ARHT Media Inc V.ART.H

RE: RE: RE: RE: RE: RE: RE: NIKO "..cost of all op

[eagle35]

We view Vast Exploration as offering one of the highest potential exploration

rewards within Kurdistan, but it remains highly speculative given its pure wildcat

exploration base. In our opinion, Vast carries significant prospective upside as it

chases large oil targets (>1.7 billion barrels of OOIP) on the Qara Dagh (Black

Mountain) Block, where it holds a 37% non-operated working interest. The Qara Dagh

Block is operated by Niko Resources. Vast trades on the TSX Venture Exchange under

the symbol VST and reports its financial results in C$ in accordance with Cdn GAAP.

Business Mix (Based on revenues unless otherwise noted)

Exploration; Kurdistan

Performance Drivers

Exploration success, political events in Kurdistan, crude oil prices

Comparable Companies (TSX unless otherwise noted)

WZR, SNM, LFD, HOC, GKP, DNO

.Recent Update Text as of 29SEP11 Vast’s testing of the Shiranish formation within its Qara Dagh-1 well has been

completed, the end result being a tight reservoir that failed to flow

commercial rates, which we anticipate could send the stock lower in the near

.term. We have downgraded our rating on Vast Exploration to 3-Sector Underperform

(previously 2-Sector Perform) and have reduced our one-year target price to

.10 (from
.30) per share based on our revised risked NAVPS estimate of

.
.12 (vs.
.30). The downgrade is based on our view that it will be increasingly difficult to

raise the required funds for its next exploration well (Qara Dagh-2) in late

2012, which could dilute shareholders or require farming out a material portion

.of its interest in the block (dilutive to NAV). The lack of flow rates, uncertainty around funding, and no material exploration

news for potentially 12 months leaves us cautious toward the name today. That

said, we recognize the well did have oil shows in the Shiranish, but failed to

reach its primary objective in the Qamchuqa/Kometan. As such, we could see

ourselves becoming more bullish as funding is resolved and as drilling of the

next well nears. Gavin Wylie (Scotia