Crest Energy buys out WesternZagros Resources for $164m

Under the agreement, Crest AcquireCo will own 100% of WesternZagros Resources by acquiring all of the outstanding common shares and preferred shares of WesternZagros for C$0.2 per share in cash.

WesternZagros and Crest AcquireCo have also signed a bridge loan agreement, under which Crest AcquireCo has advanced a $30m short-term loan to WesternZagros for its immediate financing requirements.

WesternZagros CEO Simon Hatfield said: "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."

WesternZagros chairman David Boone said the proposed arrangement has received unanimous support from the board of directors.

Crest already owns about 19.9% of the outstanding common shares of WesternZagros.

The completion of the transaction is subject to shareholder approvals and is expected to close in early July. An annual and special meeting of the shareholders is expected to be held on or around 5 July this year to take up the voting process. 

TD Securities and Torys are serving as the exclusive financial advisor and legal counsel respectively to WesternZagros, while Dentons Canada is acting as legal counsel to Crest.

With a focus on acquiring properties and exploring for, developing and producing crude oil and natural gas in Iraq, WesternZagros, through its wholly owned subsidiaries, holds a 40% working interest in two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq.