April 12, 2011 / 12:54 PM / 7 years ago

UPDATE 1-WesternZagros raises going concern doubts on Iraq woes

* Says can continue as going concern only if it gets funding

* Says no assurance that funding will be available

* Had deficit of $45.5 mln at the end 2010 (Adds details)

April 12 (Reuters) - WesternZagros Resources Ltd , which is engaged in exploring and producing crude oil and natural gas in Iraq, raised doubts about its ability to operate as a “going concern” unless it secures additional funding.

WesternZagros is one of the 40 foreign companies that have invested in the semi-autonomous northern region of Iraq, Kurdistan, and holds a production sharing contract with the regional government.

The company said the funding depends partly on the resolution of the contract negotiations and the ability to export from the semi-autonomous region.

Some companies began exporting oil from Kurdistan in February after years of wrangling between Kurdistan and Iraq, but the key issue of payments has still not been resolved. [ID:nLDE72912O]

Getting more funding will also depend on the resolution of the remaining political disputes in the war-torn country and the results of the company’s exploration activities, WesternZagros said in a statement.

An Iraqi government official had said earlier in April that Iraq and Kurdistan are likely to reach an agreement in the second half of 2011. [ID:nLDE73422D]

WsternZargos, which posted a net loss of $5.7 million, or 3 cents a share last year, said it had an accumulated a deficit of $45.5 million at end of 2010.

There is no assurance that sufficient funds will be available in the future, said the company, which has a market value of about $130 million.

WesternZagros shares closed at 6 Canadian cents on Monday on the Toronto Stock Exchange.

(Reporting by Arnika Thakur in Bangalore; Editing by Saumyadeb Chakrabarty)

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