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Zargon Oil & Gas Ltd. Sanctions Little Bow ASP Tertiary Recovery Project Construction, Provides an Operational Update, Provides 2013 Guidance and Releases 2012 Year End Reserves

CALGARY, ALBERTA -- (Marketwire) -- 02/21/13 -- Zargon Oil & Gas Ltd. (the "Company" or "Zargon") (TSX:ZAR) (TSX:ZAR.DB) is pleased to announce the sanctioning of the construction of the Little Bow Alkaline Surfactant Polymer ("ASP") tertiary recovery facility, provide an operational update, provide 2013 guidance and report its 2012 year end reserves. Zargon intends to release its 2012 audited financial results on March 12, 2013, after market close.


--  Zargon is sanctioning the construction of its tertiary recovery ASP oil
    exploitation project at the Little Bow oil property in Southern Alberta.
    This ASP project entails the injection of large volumes of a dilute
    chemical solution into a partially depleted oil reservoir to recover
    incremental oil reserves. With sanctioning, phases 1 and 2 of the Little
    Bow ASP project will be Canada's ninth operational ASP project. For a
    full description of the Little Bow ASP project, please refer to the
    company's website at  
--  After three years of preparation, Zargon is now ready to proceed with
    the construction phase of the Little Bow project. In particular, the
    Energy Resources Conservation Board ("ERCB") regulatory scheme approval
    has been obtained, detailed engineering design has been completed, long
    lead time and large equipment orders have been placed and Class 3
    construction cost estimates have been prepared. The project entails the
    construction of a water softening plant, chemical handling/mixing
    facilities and water injection facilities. In addition, there will be
    oil battery upgrades, pipeline replacements/upgrades, water injector
    conversions and well reactivations. 
--  Including the $6.5 million of ASP costs spent in 2012, the total capital
    cost of the wholly owned phases 1 and 2 of the Little Bow ASP project is
    approximately $59 million (excluding the cost of capitalized chemicals).
    The scheduling of these expenditures is $38 million in 2013, $4 million
    in 2014, and $11 million in 2015 relating to the phase 2 implementation.
    With sanctioning, field construction will proceed during this summer,
    which will permit January 2014 first injection and initial incremental
    oil volumes by mid 2014.  
--  Based on Southern Alberta analog pools and Little Bow reservoir model
    studies with predicted recoveries as high as a 17 percent incremental
    reservoir recovery, Zargon's internal base case sanctioning economics
    use a 12 percent incremental reservoir recovery factor and predicts an
    estimated 4.87 million barrels of proved and probable oil reserves. The
    increased reserves are due in part to an updated reservoir model with
    increased chemical injections, and the corresponding phase 1 and 2
    chemical costs for the six year chemical injection period (2014-2020)
    will be capitalized and are estimated at $66 million ($50 million PVBT
--  Based on Zargon's base case economics, incremental oil production from
    phases 1 and 2 is estimated to average 1,470 barrels of oil per day in
    the five year 2016 to 2020 period. The long-life stable production
    profile of the ASP project is well suited for Zargon's dividend paying
    business model. 
--  Phase 1 and 2 field netbacks are estimated, assuming a field oil price
    of $68 per barrel ($85 Cdn. per barrel Edmonton par price), to be
    approximately $50 per barrel of incremental oil production. Zargon
    estimates that the phase 1 and 2 before tax rate of return for this
    enhanced oil recovery project will be 18 percent. The project is
    calculated to have a breakeven (PVBT 10%) field oil price of $48 per
    barrel. Potential upsides to these results could come from follow-on
    phases, higher oil prices, improved reservoir recoveries or Alberta
    Crown tertiary royalty modifications. 
--  Follow-on capital expenditures for phases 3 and 4 of the Little Bow ASP
    project are expected to be completed by 2017 with forecasted total
    combined phase 1 to 4 peak production rates expected to occur in 2020 at
    a combined incremental production rate of 2,300 barrels of oil per day.
    For further information regarding the Little Bow ASP project, please
    refer to the company's updated corporate presentation, which is
    available on our website at 


