Corporate Presentation June 2012

Transcription

1 Corporate Presentation June 2012 TSX.V: WZR

2 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 estimated costs and timing associated therewith, working capital, production, sales proceeds 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 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. Readers are also cautioned that disclosed test rates and potential production rates may not be indicative of long-term performance or of ultimate recovery. 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 as required 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 and testing programs, future capital and other expenditures (including the amount, nature and sources of funding thereof), future economic conditions, future currency and exchange rates, future oil prices (including domestic prices), continued political stability, continued participation of the Company s co-venturers, successful resolution of disputes, continued ability to successfully market its production, continued ability to obtain qualified staff and equipment in a timely and cost efficient manner. In addition, budgets are based upon WesternZagros' current exploration and appraisal plans and anticipated costs both of which are subject to change based on, among other things, the actual results of drilling and testing activity, unexpected delays, availability of financing and changes in market conditions. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect. WesternZagros s operations are subject to all the risks normally incident to the exploration, production, development and operation of crude oil and natural gas properties and the drilling of crude oil and natural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, potential environmental damage, blow-outs, fires and spills, all of which could result in personal injuries, loss of life and damage to property of WesternZagros and others; environmental risks; inherent uncertainties in interpreting geological data; delays in collecting payment for production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the ability to attract and retain key personnel; and the risk of commodity price and foreign exchange rate fluctuations. All of WesternZagros s assets are located in Kurdistan. As such, WesternZagros is also subject to political, economic, and other uncertainties, including, but not limited to, the uncertainty of negotiating with foreign governments, expropriation of property without fair compensation, adverse determinations or rulings by governmental authorities, changes in energy policies or the personnel administering them, nationalization, currency fluctuations and devaluations, disputes between various levels of authorities, arbitrating and enforcing claims against entities that may claim sovereignty, authorities claiming jurisdiction, potential implementation of exchange controls, royalty and government take increases and other risks arising out of foreign governmental sovereignty over the areas in which WesternZagros s operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and insurrections. WesternZagros s 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, among other 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, taxation policies, 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, its co-venturers continued participation in the exploration activities under the PSCs, and the ability of the Corporation to obtain financing to develop reserves. WesternZagros s cash balance may not be sufficient to fund its ongoing activities at all times and carry the KRG s carried interests under the PSCs. From time to time, WesternZagros may 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 increase or reduce the 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 opportunities and 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 negatively impact WesternZagros s 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 Company s Annual Information Form dated March 26, 2012 on SEDAR at or on the Company s web site. Additional information relating to WesternZagros is also available on SEDAR at including the Company s material change reports dated June 6, 2012 and April , which include the risks and level of uncertainty associated with the Company s ability to recover resources from the PSC lands. 2

3 Corporate Profile: Junior E & P Company Pure Play Symbol on TSX Venture Exchange 1 First Listed Basic Shares Outstanding 2 Diluted Shares Outstanding 3 Director & Officer Ownership 4 Market Capitalization 5 Average Daily Trading Volume (3 mo.) Working Capital 6 Head Office International Office Focused on Kurdistan Region of Northern Iraq WZR October 22, million million 7.6% $345 million CDN 1.8 million $41.0 million US Calgary, Alberta, Canada Sulaymaniyah, Kurdistan Region of Iraq 1 WesternZagros was recognized as a TSX Venture 50 company in TSX Venture 50 is a trade-mark of TSX Inc. and is used under license. 2 Basic shares outstanding at June 12, Diluted Shares Outstanding include options granted as at June 13, Including share ownership and options granted as at June 13, As of June 13, 2012 closing share price 6 December 31, 2011 working capital - see Slide 9 for details 3

4 Our Assets: Two E&P Blocks in Kurdistan, Northern Iraq Assets Early entrant: blocks are one of the largest (2,120 km 2 /500,000 acres) exploration areas, 40% working interest in both On trend with super-giant Kirkuk oil field Oil found at four wells drilled and tested to date: 100% success ratio 4

5 Our Assets: Kurdamir and Garmian Blocks Assets Multiple prospects and leads Over 0.4 billion BOEs of audited mean estimate contingent resources* Over 4.9 billion BOEs of audited mean estimate prospective resources* Oil, gas and condensate discovered at Kurdamir-1 and Kurdamir-2 a giant field, over 1,900 metres of gross hydrocarbon interval Oil discovered at Sarqala-1 (Garmian Block) Oil discovered at Mil Qasim-1 (Garmian Block): analysis of additional well testing ongoing * Independently audited by Sproule International Limited - see Slides 38 through 45, inclusive, for data 5

6 Building on Exceptional Exploration Success and Early Production Kurdamir Discovery: deeper drilling and evaluation beneath major Oligocene Discovery (Eocene and Cretaceous targets) Evaluating extensive testing program of potentially all three reservoirs: July 2012 extended well test of Kurdamir-2 3D seismic program Kurdamir-3 appraisal well Sarqala Discovery: 3D seismic program Sarqala-2 appraisal and production well Hasira-1 exploration commitment well to evaluate the Oligocene and Upper Fars, and appraise the Jeribe reservoir in the Sarqala structure Mil Qasim Discovery: analysis of additional well testing of Upper Fars reservoir evaluating Upper Bakhtiari reservoir shallow drilling exploration program Shipping Pumps: Sarqala-1 Mil Qasim Rig Security Bay: Sarqala-1 Shipping Pump Manifold Sarqala-1 Production Tanks: Sarqala -1 Kurdamir-2 Rig 6

