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.
1-Yr $3.00 $2.50
Based on our risked NAV of $3.06/share.
Based on our risked NAV of $2.58/share.
Key Risks to Target:
Commodity prices, exploration, project
ScotiaView Analyst Link
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