--  Fourth quarter 2012 total production averaged 7,720 barrels of oil
    equivalent per day (on a 6:1 equivalency basis), a one percent increase
    from the prior quarter's rate of 7,634 barrels of oil equivalent per
--  Fourth quarter 2012 oil and liquids production volumes averaged 5,065
    barrels per day, essentially unchanged from 5,079 barrels per day in the
    prior quarter and less than one percent below production guidance levels
    of 5,100 barrels per day. On a production per million share basis
    (basic), oil and liquids production averaged 170 barrels per day in the
    fourth quarter essentially unchanged from the prior quarter's rate of
    171 barrels per day. 
--  Fourth quarter 2012 natural gas production volumes averaged 15.93
    million cubic feet per day, a four percent increase from the prior
    quarter rate of 15.33 million cubic feet per day and three percent above
    production guidance levels of 15.50 million cubic feet per day. The
    production gains came from the reactivation of natural gas wells that
    had been shut-in during the summer due to very low field natural gas
--  Fourth quarter 2012 oil and liquids production represented 66 percent of
    total production based on a 6:1 equivalent basis, up from 61 and 58
    percent weightings in fourth quarter 2011 and 2010, respectively. 
--  For calendar 2012, Zargon's production averaged 8,117 barrels of oil
    equivalent per day, comprised of 5,255 barrels of oil and liquids per
    day and 17.17 million cubic feet of natural gas per day. 
--  During the full year 2012, Zargon spent $58.2 million (unaudited) on
    field activities and a further $6.5 million (unaudited) on the Little
    Bow ASP project. These expenditures were partially offset by a net $34.5
    million (unaudited) of property dispositions and resulted in net 2012
    total capital expenditures of $30.2 million (unaudited).  
--  During the 2012 fourth quarter, Zargon spent $22.5 million (unaudited)
    on field capital programs (exclusive of $3.2 million of ASP related
    expenditures). Zargon completed an active 15.0 net well oil exploitation
    drilling program (13.0 net horizontal wells) that resulted in 14.0 net
    oil wells and 1.0 water disposal well. The drilling program included 4.8
    Williston Basin horizontal Frobisher and Midale oil wells, 3.0 oil wells
    in the Taber Sunburst property, along with 4.0 Hamilton Lake and 2.0
    Bellshill Lake oil exploitation wells in the Alberta Plains North core
    area. The capital program also included significant battery, pipeline
    and infrastructure upgrade expenditures at Hamilton Lake, Bellshill
    Lake, Little Bow, Elswick and Steelman. 
--  Results from the Bellshill Lake and Taber fourth quarter drilling
    programs met or exceeded expectations. In the Williston Basin, three of
    the five locations met or exceeded expectations. At Hamilton Lake, three
    monobore horizontal multi-frac locations were drilled in an attempt to
    reduce costs and improve recoveries from our wholly owned 47 section
    Viking oil resource opportunity. Significant improvements in costs were
    made, but initial production data from these wells did not perform up to
    our 60 thousand barrels of oil reserves per well type curve that had
    been based on the results of the first five horizontal locations drilled
    on the property. Prior to drilling further wells on this property, we
    will rework our technical analysis to determine the optimal approach to
    develop the Hamilton Lake oil resource. 
--  During this 2013 year's "heavy spend" period for the construction of the
    Little Bow ASP project, Zargon will proceed with a modest conventional
    oil exploitation capital program. In the first quarter of 2013, we will
    drill five Midale drainage locations in the Williston Basin. In the
    summer, five Taber Sunburst and two Bellshill Viking horizontal wells
    are planned. Williston Basin drilling activities will resume this fall
    with an additional five locations. Additional wells will be added to the
    conventional oil exploitation budget throughout the year, as we complete
    the Little Bow construction project milestones. 


