 billion BOEs of prospective resources

(Tested)

* See Slides 43 through 46, inclusive, for data

1900 metres gross

hydrocarbon interval

June 2011 Oil Discovery!9,444 bopd /40° API

light oil

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Kurdamir and Garmian Blocks – Oil Prone

• Analysis of actual oils and condensate recovered confirms Aaliji source rock**

Aaliji Source Rock Maturity Map

**Analysis conducted by Weatherford Labs

Hydrocarbon samples from Sarqala and Kurdamir wells and surface seeps

*Map modified from proprietary Fugro Robertson Study, 2010

Kurdamir -1 Well Discovery

• Burial history modeling confirms Aaliji source is currently generating oil*

Multiple Prospects: Oil & Gas

Garmian Block Drilling Plans

Mil Qasim-1 (Third commitment well)

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Topkhana-1 well

(Talisman - Block 39)

- Drilling commenced in Q1 2011

- WesternZagros has no ownership interest

Significant well in adjacent Block

Kurdamir Block

Drilling Plans

Kurdamir-2 well

Hydrocarbon Habitat of Surrounding Discoveries

Most of the fields in the chart that show shallow discoveries may have remaining undiscovered potential if drilled deeper.

Sources include: 2006 Petroleum Geological Analysis Ltd. (PGA) Report and news releases.

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1200 metres gross


1800 metres metres gross hydrocarbon

interval

1900 metres gross


Oil Discovery

Near Term Opportunities of the Garmian Block

Sarqala

• Oil discovery in the Jeribe Formation

• Flowed light, 40° API oil at rates of over 9,000 bopd

Mil Qasim

• Drilling site prepared, planned spud date in Q3 2011

• Upper Fars reservoir targeted that had oil shows while drilling Sarqala-1

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Sarqala-1 Well

Oil Discovery at Sarqala (Garmian Block)

• Sarqala-1 sidetrack completed

• The Jeribe Formation flowed light, 40° API oil at rates of over 9,000 bopd(no stimulation, no water)

Sarqala-1 Well 15

Sarqala-1 (Garmian Block): Oil Discovery

Composite Seismic Section (SW to NE) of re-entry location

• Sidetrack completed through JeribeFormation

• Final flow rates of over 9,000 bopd

• Major upside of oil (prospective resources) in the Jeribe reservoir is : P90 - P50 -P10 MMbbls : 9 – 66- 248

• Resources to be updated following testing

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Horizon Legend

Ground Elevation

Upper Fars

Lower Fars Evaporite

Base Fars Detachment

Lower Fars Transition Beds

Oligocene

Aaliji

Shiranish

Follow On Opportunity at Mil Qasim-1 (Garmian Block)

• Younger and shallower structure than Sarqalaand the geology and drilling is expected to be much simpler

• Crest lies approximately three kilometres from Sarqala-1

• Anticipate spud date of Mil Qasim-1 is July, 2011

• Anticipate oil bearing sandstones in Upper Fars reservoir

Sarqla-1 Well Oil Discovery

Mil Qasim-1 (Third Commitment Well) 17

Mil Qasim-1 (Garmian Block): Ready to Drill

Composite Seismic Section (SW to NE) of Mil Qasim-1 and Sarqala-1 locations

• Drilling planned after Sarqala-1 re-entry, before Kurdamir-2. Viking Rig #10 secured to drill Mil Qasim-1.

• Target Upper Fars reservoir, where high pressure 35 - 42 degree API oil was encountered at Sarqala-1

• Proposed total depth of 2,400 metres

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Horizon Legend

Upper Fars




Jeribe

Dhiban

Euphrates

Oligocene

Aaliji

Shiranish

Qulijan-1 (Garmian Block): Step Out Exploration Near Kurdamir

Composite Seismic Section (SW to NE) of Kurdamir-1 and Qulijan-1 locations

• New mapping indicates large prospect

• Follow up potential to Kurdamir-2 and Topkhana

• Well site is prepared and drill ready

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Horizon Legend

Ground Elevation

Upper Fars




Oligocene

Aaliji

Shiranish

• Kurdamir-2 well to be drilled by June 30, 2012

• Drill site location confirmed

• Sourcing of long-lead items underway

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Near Term Opportunities of Kurdamir Block

