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Press release from Marketwire

WesternZagros Secures $123 Million Financing from Crest Energy International

Monday, March 11, 2013

WesternZagros Secures $123 Million Financing from Crest Energy International01:40 EDT Monday, March 11, 2013CALGARY, ALBERTA--(Marketwire - March 11, 2013) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATESWesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or the "Company") is pleased to announce that it has entered into an investment agreement (the "Investment Agreement") with Crest Energy International LLC ("Crest"). Under the Investment Agreement, Crest will purchase, through a non-brokered private placement, 51,000,000 Common Shares in the Company at $1.25 per share for gross proceeds of $63.75 million (the "Private Placement"). This price represents an approximate 25 percent premium to the March 8, 2013 closing share price of $1.00. Crest currently holds 9.9% of the issued and outstanding Common Shares and following completion of the Private Placement will hold approximately 19.8%. In addition, WesternZagros and Crest have entered into a senior secured loan agreement (the "Loan Agreement") pursuant to which Crest has agreed to loan to WesternZagros US$57.5 million (approx. $59.2 million) (the "Loan"). The Loan will accrue interest at the rate of 6 percent per annum and will be secured by 10 percent of the outstanding shares of WesternZagros's operating subsidiary. The Loan, together with all accrued interest, is to be repaid in full on the last day of the 18th calendar month following the month in which funding of the Loan occurs, subject to certain prepayment terms, including but not limited to a partial repayment obligation in the event of a future equity offering by the Company or following the occurrence of an event of default.The proceeds from the Private Placement and the Loan will be used for WesternZagros's 2013 capital and operating program pursuant to which the Company will focus on the continued appraisal of the Kurdamir Oligocene discovery, exploration activities on the Garmian Block and continued appraisal of the existing Sarqala discovery.Completion of the Private Placement and the Loan are subject to certain conditions. The Company expects the closing to occur on or before March 18, 2013. The Common Shares issued under the Investment Agreement will be subject to a hold period until the date which is four months from closing.Pursuant to the Investment Agreement, Crest will continue to have certain rights to participate for its pro-rata share in future equity issuances by the Company. In addition, upon completion of the Private Placement, Crest will have the right to appoint an additional nominee to the Company's Board of Directors. Eric Stoerr, an officer of Crest, has been a member of the Board since August 2012.RBC Capital Markets acted as financial advisor to the Company on the Private Placement.About WesternZagros Resources Ltd.WesternZagros is an international natural resources company focused on acquiring properties and exploring for, developing and producing crude oil and natural gas in Iraq. WesternZagros, through its wholly-owned subsidiaries, holds a 40 percent working interest in two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq. WesternZagros's shares trade in Canada on the TSX Venture Exchange under the symbol "WZR".About Crest Energy International LLCCrest is an affiliate of Crest Investment Company, a Houston, Texas-based principal investment company specializing in energy investments, including projects in the Middle East. It is primarily involved in midstream oil and gas, but has substantial expertise in the high technology, manufacturing and real estate sectors. This news release contains certain forward‐looking information relating, but not limited, to the closing of the private placement, funding of the loan and anticipated timing thereof. Forward-looking information typically contains statements with words such as "anticipate", "plan", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Company cautions readers not to place undue reliance on forward‐looking information 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 to differ materially from those anticipated by WesternZagros. In addition, the forward‐looking information is made as of the date hereof, and the Company assumes no obligation to update or revise such to reflect new events or circumstances, except as required by law.Forward‐looking information is not based on historical facts but rather on management's current expectations and assumptions regarding, among other things, timely receipt of all necessary stock exchange approvals, plans for and results of drilling activity and testing programs, future capital and other expenditures (including the amount, nature and sources of funding thereof), continued political stability, and timely receipt of any necessary government or regulatory approvals. Although the Company believes the expectations and assumptions reflected in such forward‐looking information are reasonable, they may prove to be incorrect. Forward‐looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by WesternZagros including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; interruptions in operations together with any associated insurance proceedings; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. For further information on WesternZagros and the risks associated with its business, please see the Company's Annual Information Form dated March 26, 2012, which is available on SEDAR at RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50® COMPANY IN 2012 AND 2013. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS USED UNDER LICENSE.FOR FURTHER INFORMATION PLEASE CONTACT: NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE Contact Information: WesternZagros Resources Ltd.Greg StevensonChief Financial Officer(403) 693-7007WesternZagros Resources Ltd.Tony KraljicVP Business Development(403) 693-7011WesternZagros Resources Ltd.Lisa HarrimanManager of Investor Relations(403) 693-7017investorrelations@westernzagros.comwww.westernzagros.comSmithfield GroupJohn KielyJames McFarlane+44 (0) 20 7360