--  Zargon's 2013 capital budget has been set at $40 million for (non-ASP)
    conventional projects with the drilling of 20 net oil exploitation
    wells, plus an additional $38 million for the Little Bow ASP project.
    This $78 million capital program is forecast to be funded by cash flows,
    bank debt and the sale of $20 million of minor non-strategic oil
    properties that are not related to Zargon's six core conventional oil
--  As at the end of the 2012 fourth quarter, Zargon's debt net of working
    capital is $113.2 million (unaudited), a level that represents 51
    percent of the $222.5 million of credit through convertible debentures
    and syndicated loan facilities. 
--  With the revised (non-ASP) 2013 capital budget of $40 million, Zargon's
    2013 oil and liquids production guidance level has been revised to 5,000
    barrels per day. This guidance is based on a 21 percent annual corporate
    oil and liquids production decline, the fourth quarter 2012 oil and
    liquids production rate of 5,065 barrels of oil per day and (non-ASP)
    capital program production addition efficiencies of $40,000 per barrel
    of oil and liquids per day. These guidance levels will be adjusted for
    acquisitions or dispositions as they occur. In the 2013 first quarter,
    oil and liquids production is forecast to average 5,150 barrels of oil
    per day. 
--  Zargon's 2013 natural gas production guidance is expected to average
    15.0 million cubic feet per day, a production level that reflects a 12
    percent "blowdown" corporate decline from 2012 exit rate production
    levels of 16.0 million cubic feet per day. In the 2013 first quarter,
    natural gas production is forecast to average 15.6 million cubic feet
    per day. 
--  For 2013, Zargon has entered into 2,875 barrels of oil per day of oil
    fixed price sales contracts at an average price of $97.94 US per barrel,
    which represents 57.5 percent of the 2013 production guidance levels. 


--  Zargon's 2012 year end proved and probable total reserves decreased nine
    percent to 31.19 million barrels of oil equivalent. These reserves were
    appraised by Zargon's independent reserves evaluator McDaniel &
    Associates Consultants Ltd. ("McDaniel") and are effective as of
    December 31, 2012. On a 6:1 equivalency basis, oil and liquids comprised
    74 percent of Zargon's total proved and probable reserves at year end
    2012, up from a 70 percent weighting at the end of 2011. 
--  Zargon's 2012 year end proved and probable oil and liquids reserves
    decreased four percent to total 23.05 million barrels. On a per share
    basis (basic), Zargon's 2012 year end proved and probable oil and
    liquids reserves were 0.77 barrels, a six percent decrease over the
    prior year. The proved and probable oil and liquids reserves estimate
    includes 4.39 million barrels of probable undeveloped oil equivalent
    reserves assigned using a 10 percent incremental reservoir recovery
    factor to the ASP tertiary oil recovery project at Little Bow, Alberta. 
--  Zargon's 2012 year end proved and probable natural gas reserves
    decreased 21 percent to total 48.82 billion cubic feet, due to a
    combination of production and 7.02 billion cubic feet of negative
    reserve adjustments relating to economic factors. Zargon's business is
    completely focused on oil exploitation, and Zargon has not drilled a gas
    well since the fall of 2010. Over 90 percent of Zargon's proved and
    probable discounted cash flows (PVBT 10%) are attributable to oil and
    liquids production. 
--  Zargon's oil properties are characterized by pressure supported
    reservoirs (waterflood or natural aquifers) that provide long-life, low-
    decline oil production. Consequently, Zargon's proved developed
    producing oil and liquids reserve life index is 6.9 years and Zargon's
    proved and probable producing oil and liquids reserve life index is 9.3
    years. These low decline oil reserves are well suited for Zargon's
    dividend paying business model. 
--  Zargon's year end 2012 "produce-out" net asset value is calculated to be
    $12.79 per basic share. This estimate reflects McDaniel's estimate of
    the Zargon properties' proved and probable future cash flow using a
    before tax 10 percent discount rate and forecast prices and costs plus
    an independent appraisal of Zargon's undeveloped land less an allowance
    for the year end bank debt, the full future face value of the $57.5
    million convertible debenture and working capital deficiencies. On a
    proved and probable developed producing reserve assignment basis,
    Zargon's "produce-out" net asset value is calculated to be $10.64 per
    basic share. The corresponding proved developed producing net asset
    value estimate is $7.75 per basic share.


