ERBIL, Kurdistan Region — WesternZagros with oil operations in the Kurdistan Region announced it has agreed to sell all its common shares to Crest Energy International for $225 million (CAD) in the face of "immediate financing requirements."
"Crest AcquireCo will provide the Company with the funds necessary in order for the Corporation to acquire all of the outstanding common shares," WesternZagros Resources Limited announced in a statement on Friday.
"[It will] result in Crest AcquireCo owning 100 percent of the Company. The transaction is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta)," it added.
WesternZagros is an international natural resources company. Its shares trade in Canada.
"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," read the statement.
Crest Energy is an affiliate of Crest Investment Company based out of Houston, Texas.
Zagros cited a lack of market investment and low prices in energy commodities.
"We are pleased to present this transaction to our shareholders," said Simon Hatfield, CEO of WesternZagros. "We have been engaged in an extensive search for financing and strategic alternatives for 18 months, hampered by the challenging capital markets for oil and gas investments given the low commodity price environment.
"We are delighted to conclude this search with the receipt of a proposal that provides a strong premium to the current share price and a fair valuation given the future risks of developing our assets over the next several years."
Crest will also advance a $30 million (USD) short-term loan "to address the company's immediate financing requirements."
Zagros had operations in the Taq Taq oil field 85 kilometers southeast of Erbil.
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