Well Testing at the Kurdamir-1 – November 2010

Kurdamir Discovery (Kurdamir Block)

• Drilled through Oligocene, Eocene, Cretaceous (Shiranish and Kometan) reservoirs

• Penetrated a gross interval of approximately 1,900 metres of hydrocarbon shows

• Shut well in at 4,077 metres

• Drilled sidetrack to 3,214 metres

• Tested Oligocene, light oil discovered

• Discovered large Oligocene gas cap

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Confirmed excellent Oligocene reservoir

• Confirmed oil column in the Oligocene reservoir, testing light oil with major upside

• Prospective Resources (MMbbls)P90 P50 P10

Oil 85 260 560

• Discovered gas and condensate• Drill stem tests flowed 27.5 MMcf/d of gas and

1,172 bbls/d of 61⁰ API natural gas liquids• High predicted rates of over 50 MMcf/day of

gas and 2,240 bbls/d of condensate• Contingent Resources (Gas in BCF and

Condensate in MMbbls)P90 P50 P10

Gas 505 850 1420Condensate 22 33 48

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Oil shows in Eocene and Cretaceous reservoirs

• Major upside in deeper untested zones

Prospective Resources (oil) P90 P50 P10 MMbbls18 86 273 Eocene59 152 340 Cretaceous

Success at Kurdamir

Well Testing at the Kurdamir-1 – November 2010

Kurdamir-Topkhana Structure: The Potential Oligocene Reward

Oil is confirmed in the Oligocene reservoir

• Analysis of condensate discovered on crest of Kurdamir-Topkhana Structure indicates an oil source

• Gas cap on crest of Kurdamir-TopkhanaStructure is similar to existing giant oil fields in Iraq and Iran

The flanks of the Kurdamir-Topkhana Structure appear most promising

• Gas caps are frequently associated with downdip oil columns on the flanks of the structure or deeper oil columns in the Cretaceous

• Producing oil fields with similar structures: Bai Hassan, Kirkuk and Khabbaz

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Kurdamir-Topkhana Structure

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• Topkhana well results in 2011 to confirm whether the Kurdamir Structure extends off the Block

WesternZagros has no ownership interest in this well

• Kurdamir-2 will be the important test of the oil potential in the Oligocene, Eocene and the Cretaceous of the structure

• Potentially one of the world’s biggest oil fields• Mean prospective resources: 585 MMbbls on

Kurdamir Block alone

Bai Hassan: Analogue for Kurdamir-Topkhana Structure

• Bai Hassan: a proven oil field, has a similar structure to Kurdamir-Topkhana

• 2.2 billion barrels of oil discovered in 1953

Bai Hassan

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Kurdamir-Topkhana Structure: The Potential Oligocene Reward

Depth map of Oligocene Formation

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• Prospective resources (audited) have more than doubled from our November 26, 2009 assessment

• Cased hole testing indicated substantially larger structure as no formation water was found

• Potentially one of the world’s biggest oil fields

• Topkhana well results in 2011 to confirm whether the Kurdamir Structure extends off the Block

• WesternZagros has no ownership interest in this well

Kurdamir-Topkhana Structure: Additional Potential Reward –Eocene and Cretaceous

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• Potential similar to Oligocene in the deeper zones: Eocene and Cretaceous (Shiranish and Kometan)

Depth map of Cretaceous Formations

Kurdamir (Kurdamir Block): Planning the Next Well

• Drill Kurdamir-2 to test the Oligocene, Eocene and Cretaceous formations

• 1,900 metre gross hydrocarbon interval identified

Composite Seismic Section (SW to NE) of Kurdamir-1 and Kurdamir-2 locations

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Horizon Legend

Ground Elevation

Upper Fars




Oligocene

Aaliji

Shiranish

Multiple Transportation and Market Options

• Well-established oil export routes:

• Mediterranean and Persian Gulf

• Potential pipeline capacity:

• Kirkuk-Ceyhan System

• Kirkuk-Basra

• Baniyas-Syria System

• Proposed system within Kurdistan

• WesternZagros early production, likely from Sarqala-1

well, supplied to Kirkuk-Ceyham pipeline

• Developing Kurdistan gas infrastructure

• Gas pipeline: Kor Mor to Erbil

• 2 gas powered electricity plants29

• Proposed natural gas pipeline

• Nabucco shareholders: OMV, MOL, RWE

increasing their presence in Kurdistan

Key Developments – Northern Ministry of Oil Proposed Four Year Plan*

• One of two oil export pipeline systems (40” diameter) from Kirkuk to Ceyhan(Turkey) has current capacity of 650 thousand bpd to be increased to 1 million bpd through the rehabilitation of existing unused pipeline

• Rehabilitation of the second pumping station for the Kirkuk – Ceyhan pipeline

• The Iraqi Ministry of Oil plans to extend the Iraqi – Syrian pipeline; the project consists of:

⁻ Light oil pipeline: 1.25 million bpd with all necessary facilities

⁻ Heavy oil pipeline: 1.50 million bpd with all necessary facilities

⁻ Gas pipeline: suitable to export Iraqi surplus gas to Syria then on to other countries

• Proposed N. Iraq field development projects for 2011-2014 include:

⁻ Development of two fields in the northern region (Hamrin and East Baghdad fields)

⁻ Drilling 27 development wells (annual program) in 5 northern fields fields (Kirkuk, Bi-Hassan, Khabbaz, Hamrin and Ajeel)

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*Excerpts from Iraq Oil Report – April 28, 2011

Political Environment Showing Significant Progress

October 2005

Iraqi constitution adopted

February 2007Draft Federal Petroleum Law

June 2007 Agreement on initial revenue sharing -17% of net oil revenues from all regions in Iraq go to Kurdistan

August 2007KRG Petroleum Law approved

March 2010 Iraq holds its first fully-supported democratic election

December 2010 Iraq President, Prime Minister and cabinet appointed 31

February 2011 Iraq Prime Minister announces Kurdistan PSCs will be respected

Oil exports from Kurdistan resume

April 2011 Kurdistan Prime Minister presents first KRG oil export statement to Iraq federal finance ministry – over 5 million barrels delivered to state marketing agency since February 2011

May 2011

Federal Ministry of Finance confirms release of the first oil export payment to KRG contractors (approximately 50% of net revenues)

Proposed PSC Amendments – Kalar Bawanoor Block Split

• WesternZagros, Talisman, and the KRG will divide the original Kalar-Bawanoor Block into two contract areas, each under a separate PSC.

• The northern area (340 sq km) will remain under an amended version of the original PSC and will be called the Kurdamir Block. It will contain the Kurdamir discovery.

• The southern area (1,780 sq km) will be governed under a new PSC and will be called the Garmian Block. It will contain the Sarqala discovery and the Mil Qasim, Qulijan and Baranprospects.

• WesternZagros’ 40% ownership and economic terms will remain unchanged in both PSC agreements.

• WesternZagros will retain operatorship of the Garmian Block. Talisman will become operator of the Kurdamir Block.

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Production Sharing Contract (PSC): Fair and Balanced Terms Kurdamir and Garmian Blocks

Oil CaseWhen the R-Factor (revenue/cost) is below one, the Contractor Group is entitled to 35% of the Profit Oil. The Contractor Group’s percentage is then reduced on a linear scale to a minimum of 16% as the ratio is 2 or greater.

Gas CaseWhen the R-Factor is below one, the Contractor Group is entitled to 40% of the Profit Gas. The Contractor Group’s percentage is then reduced on a linear scale to a minimum of 20% as the ratio is 2.75 or greater. Cost recovery gas: up to 55% of net available gas.

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Royalty Oil10% of total crude oil

Financial Position (US$ millions)

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Working Capital Position (as at December 31, 2010)

Cash 31.5

Non-Cash Working Capital (11.6)

Insurance Receivable * 17.6

Working Capital 37.5

Proceeds of March 10, 2011 Financing 41.0

Total 78.5

2011 Capital and Operating Budget

Drilling and Related Operations ** 80.0

Field Office 5.0

G&A and Business Development 10.0

2011 Capital and Operating Budget 95.0

• Subsequent to December 31, 2010, WesternZagros has received $16.2 million of the insurance receivable balance and continues to pursue the remaining amounts.