Reserves included herein are stated on a gross company working interest basis unless otherwise noted. All reserves information has been prepared in accordance with National Instrument 51-101 Standards of Disclosure ("NI 51-101"). In addition to the detailed information disclosed in this press release, more detailed information will be included in Zargon's 2012 Annual Information Form to be filed on SEDAR ( and posted on our website ( in March 2013.

Based on the independent reserves evaluation conducted by McDaniel effective December 31, 2012, and prepared in accordance with NI 51-101, Zargon had proved and probable reserves of 31.19 million barrels of oil equivalent. Reserve reductions from exploration and development activities (including revisions) and corporate and net property acquisitions/dispositions were negative 0.13 million barrels of oil equivalent.

Company Reserves(1)                                                         
                                          Oil and               Equivalents 
                                          Liquids  Natural Gas         (2)  
At December 31, 2012                       (mmbbl)        (bcf)      (mmboe)
Proved producing                            12.74        26.61        17.18 
Proved non-producing                         0.44         3.23         0.98 
Proved undeveloped                           0.23         0.08         0.24 
Total proved                                13.41        29.92        18.40 
Probable additional producing                4.56         9.14         6.08 
Probable non-producing and                                                  
 undeveloped                                 5.08         9.76         6.71 
Total probable additional                    9.64        18.90        12.79 
Total proved and probable producing         17.30        35.75        23.26 
Total proved and probable                   23.05        48.82        31.19 
Proved producing reserve life index,                                        
 years (3)                                    6.9          4.6          6.1 
Proved reserve life index, years (3)          7.2          5.1          6.5 
Proved and probable producing reserve                                       
 life index, years (3)                        9.3          6.1          8.2 
Proved and probable reserve life                                            
 index, years (3)                            12.4          8.4         11.0 
1.  Company working interest reserves are gross reserves before deduction of
    royalties, boe (6:1).                                                   
2.  Boes may be misleading, particularly if used in isolation. A boe        
    conversion ratio of 6 mcf:1 bbl is based on an energy equivalency       
    conversion method primarily applicable at the burner tip and does not   
    represent a value equivalency at the wellhead.                          
3.  Reserve life is calculated using annualized fourth quarter 2012         

A summary reconciliation of the 2012 year end reserve assignments with the reserves reported in the 2011 year end report based on McDaniel's forecast prices and costs is presented below:

Reserve Reconciliation (All Categories)                                     
                                                     Oil and Liquids (mmbbl)
                                       Proved       Probable        & Prob. 
December 31, 2011                       14.60           9.45          24.05 
Discoveries and extensions               0.97           0.45           1.42 
Revisions                                0.57           0.03           0.60 
Acquisitions and dispositions           (0.81)         (0.29)         (1.10)
Production                              (1.92)             -          (1.92)
December 31, 2012                       13.41           9.64          23.05 

Reserve Reconciliation (All Categories)                                     
                                    Natural Gas (bcf)    Equivalents (mmboe)
                                              Proved                 Proved 
                                                   &                      & 
                              Proved Probable  Prob. Proved Probable  Prob. 
December 31, 2011              39.37    22.06  61.43  21.16    13.13  34.29 
Discoveries and extensions      0.43     0.18   0.61   1.05     0.48   1.53 
Revisions                      (3.66)   (3.36) (7.02) (0.04)   (0.53) (0.57)
Acquisitions and dispositions   0.06     0.02   0.08  (0.80)   (0.29) (1.09)
Production                     (6.28)       -  (6.28) (2.97)       -  (2.97)
December 31, 2012              29.92    18.90  48.82  18.40    12.79  31.19 

