A bid for KRG-focused WesternZagros amid rising output and improved payments may signal improved investor confidence in the region’s troubled oil & gas sector.

Investor confidence in Iraqi Kurdistan’s oil sector has taken a hit in recent years with geological downgrades, payment concerns, political upheaval and the advance of the Islamic State. But has it now bottomed out?

Canadian-listed WesternZagros is focused entirely on the KRG, where it has 40% stakes in two blocks...