In the latest in a string of foreign investment developments in the Kurdish region of Iraq, Canadian explorer WesternZagros has obtained equity financing from Crest Energy International worth CAN$57 million.
Crest will buy 40.7 million shares at CAN$1.40 per share, a premium of around 10% from WesternZagros’s 4 August closing price on the Toronto TSX Venture Exchange, in a deal which it says will secure “financial stability” for the explorer’s drilling program.
WesternZagros ran over budget on previous exploration wells early in its drilling program.
TAQA, the power, water and oil & gas company majority controlled by the government of Abu Dhabi, currently holds a 19.9% stake in WesternZagros. The company will have an opportunity to top up its stake buy purchasing up to 10.1 million further shares at the same price as Crest, which would further boost WesternZagros’s capital base. TAQA bought in to WesternZagros in October 2011 at $0.63 per share.
“The Crest financing and the Garmian TPP assignment will help us to pursue a number of attractive opportunities by accelerating our drilling programs,” said WesternZagros CEO Simon Hatfield.
“Securing this funding facilitates our next stage of growth and development. Crest is an excellent investor for WesternZagros. The firm is already active in Kurdistan and is a founding member with the United States Kurdistan Business Council. The Council has a mandate to promote economic opportunities and support the development of the Kurdistan Region as a secure, stable, and economically prosperous area of Iraq.”
Crest is an affiliate of Crest Investment Company, a Houston, Texas-based principal investment company specializing in energy investments, including projects in the Middle East.
WesternZagros also announced that it has received $83 million in back costs from Gazprom Neft, after the oil arm of the Russian state energy company signed an agreement with the Kurdish regional government to take a 40% interest in the Garmian block in the south east of the region. Gazprom Neft and WesternZagros are now sharing the costs of exploration in the Garmian block equally.