On a proved and probable basis, Zargon's oil and liquids reserves from development activities increased by 2.02 million barrels, and after net dispositions of 1.10 million barrels the net increase was 0.92 million barrels before production of 1.92 million barrels. Overall, field capital exploration and development programs provided 1.53 million barrels of oil equivalent of new additions. Net property acquisitions/dispositions for 2012 removed 1.09 million barrels of oil equivalent, and provided $34.5 million of net proceeds to Zargon. During the year, positive technical revisions pertaining to Alberta Plains Taber and Little Bow and the Williston Basin Elswick and Ralph oil exploitation properties were partially offset by negative oil reserve adjustments at Alberta Plains North St. Anne property and other minor properties. With the sharply lower natural gas prices in 2012, negative proved and probable natural gas revisions totaling 7.02 billion cubic feet were booked at Jarrow, Pembina and other selected Alberta properties. As a result, overall technical reserve revisions were a negative 0.57 million barrels of oil equivalent.

Reserve Reconciliation (Developed Producing)                                
                                                     Oil and Liquids (mmbbl)
                                       Proved       Probable        & Prob. 
December 31, 2011                       13.69           4.71          18.40 
Discoveries and extensions               0.92           0.37           1.29 
Revisions                                0.86          (0.26)          0.60 
Acquisitions and dispositions           (0.81)         (0.25)         (1.06)
Production                              (1.92)             -          (1.92)
December 31, 2012                       12.74           4.57          17.31 

Reserve Reconciliation (Developed Producing)                                
                                    Natural Gas (bcf)    Equivalents (mmboe)
                                              Proved                 Proved 
                                                   &                      & 
                              Proved Probable  Prob. Proved Probable  Prob. 
December 31, 2011              33.71    11.53  45.24  19.31     6.63  25.94 
Discoveries and extensions      0.43     0.19   0.62   0.99     0.40   1.39 
Revisions                      (1.31)   (2.60) (3.91)  0.65    (0.70) (0.05)
Acquisitions and dispositions   0.06     0.02   0.08  (0.80)   (0.25) (1.05)
Production                     (6.28)       -  (6.28) (2.97)       -  (2.97)
December 31, 2012              26.61     9.14  35.75  17.18     6.08  23.26 

Zargon's reserves are characterized by a high developed producing component. Proved developed producing reserves represent 93 percent of total proved reserves while proved and probable developed reserves account for 75 percent of total proved and probable reserves. For the Little Bow ASP project, McDaniel has assigned 4.39 million barrels of oil equivalent reserves in the probable undeveloped category, which represents 83 percent of the undeveloped reserves and 14 percent of Zargon's total proved and probable reserves assignment.


We have presented finding and development costs below both including and excluding acquisitions and dispositions. While NI 51-101 requires that the effects of acquisitions and dispositions be excluded, we have included these items because we believe that acquisitions and dispositions can have a significant impact on our ongoing reserve replacement costs and that excluding these amounts could result in an inaccurate portrayal of our cost structure.

For 2012, Zargon's proved and probable finding, development and acquisition ("FD&A") costs, taking into account reserve revisions and changes in estimated future development capital during the period were not meaningful due to net dispositions and natural gas reserve write downs. For the purposes of this calculation, the $30.2 million of 2012 net capital additions was combined with a decrease in estimated future development capital for proved and probable reserves of $5.3 million ($123.5 million at December 31, 2012 compared to $128.8 million at December 31, 2011). More than 80 percent of Zargon's 2012 year end future capital costs are attributed to the Little Bow ASP project.

Excluding acquisitions (and dispositions), Zargon's 2012 proved and probable finding and development ("F&D") costs were $61.82 per barrel of oil equivalent. Considering that essentially all of Zargon's 2012 capital program was directed to oil projects, it is insightful to calculate Zargon's proved and probable F&D costs on an "oil only" basis ($58.2 million of conventional capital expenditures plus $6.5 million of ASP capital expenditures, less a $5.3 million change in future capital estimates with 2.02 million barrels of oil and liquid additions). Using this approach, proved and probable F&D "oil only" costs were $29.38 per barrel.