7 Exploration and Appraisal Well Drilling Timeline KURDAMIR PROGRAM Kurdamir-2 Oil Discovery Oligocene, Eocene, Cretaceous Kurdamir 3D Seismic Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Kurdamir-2 Oligocene testing l Eocene and Cretaceous Testing 3D Seismic Comments Drilling and evaluating of Eocene and Cretaceous reservoirs by end H Planning underway with anticipated Q start Kurdamir-3 Oligocene, Eocene, Cretaceous Kurdamir-3 Planning underway with anticipated Q start SARQALA PROGRAM Sarqala-1 Oil Discovery Jeribe Mil Qasim-1 Oil Discovery Upper Fars Sarqala and Mil Qasim 3D Seismic Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Extended well test leading to early production Extended Well Test (EWT) Additional Well Test (AWT) l planned increase to 8,000 bopd Oil discovery l analysis being conducted on completed additional well test for Test 4 interval 3D Seismic Estimated $15-25 million gross cost Comments Estimated $1.2 million gross cost for additional well testing and analysis Mil Qasim Shallow Wells Upper Bakhtiari Shallow Wells Planning underway with anticipated spud date H Sarqala-2 Hasira-1 Upper Fars, Jeribe, Oligocene Hasira-1 Planning underway with anticipated spud date Q Sarqala-2 Hasira-1Upper 3D Seismic Fars, Jeribe, Upper Oligocene Fars, Jeribe Hasira-1 Sarqala-2 Planning underway with anticipated spud date Q

8 Size of the Prize: Garmian & Kurdamir Blocks Size of the prize is over 5 billion BOEs of resources * Appraisal of Discoveries Kurdamir Oligocene (Kurdamir-3 Well) Sarqala Jeribe (Sarqala-2 Well, Hasira-1 Well) Mil Qasim Upper Fars Exploration (related to Discoveries) Kurdamir Eocene, Cretaceous (Kurdamir-2 Well) Sarqala Oligocene (Hasira-1 Well) Upper Bakhtiari (Mil Qasim & & Upper Pichuk) Prospective Resources (related to Discoveries) 2,039 MMbbl 2,703 MMBOE Contingent Resources 171 MMbbl 415 MMBOE Prospective Resources (undrilled) 1,302 MMbbl 2,274 MMBOE Discoveries Jeribe (Sarqala-1 Well) Oligocene (Kurdamir-2 Well) Future Exploration Prospects Qulijan Baran Chwar Upper Fault Trap Bawanoor Saddle Play Zardi Complex Alyan *These are mean estimates. See the Annual Information Form, dated March 26, 2012 and Material Change Reports dated June 6, 2012 and April 23, 2012, for further data 8

9 Financial Position: Forecast to end Q Working Capital Position (as at December 31, 2011) Cash and Short Term Investments 74.5 Non-Cash Working Capital (including trade and other payables) (33.5) Working Capital 41.0 Estimated Proceeds from Extended Well Test H Sales (approximate 5,000 bbl/d production rate) 40.0 Operating Expense (8.0) Net Proceeds 32.0 Capital and Operating Budget H Drilling and Related Operations 4 - Garmian Kurdamir 35.0 Field Office and PSC-Related Expenditures 4.0 G&A, Business Development and Other 3.0 Total Budget Includes 100% of Garmian costs. Upon assignment of the outstanding Third Party Interest in the Garmian Block by the Kurdistan Regional Government, the new party will be required to repay to WesternZagros their share of costs related to the Garmian expenditures. Based on 2011 and H spending, this is estimated to be approximately $55 million. 9

10 Kurdamir and Garmian Blocks: Light Oil Prone Four discoveries at Kurdamir 1 and Kurdamir-2, Sarqala-1 and Mil Qasim-1 wells Proven light oil: desirable for domestic market and export blend 69% of Iraq s reserves are 27 API or heavier* Located south of the mountain front: less complex structures In the proven Oligocene Fairway On trend with the super giant and giant fields of the Kirkuk area Proximal to infrastructure * Source: WesternZagros confidential files 10

11 Near Term Production Potential of our Blocks Garmian Block Sarqala-1: Sarqala-2: Hasira-1: Kurdamir Block 5,000 10,000 bbl/d 5,000 15,000 bbl/d 5,000 15,000 bbl/d Kurdamir-2: 4,000+ bbl/d (one zone only) 11

12 Production Sharing Contract (PSC): Fair and Balanced Terms Oil Case When 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. * WesternZagros funds the KRG costs, ultimately to be recovered by WesternZagros through KRG s share of Cost Recovery Oil. For the Garmian Block only, the current PSC requires that the third party participant will be required to pay for half of the KRG s carried share. This will be confirmed once the TPPI is assigned. ** WesternZagros initially funds the 40% of the costs for the third party participant until the TPPI is assigned by the KRG. The amounts funded by WesternZagros for the TPPI will be repaid upon assignment of this interest. *** KRG is entitled to a 3% capacity building bonus of WesternZagros profit oil for a net effective share of 38.8%. Gas Case When 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. 12