** Includes the requirement for the Corporation to fully fund the Sarqala-1 re-entry and Mil Qasim-1 well and to fund its share of the costs of Kurdamir-2 well. Although WesternZagros is fully funding the Sarqala-1 re-entry and the Mil Qasim-1 well, 40% of these costs (approximately $25 to $30 million) will be refunded by the third party participant when this interest is assigned by the KRG.

Long-term benefits for the local community: health, water, education and recreation

Strong focus on health, safety and security

Outstanding employees

Corporate Social Responsibility

Making a Difference Where We Operate

• We work with key stakeholders in our area of operations

• We aim at establishing sustainable long-term benefits for the local community

• We target the health, water, education and recreation sectors

• We believe in creating a positive impact in the local community and improving quality of life

• We consult with communities and liaise with other operators, NGOs and KRG institutions to determine our CSR activities

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Corporate Social Responsibility Investment Priorities

WesternZagros: Next Steps

• Sourcing surface facilities to start producing oil during an extended testing program at the Sarqala-1 well (Garmian Block)

• Drill exploration commitment well at Mil Qasim-1 (Garmian Block), incorporating results from Sarqala-1

• Prepare and position Kurdamir-2 (Kurdamir Block) to further explore Kurdamir-Topkhana Structure

• Evaluate Tertiary formation flanks

• Re-drill Eocene and Shiranish formations, applying results from Kurdamir-1 and Talisman’s Topkhana wells

• Evaluate Kurdamir-2 and Topkhana results prior to further exploration drilling

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WesternZagros: On the Cusp of a Major Oil Discovery

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• The Kurdamir and Garmian Blocks, combined, form one of the largest exploration areas in Kurdistan, one of the world’s most exciting exploration regions

• Current team is highly experienced in exploration in challenging regimes

• Conservative approach to financing, resource reporting and drilling• Release only independently audited contingent and

prospective resource numbers• Maintain financial flexibility• Highly attentive to safety • Recognize importance of on-the-ground relationships

• Drilling results support the potential of a giant oil field

• Targeting over 1 billion BOEs in the next 3 wells

Gross Unrisked Prospective Resources (Audited)

June 2011 Oil Discovery!9,444 bopd /40° API light oil

Back Up Information

39Well Testing at the Sarqala-1 Well – June 2011

Experienced Management & Strong Technical Team

Simon Hatfield, CEOProven track record of success with over 30 years of international and domestic oil and gas experience in technical,managerial and executive positions with Western Oil Sands, Imperial Oil, Exxon Production Research Co., PetroCanada, ChauvcoResources and Talisman. Extensive experience in Iraq since 1995.

Greg Stevenson, CFOPreviously Controller of Western Oil Sands. Chartered Accountant with over 13 years of experience working with a major accounting firm as well as with large public companies in the oil and gas industry. Responsible for leading the financial and accounting team.

Dr. George Pinckney, Vice President, Exploration and Reservoir DevelopmentMajority of 35 year career spent with Mobil Oil and ExxonMobil in locations throughout Canada, USA and Southeast Asia, demonstrating extensive international experience. Responsible for all geotechnical work in Iraq including successful completion of Kurdistan study area evaluation; integral role in negotiating Kurdistan PSC area.

Ian McIntosh, Vice President, Kurdistan Business Unit

Over 30 years of international oil and gas experience focusing on development and production engineering, in-country managementand business growth in challenging environments. Previously held executive and managerial positions with Petro-Canada Companies in Libya, Algeria and Tunisia, Adams Pearson Associates, Ranger Oil, British National Oil Corporation, and Shell International Petroleum.

Lee Westermark, General Manager, Operations

Over 35 years of domestic and international experience focusing on drilling management, engineering and operations as well as production operations management and spent the majority of his career with Imperial Oil Limited and ExxonMobil. He has heldexecutive and managerial positions in all areas of Canada as well as internationally in Houston, London and the Middle East.