Similarly, Zargon's proved and probable FD&A costs on an "oil only" basis were $27.01 per barrel ($58.2 million of conventional capital expenditures plus $6.5 million of ASP capital expenditures, less $34.5 million of net dispositions and less a $5.3 million change in future capital estimates with 0.92 million barrels of oil and liquid additions). These "oil only' costs compare with Zargon's unaudited 2012 corporate average field oil netback (before interest, general and administrative and other costs) of more than $40 per barrel of oil (unaudited).

Proved and Probable Finding, Development and Acquisition Costs (1)          
                                                     2012     2011  2010(4) 
Total net capital expenditures ($ millions) -                               
 unaudited (2)                                      30.19    48.29    71.38 
Total net capital expenditures plus change in                               
 forecast future development costs ($ millions)                             
 (2)                                                24.85   144.52    79.62 
Proved and probable reserves (mmboe)                                        
  Open                                              34.29    32.39    32.24 
  Discoveries and extensions                         1.53     5.77     3.07 
  Acquisitions and dispositions                     (1.09)    0.06     1.53 
  Revisions                                         (0.57)   (0.59)   (0.84)
  Production                                        (2.97)   (3.34)   (3.61)
  Close                                             31.19    34.29    32.39 
Proved and probable FD&A costs ($/boe) (3)              -    27.58    21.18 
Proved and probable three-year FD&A costs ($/boe)                           
 (3)                                                28.07    21.48    18.83 
Proved and probable F&D costs ($/boe) (3)           61.82    32.41    30.79 
Proved and probable three-year F&D costs ($/boe)                            
 (3)                                                35.35    30.06    24.80 
1.  The aggregate of the exploration and development costs incurred in the  
    most recent financial year and the change during that year in estimated 
    future development costs generally will not reflect total finding and   
    development costs related to reserves additions for that year.          
2.  Amounts exclude additions for administrative assets.                    
3.  Amounts are calculated including the change in future development costs.
4.  2010 numbers do not reflect any changes to accounting rules which may   
    have occurred.                                                          


Zargon's oil, liquids and natural gas reserves were evaluated using McDaniel's price forecasts effective January 1, 2013, prior to provisions for income taxes, interest, debt service charges, transaction costs and general and administrative expenses. The estimated values of future net revenue disclosed do not represent the fair market value of the reserves.

Before Tax Present Value of Future Net Revenue                              
(Forecast Prices and Costs)                                                 
                                                       Discount Factor      
($ millions)                                         0%     5%    10%    15%
Proved producing                                  491.3  388.8  323.0  278.1
Proved non-producing                               14.7   12.2   10.3    8.7
Proved undeveloped                                  7.9    5.9    4.5    3.5
Total proved                                      513.9  406.9  337.8  290.3
Probable additional producing                     225.9  130.0   86.2   62.6
Probable additional non-producing and                                       
 undeveloped                                      157.8   90.1   49.5   23.6
Total probable additional                         383.7  220.1  135.7   86.2
Total proved and probable producing               717.2  518.8  409.2  340.7
Total proved and probable                         897.6  627.0  473.5  376.5

The following net asset value table shows what is customarily referred to as a "produce-out" net asset value calculation under which the current value of Zargon's reserves would be produced at McDaniel's forecast future prices and costs. The value is a snapshot in time as at December 31, 2012, and is based on various assumptions including commodity prices and foreign exchange rates that vary over time. In this analysis, the present value of the proved and probable reserves is calculated at a before tax 10 percent discount rate. In the net asset value calculation, Zargon's 337 thousand net acres of land is valued at $21.7 million based on the independent firm of Seaton-Jordan & Associates Ltd. valuation as at December 31, 2012.

