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To: ogi who wrote (145157)	2/13/2009 10:11:55 AM
From: Veteran98	Read Replies (1) \| Respond to of 314077

WesternZagros Resources Ltd Terry Peters, MBA, 1.416.869.6597 WZR : TSX-V : C$0.88 \| C$182.6M \| Speculative Buy , Target C$1.60 • Initiating coverage with a SPECULATIVE BUY rating and C$1.60 target Pure play on Kurdistan The company holds a production share contract (PSC) with the Kurdistan Regional Government (KRG) to explore 2,120 square kilometers of the Kalar-Bawanoor block which is located in close proximity to several major oil fields in Iraq. It is on trend with the Kirkuk-KorMor-Chia Surk structural trend, with the Kirkuk field estimated to have 25 billion barrels of oil. WesternZagros is the operator and holds a 40% participating interest in the block with Talisman Energy (40%) and the KRG (20%). The company completed its seismic program in July 2008 and spud its first well, Sarqala-1, in May 2008, targeting 4 potential reservoirs. The well was successfully side tracked after experiencing operational delays and the company expects to announce drilling results in the near term. Valuation We have used a combination of approaches in determining our target price: considering current cash and capital invested; recent transactions; and a generic PSC model. Our target price represents cash and invested capital and an approximate 10% risked scenario for an approximate 200 million barrel success. It also equates closely to our estimate of the implied value from Talisman’s recent 40% working interest purchase on WesternZagros’s block. We are initiating coverage of WesternZagros with a SPECULATIVE BUY rating and a $1.60/share target price. Action We are initiating coverage on WesternZagros Resources with a SPECULATIVE BUY rating and a 12-month target price of C$1.60. Our SPECULATIVE rating reflects the risk that without success, WesternZagros may end up worth nothing.