Dave Reeve, General Manager, Petroleum EngineeringOver 30 years experience in consulting and staff position in the engineering and operation of projects in China, Iran, Australia, Indonesia and domestic. Proficient in production and reservoir engineering, field development design and implementation as well as production operations and project management.

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Board of Directors – Disciplined, Independent, Experienced

David Boone

• Broad Canadian and international energy experience in the upstream industry with positions including President, Offshore and International Operations for EnCana Corporation; Executive Vice-President and Chief Operating Officer of PanCanadian Energy

• President & CEO of Barrick Energy Inc.

• Holds a Civil Engineering degree from Queen's University

Fred Dyment (Chairman)

• Over 30 years of expertise includes positions as President and CEO for Maxx Petroleum and President and CEO of Ranger Oil Limited, in addition to serving as Governor of the Canadian Association of Petroleum Producers (CAPP) from 1995 to 1997

• Serves on the Board of Directors of Tesco Corporation, ARC Energy Trust and TransGlobe Energy Corporation

• Holds a Chartered Accountant designation

John Frangos

• Co-founder of Western Oil Sands, served as Western’s Executive Vice President and COO

• Played key role in negotiations with the Kurdistan Regional Government

• Prior to forming Western, employed with BHP and predecessor corporations for 28 years and was Vice-President, International Business Development for BHP’s Minerals Business Unit

• Holds a Diploma in Mechanical and Electrical Engineering, an Associate Diploma in Mechanical Engineering and a Masters of Business Administration degree

Simon Hatfield

• Proven track record of success with over 30 years of international and domestic oil and gas experience in technical, managerial and executive positions with Imperial Oil, Exxon Production Research Co., Petro-Canada, Chauvco Resources and Talisman

• Holds a Bachelor of Science (Honours) degree in Geology with Physics, a Masters of Science degree in Geology and completed the Executive Development Program at the University of Calgary

• Extensive experience in Iraq since 1995 and initiated Kurdistan opportunity and successfully concluded the signing and ratification of PSC

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Board of Directors – Disciplined, Independent, Experienced

Jim Houck

• Proven track record of success with ChevronTexaco Inc., as President of Texaco Development Corporation from 1996 to 2001 and President of Worldwide Power and Gasification Inc. from 1998 – 2003, in addition to senior level positions in global gas and power, business development, production operations, research and development and strategic planning

• President and CEO of The Churchill Corporation

• Previously a Principal of FrontStreet Partners, a U.S-based, privately-held investment firm

• Holds a Bachelor’s degree in Engineering Science from Trinity University in San Antonio and a Master of Business Administration degree from the University of Houston

Randall Oliphant

• Executive Chairman and Director of New Gold Inc. Served as President and CEO of Barrick Gold Corporation from 1999 - 2003, prior to holding senior financial positions with the firm from 1987- 1999

• Currently serves on the Advisory Board of Metalmark Capital LLC (formerly Morgan Stanley Capital Partners) and serves on the Boards of a number of private companies and not-for-profit organizations

• Holds a Bachelor of Commerce Degree and is a Chartered Accountant

William Wallace

• Over 40 years industry experience including positions as Vice-Chairman, President and COO of Barrett Resources, Regional Vice President and Vice President, Exploration with Texaco and Group Vice President of CSX Oil and Gas Company

• Lived and worked abroad for 16 years. Supervised international operations in Colombia, Ecuador, Venezuela, United Kingdom, Ireland, France, New Zealand, Australia and Pakistan

• Earned a Geology degree from Middlebury College and a M.Sc. in Geology from Stanford University

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Kurdamir and Garmian Blocks Contingent and Prospective Resources

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Please refer to the Company’s material change report dated February 22, 2011 for further disclosure and explanation of the contingent and prospective resources and slides 45-46 for footnotes 1-14 referenced in Tables 1, 2 and 3.

