WesternZagros Resources : Announces 2015 Fourth Quarter and Year End Results

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NEWS RELEASE

WesternZagros Announces 2015 Fourth Quarter and Year End Results

Updates Annual Reserves and Resources of Kurdamir and Garmian Blocks Calgary, Alberta - March 17, 2016 - WesternZagros Resources Ltd. (TSX-V: WZR) ("WesternZagros" or "the Company") announced today its operating and financial results for the fourth quarter and year ended December 31, 2015. All amounts set out in this press release are in US dollars unless otherwise stated.

Commenting on the year end and subsequent events, WesternZagros's Chief Executive Officer, Simon Hatfield said:

"In 2015, we were pleased to establish production on the Garmian Block and to welcome Repsol S.A. to the Kurdamir Block following their acquisition of Talisman. We continue to work with both our joint venture partners and the Kurdistan Regional Government in finalizing the field development plans for our Kurdamir and Garmian discoveries. We also continue our cost savings initiatives to strengthen our financial position during this period of uncertain market conditions.

On behalf of the Board and WesternZagros management, I want to express our appreciation to Fred Dyment, who held the position of Chairman from 2007 to 2015. We are very appreciative of his commitment, contributions and leadership over the past decade. Fred's considerable business experience, keen focus and high professional ethics have provided valuable guidance to the Company."

WesternZagros achieved several key financial and operational milestones during 2015 and to date, including:

• Production - Oil production in the Development Period from the Garmian Block commenced on February 11, 2015 as the co-venturers and the KRG continued to finalize the field development plan. Since that date, the Sarqala-1 well has averaged approximately 5,100 bbl/din 2015. Cumulative production for the year was approximately 1.7 MMbbl. Since inception of production during the first extended well test in 2011, Sarqala 1 has produced a cumulative amount of 2.7 MMbbl of light oil with no formation water and no hydrogen sulphide. Production is currently suspended pending direction from the KRG.

  
  

• Revenue - For the year ended December 31, 2015, revenue was $17.9 million, with an average realized price of

  $41.42/bbl and the field netback was $13.3 million.

  
  

• Reserves and Resources - The Company has received Sproule International Limited's ("Sproule") December 31, 2015 Evaluation of the P&NG Reserves and Audit of the Prospective Resources report for oil resources in the Sarqala Jeribe / Upper Dhiban reservoir on the Garmian Block; and Sproule's Audit of the Contingent and Prospective Resources for oil and gas in the Oligocene reservoir on the Kurdamir Block. As is the Company's historical practice, both reports were prepared as part of its regular updates. The Contingent and Prospective Resources reports were prepared for risked and unrisked volumes pursuant to the new Canadian Resources other than Reserves ("ROTR") disclosure requirements.

  
  

  The estimated 2P Reserves (Gross Block) for Garmian increased 16 percent to 13 million barrels of oil due to technical revisions following the production of 1.7 MMbbl of crude oil from the Sarqala-1 well in the year with

  no evidence of water. The Garmian Jeribe / Upper Dhiban unrisked Prospective Resources of oil, (Gross Block P50 estimate) increased by 8 percent to 66 MMbbl primarily due to technical revisions.

  
  

  There was no change to the Kurdamir Oligocene unrisked Contingent Resources of 366 MMbbl of oil, 1.8 Tcf of natural gas and 55 MMbbl of condensate or the unrisked Prospective Resource of 1 billion barrels of oil and 1 Tcf of natural gas (all Gross Block P50 estimates).

  
  

• Financing - Fully repaid the Cdn $100 million convertible notes which matured December 31, 2015, from available funds recognizing a total foreign exchange gain upon repayment of approximately $25 million since the debt was first incurred in 2013. At the end of 2015, the Company had $48.4 million in cash and cash equivalents and no outstanding debt. The Company reached an agreement with Crest in December 2015 to defer the first drawdown notice date under the first tranche of its US$200 million unsecured credit facility from the original date of January 1, 2016 to May 1, 2016. The Company commenced a review of all financing alternatives available in December 2015 including but not limited to, the completion of an alternative debt financing or equity financing, or the farm down or sale of some of the assets of the Company. As previously announced, the Company has retained TD Securities to act as its financial advisor.

  
  

• Cost Reduction Initiatives - In light of the significant decline in oil price and the current capital market conditions, the Company continued to focus on strict cost management. These efforts included: optimizing capital investments, reducing staff, renegotiating contracts with service suppliers, and cutting discretionary expenditures (e.g. not awarding any discretionary cash bonuses for 2015).

  
  

  Due primarily to current market conditions, the Company recognized total non-cash impairment charges during the last three quarters of 2015 in relation to the Garmian Block of $11.7 million in relation to property, plant and equipment, and $209.6 million in relation to exploration and evaluation expenditures.

  
  

• Development Plans - WesternZagros and its co-venturers on the Kurdamir and Garmian blocks continue to work with the KRG in finalizing the respective field development plans.

  
  

• Operatorship - Repsol S.A., through its subsidiary Talisman (Block K44) B.V. ("Repsol"), assumed operatorship of the Kurdamir Block following its acquisition of Talisman Energy Inc. in May 2015. Repsol has revitalized its efforts with a fully staffed, multidisciplinary team of over fifty people working on the project.

  
  

  Pursuant to the terms of the Garmian PSC, operatorship of the Garmian Block transitioned from WesternZagros to Gazprom Neft Middle East B.V. effective February 29, 2016.

  
  

• Corporate - The Board of Directors of the Company transitioned the role of Chairman of the Board from Mr. Fred Dyment to Mr. David Boone as of January 1, 2016.

