WesternZagros Resources Ltd. (WZR-V C$1.14)


Gavin Wylie - (403) 213-7333

(Scotia Capital Inc. - Canada)

Fourth Straight Increase for Kurdamir





WesternZagros's updated resource estimates for Kurdamir indicated a 230% increase in 2C

contingent resources, the fourth straight increase in contingent resource by Sproule since the

original discovery in November 2009.





We see the increase in Oligocene oil contingent resource / 2C to 410 mmbbl (vs. 124

mmbbl) as a key sign behind the commercial viability and de-risking the future of the

Kurdamir discovery. The previously indicated 146 m light oil column with no indication of

water suggests the oil reservoir of the Kurdamir structure could extend further than

previously assessed and the limits are yet to be fully defined. WesternZagros also noted 138

mmbbl of gross 2C contingent in the Eocene reservoir for the first time, however we remain

more skeptical on the Eocene / Cretaceous potential given the sub-commercial rates

observed from the single cased hole test in October.




We maintain our Sector Outperform rating on WesternZagros and have increased our oneyear

target price to $3.00 (vs. $2.50) per share based on our revised risked NAVPS of $3.06

(vs. $2.58 previously).





In our view, the consistent increases from a rather conservative evaluator (Sproule) and

reaffirmed wells rates of 7,000-11,000 bbl/d (horizontal well) continue to stack up extremely

well within our International E&P peers.

Pertinent Data

New Old




-- SO




-- Speculative


1-Yr $3.00 $2.50




-- US$-0.01




-- US$0.05




-- US$0.04

New Valuation:

Based on our risked NAV of $3.06/share.

Old Valuation:

Based on our risked NAV of $2.58/share.

Key Risks to Target:

Commodity prices, exploration, project

execution, political/regulatory.

Full Story

ScotiaView Analyst Link

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