13 Top Quartile PSC Effective Profit Oil Entitlement 40% 35% Effective Contractor Profit Oil % Allocations Based on R-Factors (1) $200mm upon Entry $280mm due June 30 '12 30% 25% 20% $140mm upon Entry $65mm upon Entry 15% 10% 5% Pre-Iraqi Constitution PSC 1. Repsol and Norbest maximum profit oil rate is 32% and 23.8% until such time the R-Factor is greater than 1 2. Not adjusted for individual contractor working interest Source: The profit oil terms have been assessed from enacted copies of the production sharing agreements published by the Kurdistan Regional Government on their website as of September 20th,

14 Kurdamir Block: Major Oil Discovery in Oligocene Light oil column with large gas cap discovered in the Oligocene reservoir at Kurdamir-1 in metres of gross, light oil pay confirmed in Kurdamir-2 in 2012 Maximum extent of oil leg unknown Co-venturer, Talisman (Block K44) B.V. is operator of Kurdamir-2 Oil Sample from Kurdamir-2: March

15 Kurdamir: Major Oil Discovery in Oligocene Kurdamir-1: Test flowed at 27.5 MMcf/d of gas and 1,172 bbls/d of 61 degree API natural gas liquids Kurdamir-2: Test flowed at rate of 7.3 MMcf/d of gas and 950 bbl/d without stimulation Initial drill stem test conducted at a depth of 2,477 metres, across 55 metres of the Oligocene porous zone Tested degree API oil Test was conducted across the gas-oil contact at 2,444 metres: tested 22 metres gas pay over 33 metres oil pay Well log data indicates 118 metres of gross oil pay beneath 22 metres of gross gas pay No water encountered within the Oligocene interval Maximum extent of oil leg unknown 140 metres thick porous zone between 2,422 and 2,562 metres, all of which is hydrocarbon bearing (majority oil) 15

16 Kurdamir-Topkhana Structure Share a Common Oil Leg Kurdamir structure extends off the Block and is a giant oil field (>500 million barrels) in the Oligocene reservoir Mean estimate of contingent Oligocene resources: 147 MMbbls of oil* Mean estimate of prospective Oligocene and Eocene resources: 1,609 MMbbls of oil on Kurdamir Block alone* * See Slides 38 through 45 inclusive, for data 16

17 Kurdamir-Topkhana Structure: The Potential Oligocene Reward Oligocene Contingent Resources* (Oil and Condensate in MMbbls and Gas in BCF) P 90 P 50 P 10 Mean Oil Gas , Condensate Oligocene Prospective Resources* (MMbbls) P 90 P 50 P 10 Mean Oil ,208 1,150 Confirmed oil column in the Oligocene reservoir, testing light oil with major upside Results of Kurdamir- 2 have increased known hydrocarbon column proven in the Oligocene to at least 420 metres No oil-water contact encountered in Kurdamir-2 meaning the maximum thickness of the oil column is not yet known Bottom of the known oil column extends down to at least 2,562 metres, significantly deeper than the limit of closure on the Kurdamir structure as mapped from seismic data Oligocene reservoir is involved in a larger trap and Kurdamir and Topkhana share a common oil leg Independently audited by Sproule International Limited - see Annual Information Form dated March 26, 2012 and Material Change Report dated April 23, 2012 for data 17

18 Kurdamir-Topkhana Structure: The Potential Eocene Reward Second reservoir penetrated in the Kurdamir-2 well Encountered oil bearing, fractured Eocene reservoir section with gross thickness of 275 metres Latest resource estimate more than doubles oil resource potential Lowest known oil in Kurdamir- 2 extends significantly deeper than the limit of four-way closure No formation water encountered while drilling Eocene Prospective Resources* (MMbbls) P 90 P 50 P 10 Mean Oil Independently audited by Sproule International Limited - see Material Change Report dated June 6, 2012 for data 18

19 Kurdamir: Long Potential Oligocene and Eocene Oil Legs Kurdamir structure extends off the Block and is a giant oil field (>500 million barrels) in the Oligocene reservoir Mean estimate of contingent Oligocene resources: 147 MMbbls of oil* Mean estimate of prospective Oligocene and Eocene resources: 1,609 MMbbls of oil on Kurdamir Block alone * Independently audited by Sproule International Limited - see Annual Information Form dated March 26, 2012 and Material Change Reports dated April 23, 2012 and June 6, 2012 for data 19

20 Kurdamir-Topkhana Structure: The Potential Cretaceous Reward Statistically, one of the most common oil bearing zones in Kurdistan Regional test rates: 300 bbl/d to 13,000 bbl/d; mean of 4,000 bbl/d 1 Interpreted to extend off the Kurdamir Block onto adjacent blocks, though not as extensive as in the Oligocene or Eocene levels Cretaceous Prospective Resources 2 (MMbbls) P 90 P 50 P 10 Mean Oil Source: Sproule International Limited Report for WZR, Evaluation of Initial Oil Production Rates in Exploratory Wells in Northern Iraq, April 5, Independently audited by Sproule International Limited - see Annual Information Form dated March 26, 2012 for data 20