Reserves and Resources Update

The table below summarizes the Company's Reserves, Contingent Resources and Prospective Resources for the Garmian and Kurdamir Blocks as evaluated and audited by Sproule.

WesternZagros Resources Ltd. Summary of Estimates of Reserves and Unrisked and Risked Contingent and Prospective Resources(1) Kurdamir and Garmian Blocks, Kurdistan Region of Iraq (As of December 31, 2015)

RESERVES
License	Resource		Gross Block Oil Reserves(2)	Company Gross(3) Oil Reserves	Company Net(4) Oil Reserves	NPV 10(6) US$million	NPV 15(6) US$million
			MMbbl	MMbbl	MMbbl
Garmian	Sarqala Field Jeribe / Upper Dhiban	1P(5) 2P(5) 3P(5)	2.0 13.0 26.5	0.8 5.1 10.6	0.5 3.4 7	4 33 153	4 25 120
CONTINGENT RESOURCES(7)
License	Resources		2C (Best Estimate)
			Gross Block	Gross Block	Company
			Unrisked	Risked	Gross(3) Risked
			Contingent	Contingent	Contingent
			Resources	Resource	Resources
Kurdamir	Oligocene
Oil (MMbbl)		366	311	124
Natural Gas Liquids (MMbbl)		55	46	19
Total Oil and Liquids		420	357	143
Solution Gas (MMcf)		380	323	129
Associated and Non
Associated Gas (MMcf)		1,414	1,201	481
Total Gas		1,794	1,524	610
Total MMBOE		719	611	244
PROSPECTIVE RESOURCES(8)
License	Resources (Classification)		P50 (Best Estimate)
			Gross Block	Gross Block	Company
			Unrisked	Risked	Gross(3) Risked
			Prospective	Prospective	Prospective
			Resources	Resources	Resources
Kurdamir	Oligocene
Oil (MMbbl)		1,004	481	192
Natural Gas Liquids (MMbbl)
Total Oil and Liquids		1,004	481	192
Solution Gas (MMcf)		1,033	495	198
Associated and Non
Associated Gas (MMcf)
Total Gas		1,033	495	198
Total MMBOE		1,176	564	225
Sarqala Field Jeribe / Upper Garmian Dhiban (below Reserves at "oil down to" elevation of -3501 mSS)
Oil (MMbbl)		66	53	21
Total Oil		66	53	21
Solution Gas (MMcf)		129	104	41
Total Gas		129	104	41
Total MMBOE		87	70	28

Notes:

1. Values may not add or be consistent from one presentation to the next due to rounding.

2. "Gross Block Oil Reserves" are the total remaining recoverable reserves associated with the acreage in which the Company has an interest.

3. "Company Gross" without any adjustment for the Company's working interest therein means the Company's 40% working interest (operating or non-operating) share before deduction of royalty petroleum, profit petroleum, production bonuses and capacity building support payments to the Kurdistan Regional Government pursuant to the provisions of the applicable PSC.

4. "Company Net" means the Company's cost and profit petroleum volume entitlements, pursuant to the provisions of the Garmian PSCs.

5. The classifications shown are Proved (1P), Proved plus Probable (2P) and Proved plus Probable plus Possible (3P). Possible Reserves are those additional Reserves that are less certain to be recovered than Probable Reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the 3P Reserves.

6. After-tax net present value of future net revenue associated therewith using forecast prices and costs and a10 percent and 15 percent discount rates. Reserves estimates used to calculate future net revenue are estimated based on the economically recoverable volumes within the development/exploitation period specified in the PSCs. The estimated net present values disclosed do not represent fair market value.

7. Contingent Resources are those quantities of petroleum, 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. There is no certainty as to the timing of such development or whether it will be commercially viable to produce any portion of the resources.

8. 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 and a chance of development. 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 discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources.

Fourth Quarter 2015 and Year End Results

WesternZagros has posted its operating and financial results for the fourth quarter and year ended December 31, 2015 on its website. The financial statements, the Management Discussion and Analysis, and the Annual Information Form are available at www.westernzagros.com and on SEDAR at www.sedar.com.

Outlook

In 2016, the Company anticipates the average daily productive capacity of Sarqala-1 will range from 4,500 bbl/d to 5,000 bbl/d. Assuming continuous production for the remaining nine months of 2016, and an average Brent price of

$35 to $45 per barrel, WesternZagros estimates 2016 revenues of $5 to $8 million.

WesternZagros will focus on strict cost management while securing KRG approval of the phased development plans for the Kurdamir and Garmian blocks. The Company has $48.4 million in cash and cash equivalents as at December 31, 2015 to advance the field development plans with its co-venturers and secure KRG approval. The Company estimates capital and operating expenditures of $35 to $45 for 2016 to operate the Sarqala production operations, advance the respective development plans on the Kurdamir and Garmian blocks with its co-venturers and for general and administrative costs for the Kurdistan joint venture offices and the WesternZagros headoffice.

As previously announced, the Company is reviewing all financing alternatives including but not limited to, the completion of an alternative debt financing or equity financing, or the farm down or sale of some of the assets of the Company to advance the developments. The Company will provide further guidance on the anticipated quantum and timing of capital expenditures for the respective Kurdamir and Garmian projects as the field development plans are finalized and approved. The Company has retained TD Securities to act as its financial advisor.

Liquidity and Capital Resources

As at December 31, 2015, WesternZagros had $48.4 million in cash and cash equivalents. The Company also has an undrawn $200 million debt facility under the Crest Loan Agreement which is available in two tranches and subject to certain conditions precedent to drawdown: Tranche 1 - $150 million available, with initial draw to be made by