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WesternZagros Resources Ltd.

TICKER: WZR:TSX.V

WesternZagros Resources Ltd. is an international natural resources company engaged in acquiring properties and exploring for, developing and producing crude oil and natural gas. WesternZagros holds two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan region of Iraq.


The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Comments:

Morning Coffee (5/23/14) "Perhaps more importantly WesternZagros Resources Inc. announced it formed a Special Committee to evaluate all financing and strategic alternatives available to the company with a view to enhancing shareholder value. WesternZagros has retained a Wall Street banker to act as its financial adviser."

David Dudlyke, Dundee Capital Markets (5/22/14) "An extended 44-day well test of the lowest Oligocene test interval (DST-6) within WesternZagros Resources Ltd.'s Kurdamir-2 well resulted in aggregate light oil production of 90 Mbbl, significant gas volumes but no formation water. The latter, given the test duration, depth and drawdown, is indicative, in management's view, of an Oligocene oil-water contact materially deeper than the 'lowest known oil' assumption of the current audited gross contingent oil resource estimate of 386 MMbbl."

The Energy Report Interview with Matt Badiali (4/10/14) "WesternZagros Resources Ltd. found oil, vetted it and now has a permit to produce it. That pushes it up into the No. 1, No. 2 draft pick area. However, I warn people not to invest in just one company." More >

David Popowich, Macquarie Capital Markets (3/14/14) "WesternZagros Resources Ltd. has placed strategic focus on development of the Kurdamir and Sarqala discoveries. . .its partners are preparing to test the Hasira-1 well after initial results confirmed light oil in the Jeribe reservoir. . .the company is funded for 2014, with the focus now on development. . .we believe significant valuation uplift remains in the conversion of the Kurdamir and Sarqala resources into reserves, as the firm has retained its highest-value acreage."

David Dudlyke, Dundee Capital Markets (3/13/14) "WesternZagros Resources Ltd. is fully funded to cover the revised 2014 capital budget of $70M. . .development at the company's giant Kurdamir discovery production facilities is already in place, and a workover of the Sarqala-1 well is underway and expected to double well production capacity from 5 Mbbl/d to 10 Mbbl/d. The company and its JV partner Gazprom Neft expect to submit a development plan for the Garmian Block to the Kurdistan regional government by June 2014 and upon approval expect to commence initial production in H2/14. . .we reiterate our Buy recommendation and CA$2.25/share price target."

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David Dudlyke, Dundee Capital Markets (2/13/14) "Light 42 API oil has been successfully tested at WesternZagros Ltd.'s Baram-1, indicating that the fault separating the Baram structure from Kurdamir has provided a seal; however, the rate (600 bbl/d of oil and water) and log data indicate both a low-permeability reservoir and an intersection with an oil/water contact. . .the scale of the Kurdamir discovery remains undiminished following the Kurdamir-3 well test results, in which anomalous sequences of water and oil were observed, along with a lower fracture density within the oil-bearing reservoir, almost 1 Bboe of gross mean contingent resource (oil: 541 MMbbls) across the Oligocene and Eocene horizons. In addition, the company has filed a declaration of commerciality for the Garmian block, based on the Sarqala light oil discovery; in parallel, the Hasira-1 well has successfully appraised an extension of the Sarqala discovery within the shallow Jeribe horizon and will now explore the deeper Oligocene reservoirs."

The Energy Report Interview with Matt Badiali (1/2/14) "WesternZagros has a couple of big exploration blocks in the Kurdamir region of Kurdistan. I had a chance to meet with their geologists and members of the team. These people are well informed and technically savvy. . .I was very impressed by WesternZagros. The company is educated on the region, which is critical to success. Companies have to be sensitive to the religious and political differences between the Kurds and the Arabs. The two groups are distinctly different. The Kurdish population is split and isolated due to the arbitrary boundaries drawn after World War II. These boundaries left isolated pockets of Kurds separated in three different countries.

"And it's important for WesternZagros' investors to understand, too. Investors boarded a bus—not an armored bus because this area really is very civilized—and went to look at the property for themselves. WesternZagros' leases are in the southeast part of Kurdistan, on trend with the giant Kirkuk oil field, which up until the discovery of Ghawar in Saudi Arabia, was the largest in the world. The oil is lighter and sweeter, which makes it more valuable. The company has two production sharing contracts that are about 500,000 acres large. It was the fourth international company to come into Kurdistan, so this company was an early mover. The company is fairly small. It has almost 5 Bboe of prospective oil. It's an interesting little play. When the rollup happens, WesternZagros will be included in that group, absolutely." More >

Deborah Bacal, Proactive Investors (11/14/13) "WesternZagros Resources Ltd. is pressing ahead with its aggressive exploration program. . .the update came in the junior oil and gas explorer's Q3/13 financials, which revealed it had $124.7M in working capital at the end of September, excluding a $13M deposit held in trust for a drilling contract, leaving it well positioned to carry out its planned activities. . .WesternZagros has identified four prospective exploration drilling targets, with Qulijan and Chwar anticipated to spud in Q1/14."