21 Kurdamir Structure: Major Discovery in Oligocene Well testing at Kurdamir-2: March 2012 Composite Seismic Section (SW to NE) of Kurdamir-1 and Kurdamir-2 locations Next Steps: Cretaceous reservoir at Kurdamir-2 to be drilled by June 30, 2012 Examining options with co-venturer for additional cased hole testing in July, 2012 of Oligocene and Eocene oil pays after PSC commitments met. Planning a 3D seismic program, extended well test, and a further appraisal well 21

22 Qulijan & Baran (Garmian Block): Step Out Exploration Near Kurdamir Seismic mapping and confirmation of the oil column in the Oligocene reservoir at Kurdamir-indicate large prospects at Qulijan and Baran Well site is prepared and drill ready on Qulijan 22

23 Qulijan & Baran (Garmian Block): Step Out Exploration Near Kurdamir Prospective oil zones in Qulijan and Baran are approximately the same depth as in the Kurdamir structure Potential for Baran to be a separate compartment of the Kurdamir Discovery 23

24 Near Term Plans on the Garmian Block Mil Qasim-1 Well Tested light oil in the Upper Fars Formation approximately 800 metres of gross hydrocarbon bearing intervals Conducting analysis of additional well test from the Test 4 interval Hasira-1 Well Exploration well targeting the Oligocene. Also appraisal well of the Jeribe reservoir Second exploration well to comply with PSC obligations under the Second Exploration Sub Period Anticipated spud date in first quarter of 2013 Sarqala-2 Well First appraisal well following Sarqala-1 discovery Mil Qasim Well Sarqala-1 Well Location Hasira-1 Well Location Anticipated spud date in first quarter of

25 Mil Qasim and Sarqala Structures Sarqala-1 Well Contingent oil resources in the Jeribe reservoir are: P 90 - P 50 -P 10 MMbbls : * Prospective oil resources in the Jeribe reservoir are: P 90 - P 50 -P 10 MMbbls : * Sarqala-2 Well Appraisal well to delineate the Upper Fars and complete for production in the Jeribe reservoir Distance of 3 kilometres away from Sarqala-1 Mil Qasim-1 Well Flowed light light oil in the low permeability sandstone reservoirs and natural fractures from the Upper Fars reservoir * Independently audited by Sproule International Limited - see Slides 38 through 45, inclusive, for data Upside (prospective oil resources) in the Upper Fars reservoir is:p 90 - P 50 -P 10 MMbbls : * Evaluating test results of Upper Fars testing Hasira-1 Well Exploration commitment well to evaluate the Oligocene and Upper Fars, and appraise the Jeribe reservoir in the Sarqala structure Distance of 3 kilometres away from Sarqala-1 25

26 Mil Qasim-1: Well Results & Plans Flowed light, API oil from Upper Fars sandstones Identified approximately 800 metres of gross hydrocarbon bearing interval reservoir with four intervals tested Investigating stimulation and alternate drilling techniques to increase flow rates and unlock considerable potential of the low permeability, naturally fractured sandstones of the Upper Fars Formation. Total depth of 2,425 metres reached in December 2011 Composite Seismic Section (SW to NE) of Mil Qasim-1 and Sarqala-1 locations 26

27 Sarqala and Mil Qasim Structures Sarqala-1 drilled gross oil interval of 2,335 metres No gas cap or water leg encountered in Sarqala-1 Sarqala-2 (appraisal well of the Jeribe reservoir) and Hasira-1 (appraisal of the Jeribe reservoir and exploration well of the Oligocene reservoir)planned to be drilled in Q Investigating shallow, multi-well drilling program to evaluate the Upper Bakhtiari Formation at a depth of approximately metres. 27

28 Increasing Transportation and Market Options Existing oil pipelines: Kirkuk-Ceyhan System Kirkuk-Basra Baniyas-Syria System Kor Mor to Erbil (gas only) Planned oil pipelines: Kurdistan and Turkey 400,000 bbl/d pipeline from Taq Taq oil field to Khurmala under construction; target completion October million bbl/d pipeline from Khurmala to Fishkabour; target completion August 2013 * Source: The Oil & Gas Year: Kurdistan Region and Ashti Hawrami Speech at CERAWEEK (March 8, 2012), Houston, TX Additional 1 million bbl/d pipeline from the Iraq-Turkey border to Ceyhan; target completion January 2014 Planned gas pipelines: Extend existing gas pipeline, currently Kor Mor to Erbil, to Dohuk and the Turkish border 28

29 Corporate Social Responsibility Long-term benefits for the local community: health, water, education and recreation Strong focus on health, safety and security 29

30 Making a Difference Where We Operate We: Participate in the United Nations Global Compact with adherence to the Ten Principles Work with key stakeholders in our area of operations Aim to establish sustainable longterm benefits for the local community Target the health, water, education and recreation sectors Believe in creating a positive impact in the local community and improving quality of life Consult with communities and liaise with other operators, NGOs and KRG institutions to determine our CSR activities Hire local personnel wherever possible Corporate Social Responsibility Investment Priorities 30

