WesternZagros Resources Ltd. has received payment for its first sale of crude oil to the domestic market in the Kurdistan Region of Iraq. First oil production from the Sarqala-1 extended well test was achieved on October 18, 2011, and first lifting occurred by truck today.

"Production start-up marks a new chapter in the Company's history, as WesternZagros takes its first steps to become an exploration and production company, rather than a pure exploration company," said Simon Hatfield, Chief Executive Officer of WesternZagros. "We are appreciative of the process established by the Kurdistan Regional Government's Ministry of Natural Resources, which requires pre-payment directly to WesternZagros for the contracted volumes. We also appreciate the close coordination with the Ministry in starting the test. Thanks to the diligence of our in-country operations personnel, the start-up was conducted in a safe, responsible manner and ahead of schedule."

Production started at approximately 2,000 barrels of oil per day ("BOPD") and is anticipated to increase towards 5,000 BOPD in the near future. WesternZagros has signed an initial sales contract for delivery of approximately 33,500 barrels of oil priced in the range of US$50 to US$60 per barrel. WesternZagros plans to use the information gathered from the extended well test in determining future appraisal and development activities, including the potential for increasing production beyond 5,000 BOPD. Horizontal completions may be considered to take advantage of the demonstrated high deliverability of the Jeribe reservoir.

Mil Qasim-1 Exploration Well Update

WesternZagros has successfully set 13-5/8"casing at 1,615 metres at Mil Qasim-1, the Company's third exploration well. The rig is currently drilling ahead at 1,800 metres in the targeted Upper Fars Reservoir. Following a delayed spud date, drilling is now proceeding on time and on budget. The mean estimate of the gross unrisked prospective resources for this reservoir is 106 million barrels of oil. Further updates will be provided as operations progress. WesternZagros is the operator of the Mil Qasim-1 well.

Kurdamir-2 Exploration Well Update

WesternZagros reports that the Kurdamir-2 exploration well has spudded on October 25, and is anticipated to be completed by June 2012. The well is being drilled on the flank of the Kurdamir structure approximately two kilometres from the Kurdamir-1 discovery well. The combined mean estimate of the gross unrisked prospective resources for the Oligocene, Eocene and Cretaceous reservoirs being targeted by the Kurdamir-2 well is over 585 million barrels of oil. Talisman (Block K44) B.V. ("Talisman")is the operator of the Kurdamir-2 well.

HSE Milestone

On today's date, WesternZagros's operations celebrate having worked one full year without a lost time incident. The dedication to safety demonstrated by all of the Company's employees and contractors has produced a work safety culture ranked as world class.

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