David Dudlyke, Dundee Capital Markets (11/14/13) "With $175M of cash on hand, WesternZagros Resources Ltd. can amply fund residual 2013 capex of some $60M with more than $100M available for its 2014 capital program. . .given the looming 2014 exploration deadlines (Kurdamir: Sept. 1, 2014, Garmian: Dec. 31, 2014), the pace at which WesternZagros and its partners intend to explore and appraise prospects is about to accelerate. . .we reiterate our Buy recommendation and $2.50/share target."

David Dudlyke, Dundee Capital Markets (8/29/13) "WesternZagros Resources Ltd.'s Q2/13 financial results were in-line with expectations and more importantly, the company remains fully funded to execute its remaining 2013 capex program of some $60M. . .in terms of upcoming catalysts, the next major event for the stock is the remaining test results from Kurdamir-3. . .we reiterate our Buy recommendation."

David Dudlyke, Dundee Capital Markets (7/23/13) "WesternZagros Resources Ltd. reported promising log results from Kurdamir-3, with test results expected in August. . .located 5 km southwest and down-dip of the prior well, the Kurdamir-3 well successfully penetrated the Oligocene oil column without encountering the Kurdamir gas cap, thus negating any issues of gas channelling behind casing/liners during testing. . .the Baram-1 well, which is the next key catalyst, is due to spud in August."

David Popowich, Macquarie Capital Markets (7/18/13) "WesternZagros Resources Ltd. announced that the Kurdamir-3 well (40% working interest) has reached total depth and that a cased-hole testing program has commenced. . .initial results from Kurdamir-3 appear positive. . .with operations underway on multiple fronts, the company is entering the busiest period in its history. . .WesternZagros remains one of our top international exploration and production picks."

Dundee Capital Markets (7/15/13) "We take this opportunity to highlight our top picks within our international exploration-and-production coverage universe. . .for funded, high-impact exploration, we include WesternZagros Resources Ltd. . .several private placements, amounting to CA$175M over the past 12 months. . .amply fund the company's exploration and appraisal program into mid/late 2014. The company is thus able to fund additional exploration and/or appraisal drilling beyond the current drilling. . .potential additional exploration targets next year include Qulijan, Chwar, Alyan, Qula or the Zardi complex. The most immediate catalyst is the Kurdamir-3 appraisal well; indeed, testing of the targeted Oligocene reservoir horizon is planned to take place shortly."

David Dudlyke, Dundee Capital Markets (7/2/13) "WesternZagros Resources Ltd. completed the sale of CA$30M 4% convertible senior unsecured notes. . .the company is now well funded into mid/late 2014, and thus able to fund additional exploration and/or appraisal drilling beyond the current drilling program—Kurdamir-3, Hasira-1, Baram-1 and Upper Bakhtiari wells."

David Dudlyke, Dundee Capital Markets (6/19/13) "WesternZagros Rescources Ltd. completed the sale of CA$70M 4% convertible senior unsecured notes. . .these convertible notes arranged with Paulson supplant the Crest loan (US$44.5M balance) and provide more favorable terms. . .given the pace at which WesternZagros and its partners need to explore and appraise prospects ahead of the 2014 exploration deadline (Kurdamir: September 1, Garmian: December 31), this removal of a financial overhang during this exploration period is to be welcomed. . .the company is now funded into mid-2014."

David Popowich, Macquarie Capital Markets (6/6/13) "With Kurdistan/Turkish relations expected to improve hydrocarbon export visibility over the next few years, and three high-impact exploration and appraisal wells slated for the remainder of 2013, we reiterate our Outperform rating on WesternZagros Resources Ltd. This stock remains one of our top speculative picks in Canada, and one of Macquarie's top picks internationally for exploration exposure in Kurdistan."

David Dudlyke, Dundee Capital Markets (5/24/13) "WesternZagros Resources Ltd.'s 2013 drilling campaign is progressing as per expectations: The Kurdamir-3 appraisal well is approaching total depth, and a five-well drilling program has now commenced on the Garmian block. Baram-1, likely to spud in Q3/13 with results available by year-end/early 2014, could prove to be the highest impact well for the company. . .we remain Buy rated."