31 WesternZagros: Next Steps Kurdamir Discovery: deeper drilling and evaluating beneath major Oligocene Discovery (Eocene and Cretaceous targets) extensive testing of potentially all three reservoirs (July 2012) extended well test of potentially any of the three reservoirs 3D seismic program Kurdamir-3 appraisal well Sarqala Discovery: Submit development plan towards declaration of commerciality 3D seismic program Sarqala-2 appraisal and production well Hasira-1 exploration commitment well to evaluate the Oligocene and Upper Fars, and appraise the Jeribe reservoir in the Sarqala structure Mil Qasim Discovery: analysis of additional well testing of Upper Fars reservoir evaluating Upper Bakhtiari reservoir shallow drilling exploration program * Independently audited by Sproule International Limited - see Slides 38 through 45, inclusive, for data 31

32 WesternZagros: Delivering on Major Oil Discoveries Achieved 171 MMbbls of oil, or 415 MMBOE, mean contingent resources, including major oil leg at Kurdamir Considerable increase in mean prospective resources to 3.3 Bbbls, or 4.9 billion BOEs 60% of Prospective Resources are extensions of existing discoveries Continue to attract entrepreneurial energy to Company Experienced and seasoned team and Board Excellent HSE record 100% drilling success ratio Contingent Resources 171 MMbbl 415 MMBOE Prospective Resources (related to Discoveries) 2,039 MMbbl 2,703 MMBOE Prospective Resources (undrilled) 1,302 MMbbl 2,274 MMBOE 32

33 Additional Information WesternZagros management, KRG representative and site personnel celebrating commencement of production for the Sarqala-1 extended well test October,

34 Experienced Management & Strong Technical Team Simon Hatfield, CEO Proven 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, Chauvco Resources and Talisman. Extensive experience in Iraq since Greg Stevenson, CFO Chartered Accountant with over 15 years of experience working with a major accounting firm as well as with large public companies in the oil and gas industry. Previously Controller of Western Oil Sands. Responsible for leading the financial and accounting team. Tony Kraljic, Vice President, Business Development Chartered Accountant with over 14 years experience as VP Finance, CEDA Int. Corp., Manager of Finance & Accounting and Manager of Taxation at Marathon/Western Oil Sands, Senior Tax Planner and Financial Analyst at Shell, and Tax Manager at Arthur Andersen LLP. Responsible for strategic planning, joint venture relations, investor relations and business development. Ian McIntosh, Vice President, Kurdistan Business Unit Over 35 years of international oil and gas experience in development and production engineering, in-country management and business growth in challenging environments. Previous executive and managerial positions with Petro-Canada in Libya, Algeria and Tunisia, Adams Pearson Associates, and Ranger Oil. Responsible for leading all Kurdistan business operations, including production operations. 34

35 Experienced Management & Strong Technical Team Mike Tinkler, Vice President, Exploration and Reservoir Development Over 30 years of international oil and gas experience in management positions for projects with Husky in China and Indonesia, and with Hunt Oil for projects in the Middle East, United Kingdom and Canada. Responsible for all geotechnical work. Michael Mossman, Vice President Operations 35 year career spent with BP in locations throughout Europe, Latin America, The Middle East and North Africa in executive and managerial positions. Responsible for all drilling operations. Dr. George Pinckney, Executive Advisor, Corporate Projects Majority of 36 year career spent with Mobil Oil and ExxonMobil in locations throughout Canada, USA and Southeast Asia, demonstrating extensive international experience. Dave Reeve, General Manager, Petroleum Engineering Over 30 years experience in consulting and staff position in production and reservoir engineering and operations of projects in China, Iran, Australia, Indonesia and domestic. 35

36 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 David Cook Over 30 years of international experience in the oil and gas sector in technical, managerial and executive positions with Amoco, BP, and TNK-BP. Prior to his current position of Executive Officer and Head of Upstream with TAQA, held the position of Vice President for BP Russia. Holds a Bachelor of Science degree in Geophysics and a PhD in Geological Sciences from Michigan State 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 36

37 Board of Directors: Disciplined, Independent, Experienced Simon Hatfield Proven track record of success with over 35 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 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 , 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 , prior to holding senior financial positions with the firm from 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 and Director of Barrett Resources, Director, President and COO of Plains Petroleum, 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 37

38 Kurdamir Block Contingent and Prospective Resources Table 1(a) Gross Unrisked Contingent (1), (2) Resources Kurdamir Block Oil, Gas and Condensate As of Apr 20, 2012 Table 1(b) Gross Unrisked Prospective (1), (3) Resources Kurdamir Block Oil, Gas and Condensate As of May 31, 2012 (5) Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Kurdamir Type MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf MMbbl/Bcf Tertiary Oligocene Oil Solution Gas Associated Gas (4) , Condensate Kurdamir Total Mean MMBOE (14) - Gross Unrisked Contingent Resources 384 Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Kurdamir Kurdamir Type MMbbl MMbbl MMbbl MMbbl Tertiary Oligocene Oil ,208 1,150 MMBOE (14) 402 1,222 2,667 1,413 Tertiary Eocene Oil MMBOE Kurdamir Cretaceous Oil MMBOE Kurdamir Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 1,609 Kurdamir Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 2,090 Please refer to the Company s material change reports dated April 23, 2012 and June 6, 2012 and the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the contingent and prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Tables 1a and 1b 38

