WesternZagros Resources Ltd. has successfully and safely secured the Kurdamir-1 well, following the loss of well control reported on May 15, 2010. The risk of the damaged drill pipe failing and releasing hydrocarbons or hydrogen sulphide (H2S) at the surface has been eliminated.

Specialists from Boots & Coots International Well Control Inc. together with personnel from WesternZagros and Talisman (Block K44) B.V. carried out this critical well control operation. The next phase is to install a snubbing unit, which is a hydraulic workover rig that enables well intervention to be safely performed while the well is under pressure. The objective is to recover the remaining drill string from the well and complete well kill operations. If these efforts are successful, logging and casing of the section drilled to date can then proceed.

WesternZagros continues to support the local residents who remain evacuated as a precaution. Human safety remains the top priority for operations at Kurdamir-1, and there have been no injuries or hydrocarbon releases from the incident to date.

WesternZagros expects the well control activities to take at least another 15 days. If these efforts continue to be successful and the hole section can be cased, the Company intends to resume drilling and testing the well as originally planned.

The Company is currently pursuing a claim under its insurance coverage for the well control activities. The policy has a total claim limit of $75 million gross. As of May 24, 2010, WesternZagros and its partners had incurred in excess of $25 million gross for well control and sidetracking activity. WesternZagros has now received confirmation of coverage from the lead insurer, as well as approval for the first interim payment of $5.7 million. The Company continues to pursue approvals from the other insurers.

Kurdamir-1 is a wildcat exploration well, located on the Kalar Bawanoor Block, in the Kurdistan Region of Iraq. WesternZagros is drilling the well with its co-venturers, the Kurdistan Regional Government (KRG) and Talisman (Block K44) B.V. Further operational updates will be provided as well control and drilling activities progress.

Tags: WesternZagros Resources Ltd.