David Dudlyke, Dundee Capital Markets (5/21/13) "WesternZagros Resources Ltd.'s 2013 drilling campaign is progressing as per expectations: The Kurdamir-3 appraisal well is approaching TD, and a five-well drill program has now commenced on the Garmian block. With results from the Kurdamir-3 well anticipated in Q3/13, and multiple wells planned for the Garmian block, WesternZagros' 2013 exploration/appraisal program should provide several potentially material catalysts throughout 2013 and into 2014. . .we remain Buy rated with a CA$3.50 target."

FirstEnergy Global (4/10/13) "We maintain our Outperform recommendation for WesternZagros Resources Ltd. Upside to our risked NAV now stands at over 150% from current trading levels."

The Energy Report Interview with Ian Mortimer (3/14/13) "One interesting example we've held for a long time is WesternZagros Resources Ltd. We think that Iraq and Kurdistan could see significant production growth in the medium term. Iraq could be moving from 2.5–3 MMb/d up to, say, 5 MMb/d in the next decade, potentially. But in the short term, even 1–2 MMb/d production growth would be reasonably significant in the world market. WesternZagros is a pure play on Kurdistan production growth. It currently has no production, but was an early mover in the space with very good acreage." More >

David Dudlyke, Dundee Capital Markets (3/11/13) "WesternZagros Resources Ltd. has received above-market equity financing from Crest Energy International LLC, which represents not only a vote of confidence in the underlying value of WesternZagros' asset base but also is a less dilutive financing solution than any equity raise in tandem with a much rumored United Kingdom listing. With this private placement, the company is now fully financed through 2013, given its proposed 2013 capital program of some $100M, and partway into 2014. . .we remain Buy rated."

Energy Stock Channel (3/11/13) "In trading on Monday, shares of WesternZagros Resources Ltd. crossed above their 200-day moving average of $1.13, changing hands as high as $1.14/share. The company's shares are currently trading up about 11% on the day."

David Popowich, Macquarie Capital Markets (2/26/13) "WesternZagros Resources Ltd. will be a catalyst-rich story in 2013, when exploration success could see the company unlock value from two further high-impact discoveries. We continue to view WesternZagros as a top speculative pick and reiterate our Outperform rating."

Gerry Donnelly, FirstEnergy Capital (2/12/13) "We have increased our target price slightly to CA$3 (CA$2.95 previously) in line with our new risked NAV, on the back of increased confidence following further analysis of WesternZagros Resources Ltd.'s results from the Kurdamir-2 well that the Baram prospect could contain the extension of the Kurdamir oil leg in the Garmian Block, leading to a 300% increase in estimated oil mean prospective resources attributable to the Oligocene at Baram. . .we maintain our Outperform recommendation with risked NAV now representing approximately 200% upside."

Ryan Savage, GMP Securities (2/11/13) "WesternZagros Resources Ltd. revised its audited volumes of contingent and prospective resources for the Kurdarmir block, where the company holds a 40% working interest. . .prospective resources in the Oligocene formation were revised upward to 1,018 MMbbl (from 884 MMbbl) on a gross working interest basis; the Baram prospect, which is believed to be an extension of the field, was disclosed as having 320 MMbbl of prospective resources (gross working interest). This is the first time WesternZagros has provided an estimate for the prospect."

Gavin Wylie, Scotia Capital (2/11/13) "With estimated mean unrisked gross prospective resources of 423 MMbbl (+300% versus previous), WesternZagros Resources Ltd.'s Baram (Garmian block) represents a potentially significant catalyst in H2/13 with its anticipated spud in August. . .if successful, Baram could prove to be a significant source of upside and continue to push the commercial viability of the combined Kurdamir-Topkhana-Baram structure. We maintain our Sector Outperform rating."

Peter Hitchens, HSBC Securities (1/31/13) "WesternZagros Resources Ltd. has announced that following the successful appraisal well, on the Kurdamir discovery (WZR 40%) in the KRI (Kurdistan Region of Iraq), that its independent reserves evaluator, Sproule International, has increased the contingent resources on the field; mean contingent oil resources are now estimated to stand at 590 MMbbl of oil compared with 147 MMbbl previously. . .this discovery could well prove to be the largest light oil discovery made in the region to date. . .WesternZagros remains our preferred play in Kurdistan."

Gerry Donnelly, FirstEnergy Capital (1/29/13) "WesternZagros Resources Ltd.'s recent resource update on its Kurdamir block not only exceeds our internal assumptions but also highlights Kurdamir as potentially one of the largest light oil fields in Kurdistan and in the wider region. . .trading at a 15% discount to our new core NAV (CA$1.41) and offering approximately 150% upside to our risked NAV, we maintain our Outperform recommendation for one of the most promising stories in our coverage universe."