39 Garmian Block Contingent and Prospective Resources: Sarqala Table 2(a) Gross Unrisked Contingent (1), (2) Resources Garmian Block Oil, Gas and Condensate As of Sept Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Sarqala Jeribe / Upper Dhiban Type MMbbl MMbbl MMbbl MMbbl Oil MMBOE (14) Jeribe/Upper Dhiban Total Mean Oil Only - Gross Unrisked Contingent Resources 24 Jeribe/Upper Dhiban Total Mean MMBOE Gross Unrisked Contingent Resources 31 Table 2(b) Gross Unrisked Prospective (1), (3) Resources Garmian Block Oil, Gas and Condensate As of Sept 7, 2011 Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Sarqala Sarqala Structure Below Lowest Known Oil Jeribe/Upper Dhiban Potential Extension Southwest Flank Jeribe/Upper Dhiban Type MMbbl MMbbl MMbbl MMbbl Oil MMBOE (14) Oil MMBOE Jeribe/Upper Dhiban Total Mean Oil Only - Gross Unrisked Prospective Resources 198 Jeribe/Upper Dhiban Total Mean MMBOE - Gross Unrisked Prospective Resources 250 Please refer to the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the contingent and prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Table 2a, 2b and 2c Table 2(c) Gross Unrisked Prospective (1), (3) Resources Garmian Block Oil, Gas and Condensate As of Sept 7, 2011 (5) Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Sarqala Jeribe / Upper Dhiban Type MMbbl MMbbl MMbbl MMbbl Oil MMBOE (14) Sarqala (13) Oligocene Oil MMBOE Sarqala (13) Eocene Oil MMBOE Sarqala (13) Cretaceous Oil MMBOE Jeribe/Upper Dhiban Total Mean Oil Only - Gross Unrisked Prospective Resources 296 Jeribe/Upper Dhiban Total Mean MMBOE - Gross Unrisked Prospective Resources

40 Garmian Block Prospective Resources: Mil Qasim, Baran and Qulijan Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect Reservoir Hydrocarbon P90 P50 P10 Mean Type MMbbl MMbbl MMbbl MMbbl Mil Qasim Upper Fars Oil Table 3 Gross Unrisked Prospective (1), (3) Resources Garmian Block Oil, Gas & Condensate Mil Qasim Prospect as of May 30, 2012, Baran, and Qulijan Prospects As of Jan 31, 2011 (5) MMBOE (14) Upper Bakhtiari Oil MMBOE (14) Mil Qasim Sub Total Mean Oil Only Gross Unrisked Prospective Resources 127 Mil Qasim Sub Total Mean MMBOE Gross Unrisked Prospective Resources 143 Baran (10,12) Oligocene Oil MMBOE Baran (10,12) Eocene Oil MMBOE (14) Baran Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 116 Baran Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 292 Qulijan (10,11) Oligocene Oil MMBOE (14) Qulijan (10,11) Eocene Oil MMBOE Qulijan (10,11) Cretaceous Oil MMBOE Qulijan Sub Total Mean Oil Only - Gross Unrisked Prospective Resources 86 Qulijan Sub Total Mean MMBOE - Gross Unrisked Prospective Resources 183 Please refer to the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the contingent and prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Table 3 40

41 Garmian Block Prospective Resources: Additional Plays and Prospects Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Table 4(a) Gross Unrisked Prospective Resources (1), (3) Garmian Block Oil, Gas and Condensate Pickuk As of May 30, 2012 and Bawanoor, Zardi, and Upper Fars Prospects As of July 19, 2011 Prospect / Play Reservoir Hydrocarbon P90 P50 P10 Mean Type MMbbl MMbbl MMbbl MMbbl Pichuk Upper Bakhtiari Oil MMBOE (14) Pichuk Total Mean Oil Only Gross Unrisked Prospective Resources 7 Pichuk Total Mean MMBOE - Gross Unrisked Prospective Resources 7 Upper Fars Fault Trap Play Upper Fars Oil , MMBOE , Upper Fars Fault Trap Play Total Mean Oil Only Gross Unrisked Prospective Resources 705 Upper Fars Fault Trap Play Total Mean MMBOE - Gross Unrisked Prospective Resources 798 Upper Fars Bawanoor Saddle Play Upper Fars Oil MMBOE Upper Fars Bawanoor Saddle Play Total Mean Oil Only Gross Unrisked Prospective Resources 120 Upper Fars Bawanoor Saddle Play Total Mean MMBOE - Gross Unrisked Prospective Resources 282 Zardi Jeribe Oil MMBOE Mio-Oligocene Oil MMBOE Eocene Oil MMBOE Zardi Total Mean Oil Only Gross Unrisked Prospective Resources 127 Zardi Total Mean MMBOE - Gross Unrisked Prospective Resources 342 Please refer to the Sproule letter dated May 30, 2012 and the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Table 4a 41