(2011 Targets)Table 1

Gross Unrisked Contingent Resources (1), (2)

Kurdamir Block Oil, Gas and Condensate (As of December 14, 2010) (5)

Low

Estimate(6) Best

Estimate(7) High

Estimate(8) Mean

Estimate(9)

Prospect Reservoir Hydrocarbon P90 P50 P10 Mean

Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf

Kurdamir Tertiary Oligocene Oil 0.7 6.5 60 30

Solution Gas 1 10 100 50

Associated Gas(4) 505 850 1420 920

Condensate 22 33 48 35

Table 2 Gross Unrisked Prospective Resources (3)

Kurdamir Block and Garmian Block Oil, Gas and Condensate (As of January 14, 2011) (5)

Low

Estimate(6) Best

Estimate(7) High

Estimate(8) Mean

Estimate(9)



Kurdamir Tertiary Oligocene(5) Oil 85 260 560 280

Kurdamir Block

Solution Gas 125 405 910 475

MMBOE(14) 106 328 712 359

Kurdamir Tertiary Eocene Oil 18 86 273 124

Kurdamir Block


Associated Gas 30 60 110 65

Condensate 1 1 3 2

MMBOE 28 122 399 181

Kurdamir Cretaceous Oil 59 152 340 181

Kurdamir Block



Condensate 1 3 7 4

MMBOE 84 233 549 285

Kurdamir Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 825

Kurdamir Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 585

Mil Qasim Upper Fars Oil 7 63 265 106

Garmian Block


MMBOE 8 71 303 121

Sarqala Re-entry Jeribe Oil 9 66 248 101

Garmian Block


MMBOE 12 86 338 137

Table 2 Total Mean MMBOE - Gross Unrisked Prospective Resources 1083

Table 2 Total Mean Oil Only – Gross Unrisked Prospective resources 792

Garmian Block Contingent and Prospective Resources

44

Please refer to the Company’s material change report dated February 22, 2011 for further disclosure and explanation of the contingent and prospective resources and slides 45-46 for footnotes 1-14 referenced in Tables 1, 2 and 3.

Table 3 Gross Unrisked Prospective Resources (3),(10)

Garmian Block Oil, Gas and Condensate (As of January 31, 2011)

Low

Estimate(6) Best

Estimate(7) High

Estimate(8) Mean

Estimate(9)



Sarqala(13) Oligocene Oil 18 41 87 48


MMBOE 21 54 117 63

Sarqala(13) Eocene Oil 4 27 109 44



Condensate 1 6 18 8

MMBOE 16 88 303 130

Sarqala(13) Cretaceous Oil 0.5 4 14 6



Condensate 0.3 1 3 1

MMBOE 4 14 44 20

Sarqala Sub Total Mean MMBOE – Gross Unrisked Prospective Resources 213

Sarqala Sub Total Mean Oil Only – Gross Unrisked Prospective Resources 98

Baran(12) Oligocene Oil 8 48 251 105




MMBOE 23 129 618 261

Baran(12) Eocene Oil 0.6 4 27 11




MMBOE 3 14 77 31

Baran Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 292

Baran Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 116

Qulijan(11) Oligocene Oil 7 45 157 66




MMBOE 21 100 307 137

Qulijan(11) Eocene Oil 1 9 34 14




MMBOE 3 20 72 32

Qulijan(11) Cretaceous Oil 0.4 3 13 6




MMBOE 2 9 32 15

Qulijan Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 183

Qulijan Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 86

Table 3 Total Mean MMBOE – Gross Unrisked Prospective Resources 688

Table 3 Total Mean Oil Only – Gross Unrisked Prospective Resources 300

Table 2 and 3 Total Mean MMBOE – Gross Unrisked Prospective Resources 1,771

Table 2 and 3 Total Mean Oil Only – Gross Unrisked Prospective Resources 1,092

Table 3 (Cont’d.) Gross Unrisked Prospective Resources (3),(10)

Garmian Block Oil, Gas and Condensate (As of January 31, 2011)

Low

Estimate(6) Best

Estimate(7) High

Estimate(8) Mean

Estimate(9)



Kurdamir and Garmian Blocks Prospective Resources Footnotes

45

Notes to Tables 1, 2, and 3:

(1) The contingent resources are the gross volumes estimated for the Tertiary Oligocene carbonate reservoirs at Kurdamir-1,

without any adjustments for working interest or encumbrances.