Net Asset Value                                                             
As at December 31 ($ millions)                                         2012 
Proved and probable reserves (PVBT 10%) (1)                           473.5 
Undeveloped land                                                       21.7 
Working capital (excluding unrealized derivative assets/                    
 liabilities) - unaudited                                             (19.9)
Bank debt - unaudited                                                 (35.7)
Convertible debenture - unaudited                                     (57.5)
Net asset value                                                       382.1 
Net asset value per share ($/basic share) (2)                         12.79 
1.  McDaniel's estimate of future before tax cash flow discounted at PV 10  
2.  Calculated using basic total shares outstanding at December 31, 2012 of 
    29.868 million shares.                                                  

The following table provides net asset value estimates at December 31, 2012 for all four reserve categories.

                      McDaniel PVBT 10%  Net Asset Value    Net Asset Value 
Reserves Category         ($ million)(1)   ($ million)(2) ($/basic share)(3)
Proved, developed,                                                          
 producing reserves               323.0            231.6               7.75 
Total proved reserves             337.8            246.3               8.25 
Proved and probable,                                                        
 developed producing                                                        
 reserves                         409.2            317.8              10.64 
Proved and probable                                                         
 reserves                         473.5            382.1              12.79 
1.  McDaniel's estimate of future before tax cash flow discounted at PV 10  
2.  McDaniel's estimated value, adjusted for the following unaudited items  
    at December 31, 2012:                                                   
    - Undeveloped land value as assessed by Seaton Jordan of $21.7 million; 
    - Net debt of $113.2 million, which includes full value of the          
    convertible debenture of $57.5 million.                                 
3.  Calculating using basic total shares outstanding at December 31, 2012 of
    29.868 million shares.                                                  

Forward-Looking Statements - This press release contains forward-looking statements relating to our plans and operations as at February 20, 2013. Forward-looking statements typically use words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "should", "plan", "intend", "believe" and similar expressions (including the negatives thereof). In particular, this press release contains forward-looking statements relating, but not limited to: our business strategy, plans and management focus; the timing of release of our 2012 financial results, our 2013 and beyond capital expenditure program, the source of funding of our 2013 and beyond capital program, anticipated 2013 and beyond production guidance and product mix, drilling, completion, development and exploitation plans and the results therefrom, future drilling locations, plans to sell non-strategic assets and to review and implement cost saving opportunities, plans with respect to our Little Bow ASP project, anticipated netbacks, capital expenditures and other costs associated with the ASP project and the anticipated results from this project, and sources of funding for our capital expenditure program. In addition, all statements relating to reserves in this press release are deemed to be forward-looking as they involve an implied assessment, based on certain assumptions and estimates, that the reserves described, can be properly produced in the future.

By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond our control, such as those relating to results of operations and financial condition, general economic conditions, industry conditions, changes in regulatory and taxation regimes, volatility of commodity prices, escalation of operating and capital costs, currency fluctuations, the availability of services, imprecision of reserve estimates, geological, technical, drilling and processing problems, environmental risks, weather, the lack of availability of qualified personnel or management, stock market volatility, the ability to access sufficient capital from internal and external sources and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel. Risks are described in more detail in our Annual Information Form, which will be available on sedar and our website. Forward-looking statements are provided to allow investors to have a greater understanding of our business.

You are cautioned that the assumptions, including, among other things, future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the cost of developing and expanding our assets; our ability to obtain equipment in a timely manner to carry out development activities; our ability to market our oil and natural gas successfully to current and new customers; the impact of increasing competition; our ability to obtain financing on acceptable terms; and our ability to add production and reserves through our development and acquisition activities used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur or, if any of them do, what benefits we will derive from them. The forward-looking information contained in this document is expressly qualified by this cautionary statement. Our policy for updating forward-looking statements is that Zargon disclaims, except as required by law, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Other Advisories - Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.


Zargon Oil & Gas Ltd. is a Calgary based oil and natural gas company working in the Western Canadian and Williston sedimentary basins that has delivered a long history of returns and dividends (distributions). Zargon's business is focused on oil exploitation projects that profitably increase oil production and recovery factors from existing oil reservoirs.

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@ThingsExpo Stories
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical to maintaining positive ROI. Raxak Protect is an automated security compliance SaaS platform and ma...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound cha...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.