42 Kurdamir and Garmian Blocks: Contingent and Prospective Resources Table 4(b) Gross Unrisked Prospective Resources (1), (3) Garmian Block Oil, Gas and Condensate Segrdan, Chwar, Alyan and Tilako Prospects As of July 19, 2011 Low Estimate (6) Best Estimate (7) High Estimate (8) Mean Estimate (9) Prospect / Play Reservoir Hydrocarbon P90 P50 P10 Mean Type MMbbl MMbbl MMbbl MMbbl Segrdan Jeribe Oil MMBOE Mio-Oligocene Oil MMBOE Eocene Oil MMBOE Segrdan Total Mean Oil Only Gross Unrisked Prospective Resources 93 Segrdan Total Mean MMBOE - Gross Unrisked Prospective Resources 285 Chwar Jeribe Oil MMBOE Mio-Oligocene Oil MMBOE Eocene Oil MMBOE Chwar Total Mean Oil Only Gross Unrisked Prospective Resources 25 Chwar Total Mean MMBOE - Gross Unrisked Prospective Resources 36 Alyan Mio-Oligocene Oil MMBOE Eocene Oil MMBOE Shiranish Oil MMBOE Alyan Total Mean Oil Only Gross Unrisked Prospective Resources 17 Alyan Total Mean MMBOE - Gross Unrisked Prospective Resources 34 Tilako Jeribe Oil MMBOE Mio-Oligocene Oil MMBOE Eocene Oil MMBOE Please refer to the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Table 4b Tilako Total Mean Oil Only Gross Unrisked Prospective Resources 13 Tilako Total Mean MMBOE - Gross Unrisked Prospective Resources 22 42

43 Kurdamir and Garmian Blocks: Contingent and Prospective Resources Tables 1(a) and 2(a) Gross Unrisked Contingent Resources (1),(2) Kurdamir and Garmian Blocks Oil, Gas and Condensate Tables 1(b),2 (b), 2(c), 3and 4(a) and 4(b) Gross Unrisked Prospective Resources (1),(3) Kurdamir and Garmian Blocks Oil, Gas and Condensate Kurdamir Block Play / Prospect Mean Estimate (9) Oil Only MMbbl Mean Estimate (9) MMBOE (14) MMbbl Kurdamir Garmian Block Sarqala Total Contingent Mean Estimate Kurdamir Block Play / Prospect Mean Estimate (9) Oil Only MMbbl Mean Estimate (9) MMBOE (14) MMbbl Kurdamir 1,609 2,090 Garmian Block Pichuk 7 7 Upper Fars Fault Trap Play Upper Fars Bawanoor Saddle Play Zardi Complex (Zardi, Sergdan, Tilako) Chwar Alyan Mil Qasim (Upper Fars, Upper Bakhtiari) Sarqala Baran Qulijan Sub Total Kurdamir Block 1,609 2,090 Sub Total Garmian Block 1,732 2,887 Total Prospective Mean Estimate 3,341 4,977 Please refer to the Company s material change reportd dated April 23, 2012 and June 6, 2012, and the Company s Annual Information Form dated March 26, 2012 for further disclosure and explanation of the contingent and prospective resources and slides 44 and 45 for footnotes 1-14 referenced in Tables 1, 2, 3, 4 and 5. 43

44 Kurdamir and Garmian Blocks Prospective and Contingent Resources Footnotes Notes to Tables 1, 2, 3,4 and 5: 1. The resources presented are the gross volumes estimated for the indicated reservoirs without any adjustments for the Corporation s working interest or encumbrances. For a description of the production sharing terms under the PSCs, see the Company s Annual Information Form dated March 26, 2012 under the heading PSC Overview and Commitments Revenue. 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. There are several non-technical contingencies that prevent the classification of the contingent resources as reserves. WesternZagros s drilling program on the PSC Lands is still at an early evaluation stage and as such, additional information to be obtained by further exploration and appraisal drilling and testing will be required to finalize development plans, including permanent oil production facilities which utilize the associated natural gas from such production and are acceptable to the KRG, and to ultimately determine the economic viability of developing any of the contingent resources. In addition, no federal Iraq legislation has been agreed to or enacted to address the future organization of Iraq's petroleum industry or the sharing of petroleum and other revenues within Iraq. Failure to enact legislation (or the enactment of federal legislation contradictory to the Oil and Gas Law of the Kurdistan Region - Iraq (the "Kurdistan Petroleum Law")) could materially adversely impact WesternZagros s interest in the PSCs and the commercial feasibility of developing the resources. With respect to discovered gas resources, there is currently no developed market in Kurdistan and very limited infrastructure to enable companies to sell or export gas and therefore development may be challenging and take a significant amount of time. While it is premature at this time to identify the economic viability of any of the contingent resources since evaluations are currently incomplete and as such, the economic status of the contingent resources is currently undetermined, the Corporation is actively carrying out activities on the PSC Lands in order to enable it to complete the necessary economic assessment(s). In particular, the Corporation is currently assessing the economics of the Sarqala prospect on the Garmian Block through the ongoing extended well test at the Sarqala-1 well and related local sales, as well as evaluating permanent oil production facilities at Sarqala which utilize any associated natural gas from such production in a manner acceptable to the KRG. Engineering work and discussions with the KRG are underway in this regard and the Corporation expects to complete this evaluation during the second half of 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. These estimates have not been risked for the chance of discovery or for the chance of development. 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. 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. Other than for Table 1(b), the estimates for the Tertiary Oligocene and Cretaceous reservoirs at Kurdamir which are as at April 20, 2012 and January 14, 2011, respectively, ; for Table 2(c) the estimates for the Oligocene, Eocene and Cretaceous reservoirs at Sarqala which are as at January 31, 2011; for Table 3 the estimates for Mil Qasim which are as at January 14,