Morning Coffee (1/29/13) "Shares of WesternZagros Resources Ltd. jumped after the company announced a contingent resource estimate for its Kurdamir block. . .the total mean estimate of gross unrisked contingent resources at Kurdamir has increased to 590 MMbbl oil in the Oligocene and Eocene reservoirs. When gas and condensate are included, the mean contingent resources exceeded 1 Bboe."

Shahin Amini, TD Newcrest (1/28/13) "WesternZagros Resources Ltd. provided an updated third-party contingent resource report for the Kurdamir discovery. . .the company saw an increase in gross mean unrisked contingent resource to 590 Mmbbl for the Oligocene and Eocene reservoirs. . .the nearly threefold increase in oil resource was ahead of our expectations. . .we reiterate our Outperform rating."

David Popowich, Macquarie Capital Markets (1/28/13) "WesternZagros Resources Ltd. provided an updated third-party contingent resource report for the Kurdamir discovery. . .the company saw an increase in gross mean unrisked contingent resource to 590 Mmbbl for the Oligocene and Eocene reservoirs. . .the nearly threefold increase in oil resource was ahead of our expectations. . .we reiterate our Outperform rating."

David Dudlyke, Dundee Capital Markets (1/28/13) "WesternZagros Resources Ltd. released impressive updated resource figures for the Kurdamir Block—announcing fourfold growth in contingent oil resources—which now stand at 590 MMbbls. . .this update is clearly positive and beyond our expectations. . .we are upgrading our target, once again, to CA$3.50/share (from CA$3/share) and maintaining our Buy rating."

Ryan Savage, GMP Securities (1/28/13) "There were substantial increases to the estimated contingent and prospective resources attributed to the Eocene and Oligocene reservoir sequences at Kurdamir. . .the result is a substantial increase to our NAV. . .it is the Baram-1 exploration well on the adjacent Garmian block that we are most interested in, as proving the field actually extends out onto an adjoining block could potentially provide the largest future resource upside. . .the company plans to spud the Kurdamir-3 exploration well in short order (early February), which is aimed to delineate the field to the west of the current structure."

Deborah Bacal, Proactive Investors (1/23/13) "WesternZagros Resources Ltd. expects that the latest Kurdamir-2 test and wireline log data will 'substantially increase' contingent and prospective resource estimates for the Oligocene reservoir. . .earlier results supported the company's belief that the Oligocene has the potential to hold over a billion barrels of recoverable oil."

Shahin Amini, TD Securities (12/12/12) "WesternZagros Resources Ltd. has an active 2013 exploration and appraisal program that could yield substantial contingent resources. . .we highlight Kurdamir-3 and Baran-2 as two potentially high-impact wells targeting 200–250 MMbbl and 116 MMbbl of contingent resources respectively. . .we are also anticipating the release of a revised resource update during Q1/13, which we expect to present increased contingent resource estimates for Kurdamir."

David Przybyla, FirstEnergy Capital (12/12/12) "Trading at a 10% discount to our new core NAV and offering a 140% upside, we maintain our Outperform recommendation for WesternZagros Resources Ltd. The company's story continues to benefit from short-term catalysts, including an updated Competent person Report (early Q1/13) and a three-well campaign on Mil Qasim scheduled for February-April 2013."

David Dudlyke, Dundee Capital Markets (12/11/12) "WesternZagros Resources Ltd. announced positive results from the second Oligocene cased-hole test at Kurdamir-2. . .our view remains that Kurdamir, by any standard, remains a remarkable 'supergiant' discovery. We not only expect a material lift to contingent resources for Kurdamir's Oligocene section, but expect that well/completion engineering will provide a solution that minimizes unwanted gas intrusion."

Gavin Wylie, Scotia Capital (12/11/12) "WesternZagros Resources Ltd. announced that it has successfully completed the second of the three cased-hole tests in the Oligocene formation at Kurdamir-2, which flowed at 2,184 bbl/d + 10.4 MMcf/d. . .we maintain our Sector Outperform rating. . .the completed Kurdamir testing now confirms the commercial viability of the project, an important step in derisking the full potential of the Kurdamir structure."