(2) Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from

known accumulations using established technology or technology under development, but which are not currently

considered to be commercially recoverable due to one or more contingencies. Contingent resources have an associated

chance of development (economic, regulatory, market and facility, corporate commitment or political risks). These

estimates have not been risked for the chance of development. There is no certainty that the contingent resources will be

developed and, if they are developed, there is no certainty as to the timing of such development or that it will be

commercially viable to produce any portion of the contingent resources. The Corporation’s Material Change Report dated

December 16, 2010, which is available at www.sedar.com, contains additional detail on the specific contingencies which

prevent the classification of these contingent resources as reserves.

(3) The prospective resources are the undiscovered potentially recoverable gross volumes estimated for the indicated

reservoirs, without any adjustments for working interest or encumbrances. Prospective resources are those quantities of

petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of

future development projects. Prospective resources have both an associated chance of discovery (geological chance of

success) and a chance of development (economic, regulatory, market and facility, corporate commitment or political

risks). The chance of commerciality is the product of these two risk components. There is no certainty that any portion of

the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is

developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any

portion of the prospective resources. In this case, prospective resources are undiscovered resources that indicate

development potential in the event the discovery is commercial and should not be construed as reserves or contingent

resources.

(4) The gross unrisked contingent resources for gas reflect reductions for condensate recovery, surface losses, and fuel gas.

(5) The contingent and prospective resources for the Tertiary Oligocene carbonate reservoir at the Kurdamir-1 well are as at

December 14, 2010, as previously disclosed in the Corporation’s Material Change Report dated December 16, 2010,

which is available at www.sedar.com. The prospective resources for the Tertiary Eocene and Cretaceous carbonate

reservoirs at the Kurdamir-1 well, the Upper Fars reservoir at Mil Qasim, and the Jeribe reservoir at the Sarqala-1 well are

as at January 14, 2011, as previously disclosed in the Corporation’s Material Change Report dated January 17, 2011,

which is available at www.sedar.com

Kurdamir and Garmian Blocks Prospective Resources Footnotes

46

Notes to Tables 1, 2, and 3: (Cont’d)

(6) Low Estimate is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the

actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at

least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

(7) Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that

the actual remaining quantities recovered will be greater of less than the best estimate. If probabilistic methods are used,

there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best

estimate.

(8) High Estimate is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that

the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be

at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

(9) Mean Estimate is the average from the probabilistic assessment.

(10) The prospective resource estimates for the Qulijan Oligocene, Eocene and Cretaceous, Baran Oligocene and Eocene,

and Sarqala Oligocene, Eocene and Cretaceous prospects are based upon interpretation of WesternZagros’ recent

vintage 2D seismic database within Block K44 (1483 kilometres, 42 lines)and well data from WesternZagros’ Kuramir-1

and Sarqala-1 wells.

(11) The Qulijan Oligocene, Eocene and Cretaceous prospective resource assessment is based on eight 2D seismic lines and

offsetting Kurdamir-1 well information.

(12) The Baran Oligocene and Eocene prospective resource assessment is based on nine 2D seismic lines and nearby

Kurdamir-1 well information.

(13) The Sarqala Oligocene, Eocene and Cretaceous prospective resource assessment is based on seven 2D seismic and

information from the Sarqala-1 well drilled in 2008-2009.

(14) Barrels of oil equivalent (BOEs) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl

has been used and is based on an energy equivalency conversion method primarily applicable at the burner tip and does

not represent a value equivalency at the wellhead.

The Region’s Oil & Gas Fields

47

The Region’s Operators

Source: KRG and WesternZagros

Over 40 international oil companies with PSCs in Kurdistan

48

Growing Interest in Iraq

• Kurdistan under-explored relative to the rest of Iraq

• Quality of services increasing

• Security situation has improved

• Oil fields are producing andexporting oil – Tawke and Taq Taq

• Confirmation in May 2011 of oil export payments to KRG contractors (approximately 50% of net revenues)

• Iraq to invite bids for 12 blocks in 2012 (7 for gas and 5 for oil)

49

westernzagros.com

Head Office

600, 440 – 2nd Avenue S.W.

Calgary, Alberta, Canada

T2P 5E9

Tel: 1-403-693-7017

Fax: 1-403-233-0174Email : [email protected]

50Well Testing at the Sarqala-1 Well – June 2011

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