45 Kurdamir and Garmian Blocks Prospective and Contingent Resources Footnotes (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 act ually 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 quan tity 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 reco vered 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 a nd 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 (prior to the re - entry). (11) The Qulijan Oligocene, Eocene and Cret aceous 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 (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. 45

46 The WesternZagros Story: Steady Progress One of the first four operators in the Kurdistan Region: Large hand-picked exploration block Over 1,500 km 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 Drilled Kurdamir-1 (Kurdamir Block) to Cretaceous Discovered oil in the world class Oligocene reservoir Discovered a large gas cap with oil legwith high condensate yield Numerous deeper oil and gas shows Updated resource assessment Sproule audit of prospective resources supports over 1.75 billion BOEs incl. 1 billion barrels of oil Drilled Sarqala-1 Sidetrack (Garmian Block) to Jeribe Discovered oil in the Jeribe Formation PSC amendments Concluded PSC amendments 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 Updated resource assessment Sproule audit confirms first contingent resources of 24 million barrels of oil at Sarqala; total PSC Lands prospective resources increases to over 3.6 billion BOEs (mean estimate) including 2.9 billion barrels of oil Secured strategic investment with TAQA Secured C$46.6 million strategic investment with TAQA on October 17, 2011 Spudded Kurdamir-2 Well on October 25, 2011 Sarqala-1 extended well test on October 18, 2011 and payment received for first lifting on October 27, 2011 Achieved daily production of over 5,000 barrels Drilled Mil Qasim-1 (Garmian Block) to Upper Fars reservoir Discovered oil in the Upper Fars Formation Drilled Kurdamir-2 through Oligocene and Eocene reservoirs Discovered giant oil column in the Oligocene reservoir Sproule audit confirms contingent resources of 147 million barrels of oil at Kurdamir-2; total PSC Lands prospective resources, including updated Oligocene and Eocene resource estimates increases to over 4.9 billion BOEs (mean estimate) including 3.3 billion barrels of oil 46

47 Political Environment October 2005 Iraqi constitution adopted February 2007 Draft Federal Petroleum Law June 2007 Agreement on initial revenue sharing 17% of net oil revenues from all regions in Iraq go to Kurdistan August 2007 KRG Petroleum Law approved March 2010 Iraq holds its first fully-supported democratic election December 2010 Iraq President, Prime Minister and cabinet appointed 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) June & September 2011 Kurdistan producers receive first two payments for oil exports from Federal Ministry of Finance December 2011 USA troops withdraw from Iraq March 2012 Nerchirvan Barzani is appointed as Kurdistan Prime Minister of Kurdistan April 2012 KRG cease oil exports April 1 due to a dispute with the Federal Government 47

48 Hydrocarbon Habitat of Surrounding Discoveries 2,335 metres gross oil interval 1900 metres gross hydrocarbon interval 800 metres gross oil interval 1200 metres gross hydrocarbon interval 1800 metres gross hydrocarbon interval 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. 48

49 Kurdamir and Garmian Blocks Oil Prone Kurdamir -1 Well Discovery Natural oil seep Analysis of actual oils and condensate recovered confirms Aaliji source rock (Analysis conducted by Weatherford Labs) Aaliji Source Rock Maturity Map Burial history modeling confirms Aaliji source is currently generating oil (Map modified from proprietary Fugro Robertson Study, 2010) Hydrocarbon samples from Sarqala and Kurdamir wells and surface seeps 49

50 The Region s Oil and Gas Fields 50

51 Bai Hassan: Analogue for Kurdamir-Topkhana Structure Bai Hassan Bai Hassan: a proven oil field, has a similar structure to Kurdamir- Topkhana 2.2 billion barrels of oil discovered in 1953 Discovery well drilled on crest and encountered gas cap; oil established by first appraisal well 51

52 The Region s Operators Source: KRG and WesternZagros Over 40 international oil companies with PSCs in Kurdistan Block Operator A Garmian WesternZagros B Kurdamir Talisman C Ain Sifni / K8 Hunt D Akre-Bijeel MOL / Kalegran E Al Qush/Baeshiqa/Pirmam/Betwata/Qara-Hanjeer/ #6 Exxon F Atrush Gen. Expl. Partners G Bazian / Sangaw South / Qush Tappa KNOC H Bina Bawi / Shorish / Mala Omar OMV I Chia Surkh / Ber Bahr Genel J Tawke / Erbil / Dohuk DNO K Hawler Oryx L Topkhana / Baranan Talisman M Taza Oilsearch N KorMor / Chemchamal Dana Gas (Pearl Petroleum) O Harir / Safeen Marathon P Miran Heritage Q Central Dohuk Murphy R Khalakan Gas Plus S Qarah Dagh Niko T Sangaw North Sterling U Sarsang Hillwood / HKN/Maersk V Sarta / Rovi Reliance W Shaikan / Sheikh Adi Gulf Keystone X Dinarta / Shakrok Hess Y Sindi-Amedi Perenco Z Taq Taq TTOPCO AA Barda Rash Afren BB Qala Dze / Piramigrun Repsol 52

53 Growing Interest in Kurdistan Kurdistan under-explored relative to the rest of Iraq Quality of services increasing Security situation has improved Major oil companies, such as Exxon, acquiring oil and gas blocks in the region 53