Ryan Savage, GMP Securities (12/11/12) "WesternZagros Resources Ltd. announced another successful test in the Oligocene formation at its Kurdamir-2 well (40% WI); the well tested at a stabilized rate IP3 of 2,184 bbl/d of 42º API oil and 10.4 MMcf/d of natural gas. . .the company now plans to maximize oil production from the well through an extended well test and is preparing to complete the Kurdamir-2 well. . .the company expects the contingent resource estimates to increase for the Oligocene formation upon the disclosure of the new resource estimate. . .the results continue to support management's belief that the Oligocene has the potential to hold over 1 Bbbl of recoverable oil."

David Dudlyke, Dundee Capital Markets (12/3/12) "Following Abu Dhabi National Energy's (TAQA) sale of its entire holding of 74M of WesternZagros Resources Ltd.'s shares last week, Richard Chandler Corp., a Singapore-based institutional investor, has acquired ~62.7M company shares at ~C$1.16/share, thus holding 15.21% of WesternZagros and becoming its newest and largest shareholder. . .we view the entry of Richard Chandler Corp. as the company's largest shareholder as a positive signal. . .we believe that our valuation is well supported by recent and prospective well results, with further upside potential driven by an active 2013 drilling program."

Morning Coffee (12/3/12) "WesternZagros Resources Ltd.'s partner Talisman Energy Inc. recently announced that it has successfully completed the first of three planned cased-hole tests in the Oligocene formation of the Kurdamir-2 well in the Kurdistan region of Iraq. . .the company now expects an increase in its contingent resources based on the now-proven lowest-known oil in the Kurdamir-2 well at 2,590m. . .the test results also validate that the prospective resources contained in the Oligocene extend still further down the structure."

Shahin Amini, TD Securities (11/22/12) "For Q3/12, WesternZagros Resources Ltd.'s financial results were in line with expectations and cash at quarter end was $152M. On Nov. 8, 2012, the company restarted the extended well test at the Sarqala-1 well after receiving approval from the Kurdistan regional government; producing at approximately 5,000 boepd (gross), the production is being delivered into the export market."

David Dudlyke, Dundee Capital Markets (11/21/12) "WesternZagros Resources Ltd.'s Q3/12 results provided few material variances from our previous assumptions. . .Kurdamir-3 is expected to spud in February 2013 to further appraise the Oligocene reservoir. . .extended well testing of Sarqala-1 has resumed. . .the company's balance sheet remains robust. . .we believe no further capital will be required until H2/13 in order to maintain sufficient liquidity."

David Przybyla, FirstEnergy Capital (11/20/12) "Following WesternZagros Resources Ltd.'s first successful cased-hole testing of the Oligocene at Kurdamir-2, we have increased our target price to CA$2.50 (from CA$2.40), in line with our risked NAV, and we maintain our Outperform recommendation. This test confirms the productivity of the Oligocene and further derisks the oil potential of the flank of the Kurdamir structure. . .the company remains our preferred name to play the ongoing consolidation in Kurdistan and one of the most promising exploration and production stories in our coverage universe."

Gavin Wylie, Scotia Capital (11/19/12) "WesternZagros Resources Ltd. announced that it has successfully completed the first of the three cased hole tests in the Oligocene formation at Kurdamir-2, flowing 3,450 bbl/d/8.8 Mmcf/d. . .we see this as incrementally positive for the company given the ~3,500 bbl/d of 38° API gravity crude was achieved from the deepest portion of the reservoir with no formation water recovered. . .we maintain our Sector Outperform rating on WesternZagros."

Shahin Amini, TD Securities (11/19/12) "WesternZagros Resources Ltd. has an attractive portfolio of exploration and appraisal assets with a very active work program for the period to the end of 2013. With a number of high-impact wells, and considering the company's successful track record to date, we view WesternZagros as an attractive investment proposition for those seeking a Kurdish-focused exploration and production investment opportunity."

David Dudlyke, Dundee Wealth Management (11/19/12) "WesternZagros Resources Ltd. has announced that well test rates of up to 3,450 bbl/d of light oil were achieved from the deepest of three planned Oligocene tests. . .we would expect a material market reaction to this positive test result within the Oligocene reservoir horizon—the largest 'prize' within the Kurdamir structure. This well test exceeded prior expectations despite targeting the deepest, poorest-quality section of the reservoir. . .we remain Buy rated with a CA$2.30 target."

David Popowich, Macquarie Capital Markets (11/19/12) "WesternZagros Resources Ltd. announced flow rates from the first cased hole test of the Oligocene reservoir in Kurdamir-2. . .we see upside to existing contingent and prospective resource estimates for the structure. . .the company remains our top speculative pick in our International E&P coverage space. . .we see plenty of room for the stock to run as the market derisks Oligocene resource potential in the next two flow tests. We reiterate our Outperform rating."

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